The business with platforms for the purchase of goods and services – i.e. procurement – is alive and well. A typical example: zippera startup developing procurement software announced yesterday its $100 million Series C funding led by Y Combinator with participation from CRV and Tiger Global.
Zip CEO Rujul Zaparde says the funding, which values ​​Zip at $1.5 billion, will be used for “new applications of generative AI” and “drive adoption” across the startup’s customer base.
“In the near term, we plan to add new AI-based capabilities to the Zip platform that will streamline the end-to-end process from intake to payment,” Zaparde told TechCrunch in an email interview. “We believe that AI in procurement has tremendous potential to improve efficiencies and uncover insights that can make our customers’ lives easier.”
Zaparde and Lu Cheng, the company’s second co-founder, founded Zip at the height of the pandemic in July 2020. Former engineers at Airbnb, Zaparde and Cheng said they saw firsthand how difficult it can be for employees to make a purchase for Applying for a new business This often involves multiple complex steps such as obtaining permits and tracking the progress from the request to the actual purchase.
Using Zip, Zaparde and Cheng developed what they call an “intake-to-procure” solution that allows employees to initiate a purchase, which is then sent to finance, legal, IT, security, and other teams for approval and forwarded to the company’s resource management software. A recently launched feature, Intake-to-Pay, offers advanced functionality such as order issuance, invoice processing, and payments.
A flowchart illustrating Zip’s procurement solution, which affects a number of departments within a client’s organization.
Zaparde says that Zip plans to add new AI-based features to the platform in the near future to further streamline the process from ingestion to payment. “We believe that AI in procurement has tremendous potential to improve efficiency and gain insights that can make our customers’ lives easier,” he added.
AI could become a growth area for Zip. But despite competition from vendors like Keelvar and Focal Point, the startup appears to be doing just fine with no new revenue streams imminent.
Zip has more than doubled its customer base since May 2022 (when it completed its Series B), adding companies like Snowflake, Coinbase, Canva, and Databricks. Nearly $1 billion per month is currently approved on the platform, says Zaparde, and $937 million in total savings have been tracked through Zip to date.
Zaparde says Zip didn’t even have to raise his Series C at the time – it was more of an opportunistic round.
“While Zip doesn’t disclose specific revenue metrics, I can confirm that we’ve seen significant ARR growth since our Series B in 2022,” he continued.
After completing Series C, Zip’s war chest is $181 million. A large portion will go toward expanding the company’s footprint with a new office in Dallas, Zaparde says, complementing the San Francisco headquarters and satellite office in Toronto.
