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Parspec's Revolution in Construction Supply Chain: A $20 Million Series A Funding

On July 8, 2025, Parspec, an AI-driven software platform, announced it has successfully secured $20 million in Series A funding, aimed at modernizing the construction supply chain. The funding round was spearheaded by Threshold Ventures, formerly known as DFJ, with contributions from existing investors such as Innovation Endeavors and Building Ventures. This significant investment is poised to enhance Parspec's capacity to streamline the supply chain processes, with a commitment to leveraging cutting-edge technology to support wholesale distributors and sales agents in efficiently bidding for construction products.

The construction industry is a colossal market, estimated at $16 trillion in 2024, with over $5 trillion traversing the materials supply chain. Despite the enormous scale, many businesses still depend on antiquated procurement methods that primarily utilize emails and phone calls. These outdated techniques tend to be time-consuming and prone to mistakes, leading to labor costs that are significantly higher than those in other sectors like automotive and electronics.

Parspec's innovative solutions have led to impressive results, with clients reporting productivity improvements between 50% and 100%. Rama Theekshidar, the Chief Digital Officer at U.S. Electrical Services Inc., expressed that Parspec's platform has drastically reduced turnaround times for quotes and submissions, allowing their team to secure more projects and fostering profitable business growth. This efficiency is just one of the many benefits that Parspec's technology brings to clients in the construction industry.

A noteworthy aspect of Parspec's capabilities is its advanced technology that can swiftly identify products meeting complex client specifications. Utilizing advanced multimodal AI models, Parspec effectively extracts requirements from design documents, surfacing a ranked list of compliant products from a vast database of over 6 million items. To ensure that their product catalog remains up-to-date and exhaustive, Parspec has developed an automated data pipeline that extracts and organizes information from thousands of manufacturer websites on a daily basis.

Mo Islam, a partner at Threshold Ventures, stated, “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 the procurement of construction materials, unlocking substantial value for their customers.”

In response to this funding, Forest Flager, Parspec’s CEO and co-founder, expressed excitement about the collaboration with Threshold Ventures and outlined the company's goal to enhance its platform in facilitating a more interconnected and efficient construction supply chain. With the new financial backing, Parspec plans to expand its offerings to encompass the entire order lifecycle, creating a cohesive digital environment for interaction among contractors, distributors, sales agents, and manufacturers.

Parspec has witnessed remarkable growth, with a fourfold increase in annual revenue in the past year. The platform now supports hundreds of distributors and sales agents, including four of the five largest electrical distributors in the United States, representing $70 billion in global annual sales. Danna Stone, Senior Vice President of Marketing at Graybar, remarked on how integrating Parspec’s platform has transformed their bidding processes, leading to enhanced customer experiences.

Starting as a specialist in lighting and electrical products in 2021, Parspec has now broadened its scope to include mechanical, electrical, and plumbing (MEP) sectors, which contribute to a quarter of the total construction material expenditure in the U.S.

With the latest funding, Parspec intends to focus on developing new solutions in two critical areas:
1. Distributor Order Management: Offering a comprehensive end-to-end solution for the project order lifecycle, including quotes, submissions, and fulfillment stages.
2. Contractor Portal: Providing real-time access to project documents, order statuses, delivery tracking, and collaboration tools for construction material buyers.

These products are being developed closely in partnership with established clients like Rexel, Border States, and U.S. Electrical Services. Jennifer Cianciarulo, Vice President of Customer Experience at Crescent Electric Supply, stated that the implementation of the contractor portal would significantly elevate overall customer experiences and introduce new efficiency levels.

Parspec is actively seeking other leading distributors and manufacturers to join a product steering committee for this next phase in their growth. Already, pilot programs are in progress, with plans to commercially launch the Distributor Order Management system and Contractor Portal by the end of 2025.

About Parspec
Founded in 2021 by Forest Flager and Pratyush Havelia, Parspec is committed to transforming the B2B procurement landscape for construction materials, particularly focusing on mechanical, electrical, and plumbing products. With headquarters in San Mateo, California, Parspec has raised $31 million to date from prominent venture investors specializing in deep tech and construction technology. For further information, visit Parspec's website.

About Threshold Ventures
Threshold Ventures, previously DFJ, is a leading early-stage venture capital firm, with investments in notable startups such as SpaceX and Tesla. Designed to be an effective partner for entrepreneurs, Threshold focuses on nurturing businesses in the early stages of their development. To learn more, visit Threshold Ventures' website.