AI-powered procurement orchestration platform Zip is the recipient of a major new funding round. The cash injection represents the largest single round of funding for a procurement technology company in over 20 years. On Monday, the San Francisco-based company announced $190 million in Series D funding led by BOND.
The investment brings Zip’s valuation to $2.2 billion, a significant increase from its $1.5 billion valuation in 2023. Additional participants in the round included new investors DST Global, Adams Street, and Alkeon. Existing investors Y Combinator and CRV also participated.
Fixing the “broken” procurement sector is a multi-billion dollar job
Organisations around the world face mounting pressure on multiple fronts. From the climate crisis to economic instability and geopolitical pressures, procurement managers are increasingly struggling to optimise spend and mitigate risk. Procurement has become a critical function within the larger supply chain picture. Each year organisations spend “trillions” on everything from office supplies and software subscriptions to professional services and marketing agencies. Procurement represents the second largest area of business spend after payroll. However, despite its enormous financial impact, Zip argues that the purchasing process has remained stuck in the past. Procurement solutions remain “slow, complex, and riddled with inefficiencies.”
“Procurement is broken,” said Rujul Zaparde, Co-founder and CEO of Zip. “Companies are wasting billions of dollars and countless hours navigating byzantine approval processes, dealing with security risks, and manually entering data. Zip has already proven that we can fix that, saving our customers billions of dollars and thousands of hours of time — and our new round of funding will allow us to continue to revolutionise business spending.”
Zip’s platform offers a stunningly intuitive, consumer-grade interface that “makes purchasing as easy as online shopping,” while ensuring compliance, efficiency, and cost control.
Zip streamlines complex workflows across departments — from legal and IT to security and finance — seamlessly connecting all teams involved in the procurement lifecycle. This holistic approach has already transformed operations for industry giants like Snowflake, Discover, and Sephora, who have collectively saved over $4.4 billion in procurement spend through Zip’s platform in less than four years. To date, over $107 billion in customer spend has been processed through Zip, and Zip has achieved 3x growth across large enterprises just this year.
Where’s the money going?
Planning on having an equally transformative effect on procurement as Salesforce had on CRM and Workday had on HR, Zip aims to redefine how businesses interact with suppliers and manage spending. This new funding will fuel several initiatives for Zip, including:
Accelerate R&D efforts, doubling down on Zip’s approach to building best-in-class procurement software entirely in-house. This includes further development of Zip’s Procure-to-Pay (P2P) product line. The product has already seen strong growth and adoption by major enterprises like Northwestern Mutual, Toast, and Coinbase. The funding will also support expansion into new product lines to address evolving market needs.
Establish the Zip AI Lab to continue developing and deploying AI solutions that integrate with legacy enterprise systems. Zip’s existing AI suite has already dramatically improved procurement processes across legal, security, finance, and IT teams.
Broaden global expansion with a particular focus on the EMEA region where Zip saw over 200% growth last year. Zip will leverage its new London office and expanded EMEA team to meet demand across the UK, Germany, and France. This expansion will solidify Zip’s position as the go-to procurement solution for large enterprises worldwide.
“Zip is one of those rare opportunities in enterprise software that doesn’t come along often,” said Jay Simons, General Partner at BOND, who previously served as President of Atlassian (NASDAQ: TEAM). “What sets Zip apart is its relentless focus on customer success and product innovation, which in today’s tough macro environment, is exactly what enterprises need to drive efficiency and rein in costs. The team has built a product so essential that it’s quickly becoming the go-to platform for the world’s biggest companies. We’re confident Zip is primed to be a staple in every Fortune 500 tech stack.”