Zip, an AI-powered software startup for businesses buying goods and supplies, has secured $190 million in a Series D funding round. The financing was led by BOND with participation from DST Global, Y combinator, Adams Street, Alkeon, and CRV.
The latest funding is testament to the software startup’s new valuation of $2.2 billion, a significant bump from the $1.5 billion value of the company in 2023. The new capital marks the largest investment in procurement technology in over two decades, the press release on Monday noted.
In today’s global economy, Zip’s mission focuses on procurement of goods and services for businesses that aim to optimize spending and reduce risk. With legacy systems turning outdated and inefficient, businesses are turning to new solutions to streamline office-related operations.
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Zip’s technology helps businesses replace manual processes and simplify tasks by providing a single platform for employees to initiate purchase requests, improving speed and transparency of procurement processes across finance, legal, IT, security and other teams.
Former Airbnb employees, Rujul Zaparde and Lu Cheng came together to build Zip’s technology after realizing the laborious nature of business purchases. However, this isn’t Zaparde’s first stint into entrepreneurship.
Dropping out of Harvard, Zaparde co-founded a car-sharing company called FlightCar in 2013. When Mercedes Benz bought its technology in 2016, Zaparde moved to working in AirBnB’s product management where he met Cheng, who was the head of engineering at the time. After a brief stint as a visiting partner at Y Combinator, Zaparde started Zip with Cheng.
“Procurement is broken,” said Zaparde. “Companies are wasting billions of dollars and countless hours navigating byzantine approval processes, dealing with security risks, and manually entering data. Zip has already proven that we can fix that, saving our customers billions of dollars and thousands of hours of time — and our new round of funding will allow us to continue to revolutionize business spending.”
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Leading enterprises like Prudential, Canva, Discover, Sephora, Lyft, Dollar Tree, Coinbase and over 450 others use Zip, saving them over $4.4 billion in procurement costs in less than four years, the company reported.
Founded in 2020, Zip has achieved three times growth across large enterprises in 2024, according to the company’s statement. The procurement software startup plans to use the fresh capital towards enhancing its research and development efforts, building advanced in-house software, establishing the Zip AI lab to deploy AI solutions, and broadening its global expansion to meet demand across UK, Germany, and France.