Parspec, a construction technology startup using artificial intelligence to streamline the supply chain for mechanical, electrical, and plumbing (MEP) products, has raised $20 million in Series A funding led by Threshold Ventures, bringing the company’s total funding to $31.5 million.
The San Mateo-based company helps sales agents and wholesale distributors “efficiently bid and supply” construction products by instantly identifying products that satisfy complex specifications using AI. The platform combines workflow automation with machine learning to parse unstructured documents and match products to specifications from over 4,000 manufacturer websites.
“This enables customers to cut time and cost to bid in half, while simultaneously improving bid quality and compliance, enabling them to bid and win more projects,” said CEO and co-founder Forest Flager. The company’s valuation has increased 3x since its seed raise in March 2022.
Parspec has experienced 4x revenue growth over the past 12 months and currently serves 288 customers, including four of the five largest electrical distributors and three of the five largest lighting agencies in the U.S. The funding comes as construction material prices remain approximately 40% higher than 2020 levels.
Threshold Ventures partner Mo Islam noted: “Parspec’s proprietary materials dataset and fine-tuned generative AI models give the company a strong data moat and AI competitive advantage. The company’s platform can automate the entire procurement workflow for the construction industry, from product selection and pricing to quoting and submittals.”
The raise occurs during a challenging period for construction tech funding, with real estate startup funding declining from $13.7 billion in 2021 to $3.6 billion in 2024, making Parspec’s AI-native approach to solving procurement inefficiencies particularly noteworthy in the trillion-dollar construction industry.