Parspec Raises $20 Million Series A to Modernize the Construction Supply Chain with AI
Parspec, an AI-native software platform that enables wholesale distributors and sales agents to efficiently bid and supply construction products, has just 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 more than $5 trillion flowing through the materials supply chain. Despite this scale, much of the industry still relies on procurement processes managed through email and phone. According to Parspec, these methods are both time-consuming and error-prone, resulting in labor costs that can be double in comparable industries such as auto parts and electronics.
Parspec reports that its customers consistently report 50-100% improvement in labor productivity, while simultaneously improving bid quality and compliance.
“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.”
A key differentiator for Parspec is the ability to identify products available in the market that satisfy complex specifications provided by the customer. To do so, the company has developed multi-modal AI models that extract these requirements from design drawings and spec documents. Next, a ranked set of compliant products are sent to the user from a database of 6+ million products. Parspec’s product catalog is kept current via an automated data pipeline that extracts and organizes product information from thousands of manufacturer websites on a daily basis.
“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.”
Added Forest Flager, co-founder & CEO of Parspec, “We’re excited to partner with Threshold to accelerate our mission to enable a more connected and efficient construction supply chain. With this new funding, and in close collaboration with our existing customers, [we] plan 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.”
Parspec now supports hundreds of distributors, and sales agents — including four of the five largest electrical distributors in the U.S.
“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 plans to invest the majority of their Series A capital into product development, focused in 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 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 transforming the way we deliver value to our customers. From lightning-fast quote turnarounds to professional, timely submittal packages, the time savings have been a true differentiator,” noted Jennifer Cianciarulo, vp/customer experience at Crescent Electric Supply. “Adding a contractor portal to the Parspec platform will be a total game changer, enhancing the overall customer experience and unlocking new levels of efficiency. We’re honored to join Parspec’s steering committee and help shape the next chapter of innovation.”
Pilot engagements are already underway, and the commercial launch of Distributor Order Management and the Contractor Portal is expected by the end of 2025.
