The business of platforms for purchasing goods and services — in other words, procurement — is alive and well. Case in point, Zip, a startup developing procurement software, yesterday announced its $100 million Series C funding led by Y Combinator with participation from CRV and Tiger Global.
Zip CEO Rujul Zaparde says that the financing, which values Zip at $1.5 billion, will be put toward “new applications of generative AI” and “encouraging adoption” across the startup’s customer base.
“In the near term, we’re looking to add new AI-based capabilities to the Zip platform that will streamline the end-to-end intake-to-pay process,” Zaparde told TechCrunch in an email interview. “We believe there’s huge potential for AI in procurement to improve efficiency and synthesize insights that can make our customers’ lives easier.”
Zaparde and Lu Cheng, the company’s second co-founder, started Zip at the height of the pandemic in July 2020. Previously engineers at Airbnb, Zaparde and Cheng say that they experienced firsthand how challenging it can be for employees to request a new business purchase, which often includes multiple complex steps like securing approvals and tracking progress from the request to the purchase itself being made.
With Zip, Zaparde and Cheng built what they describe as an “intake-to-procure” solution that lets employees initiate a purchase that’s then routed for approval across finance, legal, IT, security, and other teams and into enterprise resource management software. A recently introduced feature, intake-to-pay, provides extended capabilities like issuing purchase orders, invoice processing and payments.
In the near term, Zaparde says that Zip’s looking to add new AI-based capabilities to the platform that’ll further streamline the intake-to-pay process. “We believe there’s huge potential for AI in procurement to improve efficiency and synthesize insights that can make our customers’ lives easier,” he added.
AI could become an area of growth for Zip. But despite competition from vendors like Keelvar and Focal Point, the startup appears to be doing just fine without imminent new lines of revenue.
Zip has more than doubled its customer roster since May 2022 (when it closed its Series B), adding companies like Snowflake, Coinbase, Canva and Databricks. Nearly $1 billion per month is now being approved in the platform, Zaparde says, and $937 million in total savings has been tracked through Zip to date.
Zaparde says that Zip didn’t even need to raise its Series C when it did — it was an opportunistic round, rather.
“While Zip does not disclose specific revenue metrics, I can confirm that we have seen significant ARR growth since our Series B in 2022,” he continued.
With the close of the Series C, Zip’s warchest stands at $181 million. A large portion is going toward expanding the company’s footprint with a new office in Dallas, Zaparde says, adding to its headquarters in San Francisco and satellite office in Toronto.