Levelpath, a procurement software startup founded by the duo behind Scout RFP, has raised $55 million in Series B funding led by Battery Ventures as the company looks to quadruple its revenue this year.
The funding round also saw participation from existing investors, including Benchmark, which led Levelpath’s $14.5 million seed round, and Redpoint, the lead investor in the $30 million Series A round announced in 2023.
The startup was founded by Stan Garber and Alex Yakubovich (pictured right), whose previous startup, Scout RFP, was acquired by Workday for $540 million in 2019. During their three years Yakubovich and Garber spent working at Workday, the two identified persistent procurement challenges that motivated them to build a mobile-first, user-friendly platform.
Levelpath’s timing proved fortitous; launching right as ChatGPT debuted has enabled the startup to integrate AI capabilities from its inception. This includes reviewing unstructured data in contracts and recommending less expensive, similar products and services. The company now counts Ace Hardware, Amgen, Coupang, and SiriusXM as customers.
The investment signals confidence in Levelpath’s fast growth and its potential to disrupt a market dominated by legacy players. Procurement software has long been controlled by outdated vendors like Coupa and Ariba, whose clunky systems often drive employees to bypass official processes. This “rogue” spending using corporate credit cards frequently results in overspending and missed opportunities for bulk discounts, according to Battery Ventures general partner Neeraj Agarwal.
In fact, procurement represents companies’ second-largest expenditure after payroll, making software improvements particularly valuable. The procurement software market was valued at $7.3 billion annually in 2023, according to Fortune Business Insights.
Although Levelpath is a newer and likely smaller player compared to its main competitors — including Zip, valued at $2.2 billion last fall, and Oro Labs, backed by Felicis — the company seems to have all the right ingredients, including Agrawal, who led Battery’s Series B investment into Coupa and has joined Levelpath’s board.
Coupa, of course, grew into one of the most successful procurement companies of its era. It had a successful IPO in 2016 and eight years later, was taken private by PE firm Thoma Bravo for $8 billion.
Agrawal, who likely understands what it takes to build a big business in this category, is equally impressed by Levelpath’s technology and its founders. “They have such a strong reputation for delivering product, being good people to work with, and doing what they say they’re going to do,” Agrawal told Tech Zone Daily. “Customers want to work with them and help them build this next-generation product.”
Yakubovich and Garber have been friends since attending high school in Ohio. They bonded over their shared heritage as immigrants from the former Soviet Union and a mutual interest in entrepreneurship. The pair have been working together for over 20 years, and their stated goal is to help customers enjoy, rather than avoid, using procurement software.
While procurement might seem like a mundane business function, it offers a direct and significant return on investment by helping companies save money.
“It makes the cash register ring because of these savings,” Agrawal said.
