The company plans to use the new funds to expand its platform to support the full order lifecycle, accelerate product development, and create new tools for distributors and contractors.

Parspec, a San Mateo-based AI-native software platform focused on the construction supply chain, has raised $20 million in Series A funding, bringing its total funding to over $31 million, with the round led by Threshold Ventures.

Founded in 2021 by Forest Flager and Pratyush Havelia, Parspec aims to streamline B2B procurement for construction materials, especially MEP products, using advanced AI and machine learning.

Parspec's innovative approach allows it to instantly identify spec-compliant products and locate related documentation, giving it a competitive edge in the industry.

Initially focusing on lighting and electrical products, Parspec has expanded to support mechanical, electrical, and plumbing (MEP) products, serving 288 customers including major electrical distributors and lighting agencies in the U.S.

The company's platform leverages multimodal AI models and a proprietary data pipeline to automate product selection, quoting, and submittals, significantly reducing bidding time and costs while improving bid quality.

Parspec's revenue has grown fourfold over the past year, driven by its AI platform that extracts and matches product data from unstructured documents and manufacturer websites.

Industry experts see Parspec's proprietary data and AI models as a significant competitive advantage that could transform procurement processes and reduce construction costs.

CEO Forest Flager highlighted that the company's valuation has tripled since its seed funding in March 2022, despite a broader decline in venture funding for U.S. real estate startups.

The company's mission and growth have been shaped by Flager's experience at Katerra and research into leveraging computing for building design optimization, addressing the industry's lack of scalable product information.