AI-powered construction procurement software platform Parspec has raised $20 million in series A funding.
The round was led by Threshold Ventures (formerly DFJ), with participation from existing venture investors including Innovation Endeavors, Building Ventures, Heartland Ventures, and Hometeam Ventures.
The global construction industry represented a $16 trillion market in 2024, with over $5 trillion flowing through the materials supply chain. Despite this scale, much of the industry still relies on outdated procurement processes managed through email and phone. These methods are time-consuming and error-prone, resulting in labour costs that are double comparable industries such as auto parts and electronics.
Parspec’s customers consistently report 50-100% improvement in labour productivity, while simultaneously improving bid quality and compliance. “With Parspec, we’ve been able to significantly reduce quote and submittal turnaround times,” said Rama Theekshidar, Chief Digital Officer at U.S. Electrical Services Inc. “This efficiency empowers our team to pursue and win more projects—fueling profitable growth across the business. The team at Parspec are true thought leaders, consistently pushing the boundaries of what’s possible in our industry, and we are proud to partner with them.”
A key differentiator for Parspec is their ability to instantly identify products available in the market that satisfy complex specifications provided by the customer. To do so, Parspec has developed cutting-edge multimodal AI models which extract these requirements from design drawings and specification documents. Next, a ranked set of compliant products are surfaced to the user from a database of over six million products. To ensure Parspec’s product catalogue is current and comprehensive, they have developed an automated data pipeline which extracts and organises product information from thousands of manufacturer websites on a daily basis
Parspec plans to invest the majority of their Series A capital into product development, focused in two main areas:
- Distributor Order Management: Providing an end-to-end solution for the project order lifecycle including quote, submittal and fulfillment phases.
- Contractor Portal: Providing construction material buyers live access to project documents, order status, delivery tracking and real time communication and collaboration tools.
“We’re excited to partner with Threshold to accelerate our mission to enable a more connected and efficient construction supply chain,” stated Forest Flager, Cofounder and CEO of Parspec. “With this new funding, and in close collaboration with our existing customers, Parspec plans to expand our platform to support the full order lifecycle and to create a unified digital environment for collaboration between contractors, distributors, sales agents and manufacturers.”
Mo Islam, Partner at Threshold Ventures, added: “Forest, Pratyush and the Parspec team are tackling one of the largest opportunities in the construction industry. They have developed an AI-native product to automate construction materials procurement, unlocking massive value for their customers.”
Powered by its best-in-class quoting and submittal platform, Parspec has experienced four times revenue growth over the past 12 months and now supports hundreds of distributors, and sales agents—including four of the five largest electrical distributors in the US, who collectively represent $70 billion in global annual sales.
Parspec started in 2021 with a focus on lighting and electrical products and has since expanded to support mechanical, electrical and plumbing (MEP) products. Together, MEP products represent approximately one quarter of the total US construction material spend.