By Proptechbuzz
By Ravi Kumar
Parspec, a California-based startup focused on construction procurement, has raised $20 million in a Series A round. The funding is aimed at expanding its AI-powered platform that simplifies how distributors and sales agents match and source building products.
The startup claims its technology can “instantly identify products available in the market that satisfy complex specifications provided by the customer,” reducing the time and effort involved in bidding and documentation.
Co-founded by Forest Flager and Pratyush Havelia, Parspec initially served the lighting and electrical segment but has since broadened its focus to include mechanical, electrical, and plumbing (MEP) products.
The round was led by Threshold Ventures, with continued support from Innovation Endeavors, Building Ventures, Heartland Ventures, and Hometeam Ventures. The company has now raised a total of $31.5 million to date.
While Parspec declined to disclose its current valuation, CEO Flager said it has tripled since its seed round in March 2022.
This funding comes during a period of reduced venture investment in real estate and construction tech. U.S.-based real estate startups raised $4.9 billion in 2023, falling further to $3.6 billion. In early 2025, the sector has seen $2.1 billion across 201 deals, suggesting continued caution among investors.
Flager and Havelia met at Stanford University, where Flager was a postdoctoral researcher and Havelia worked in his lab. They observed that optimization in building design often lacked reliable, scalable data on construction materials.
“Information about building products, such as the performance of different windows or lighting materials, was not really available at scale,” Flager said.
That insight eventually shaped their current platform. Flager’s stint at construction startup Katerra, which shut down in 2021, also gave him exposure to the operational challenges in procurement and product data sourcing.
The platform functions as a workflow tool where artificial intelligence plays a core role. Parspec uses machine learning and large language models to extract and interpret information from unstructured documents like drawings and specifications.
From there, it matches those specifications with relevant products by indexing data from more than 4,000 manufacturer websites. The system can also retrieve installation guides, warranty details, and other supporting documents.
The quoting module, launched in early 2025, has helped differentiate Parspec in a competitive market.
According to the company, this approach has supported 4x revenue growth over the past year.
Parspec currently works with 288 customers, including several of the largest electrical distributors and lighting agencies in the U.S. Its revenue model is subscription-based and scales with usage—measured by the number of quotes, submittals, and documentation packages generated through the platform.
Flager believes that enhancing procurement efficiency is critical as construction material prices remain elevated—about 40% higher than in 2020.
Mo Islam, a partner at Threshold Ventures, noted that Parspec’s AI-driven architecture sets it apart from others.
“Parspec’s proprietary materials dataset and fine-tuned generative AI models give the company a strong data moat and AI competitive advantage,” Islam said via email. “The company’s platform can automate the entire procurement workflow for the construction industry, from product selection and pricing to quoting and submittals.”
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