Venture Capital

Parspec Locks In $11.5 Million Seed Round

PALO ALTOParspec, an AI-powered software platform that streamlines the selection and sale of construction products, has raised an oversubscribed $11.5 million seed round. Innovation Endeavors led the investment, with participation from Building Ventures, Heartland Ventures, and Hometeam Ventures.

Two investors joined the board in connection with the investment: Innovation Endeavors’ Josh Rapperport as a board member and Building Ventures’ Allen Preger as a board observer.

Founded in 2021, Parspec is transforming the $1.7 trillion global construction materials market by providing better information and online workflows to support the procurement process. Parspec’s CEO and co-founder Forest Flager, who earned his Ph.D. at Stanford and previously led software at Katerra, explains the problem and solution as follows: “To select products today, practitioners typically compare design specifications to technical product documentation hosted on thousands of manufacturer websites. It is a time consuming and error-prone process that contributes to procurement costs (in construction) that are nearly double comparable industries. Parspec uses AI to instantly identify spec-compliant products and associated documents, reducing labor by more than 50% compared to manual methods while improving compliance.”

Parspec is initially focused on serving sales agencies and distributors of lighting and electrical products. The company is currently working with three of the top ten lighting agencies and four of the five largest electrical distributors in the United States, including Sonepar, Graybar, Rexel and CED.

“With Parspec at our disposal we’re more efficient than competitors doing it the old way,” said Eli Basset, Manager at CED in San Francisco. “That means I can go out there and capture market share.” Benefits reported by Parspec customers include cutting time to quote in half, enabling teams to bid 6-15% more jobs. In addition, customers have increased win rates by quoting products their customers are more likely to accept. As a result, customers have seen a significant increase to both top line revenue and profitability. “Parspec isn’t just another software solution,” said Netesh Gohil, Vice President of Operations at SESCO Lighting, Inc. “It’s critical to our business.” SESCO is the largest lighting sales agency in the United States and has been a Parspec customer since 2022.

“Recent advances in AI have enabled us to reinvent the product selection, quoting and submittal process for our customers,” said Pratyush Havelia, Parspec’s CTO and co-founder. “We utilize cutting-edge NLP & computer vision models to enable contextual, hybrid and image-based searches, LLM-based document summarization, and a personalized product recommender system across a live database of over 2 million configurable product families that is growing daily.”