SAN MATEO, Calif. — Parspec, an AI software platform that enables wholesale distributors and sales agents to bid and supply construction products efficiently, 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 Despite this scale, much of the industry still relies on outdated procurement processes managed through email and phone, Parsec stated in a press release. These methods are time-consuming and error-prone, resulting in labor costs that are double comparable industries such as auto parts and electronics.

"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 is are true thought leader, consistently pushing the boundaries of what's possible in our industry, and we are proud to partner with them."

Parspec has developed cutting-edge multimodal AI models that identify products available in the market that satisfy complex specifications provided by the customer from design drawings and specification documents. To ensure Parspec's product catalog is current and comprehensive, they have developed an automated data pipeline that extracts and organizes product information from thousands of manufacturer websites daily.

"Forest, Pratyush, and the Parspec team are tackling one of the largest opportunities in the construction industry," said Mo Islam, partner at Threshold Ventures. "They have developed an AI-native product to automate construction materials procurement, unlocking massive value for their customers."

"We're excited to partner with Threshold to accelerate our mission to enable a more connected and efficient construction supply chain," stated Forest Flager, co-founder 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."

Powered by its best-in-class quoting and submittal platform, Parspec has experienced 4x 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 U.S., who collectively represent $70 billion in global annual sales.

"Incorporating the Parspec platform into Graybar's industry-leading service capabilities has significantly improved how we quote and bid on projects, enhancing our overall customer experience," said Danna Stone, Senior Vice President, Marketing at Graybar. "We look forward to working with Parspec to transform the supply chain."

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 U.S. construction material spend.

Parspec plans to invest the majority of its Series A capital into product development, focused on 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 with live access to project documents, order status, delivery tracking and real-time communication and collaboration tools.

These new products are being developed in close collaboration with Parspec's existing customers, including Rexel, Border States, U.S. Electrical Services, and Crescent Electrical Supply.

Parspec is actively seeking additional leading distributors, sales agencies, and manufacturers to join their product steering committee for this next phase in Parspec's journey. Pilot engagements are already underway, and the commercial launch of Distributor Order Management and the Contractor Portal is expected by the end of 2025.

To learn more, visit www.parspec.io.