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Home » AI in Distribution » Parspec Raises $20 Million to Bring AI Automation to Construction Distributors

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  • Published on: July 8, 2025

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  • Picture of Distribution Strategy Group Distribution Strategy Group

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AI in Distribution

Parspec Raises $20 Million to Bring AI Automation to Construction Distributors

Parspec, a California-based software startup aiming to streamline procurement in the construction supply chain, has raised $20 million in funding. The round was led by Threshold Ventures, with participation from Innovation Endeavors, Building Ventures, Heartland Ventures, and Hometeam Ventures, the company announced in a press release.

Founded in 2021, Parspec provides an AI-native platform that helps wholesale distributors and sales reps—particularly in the mechanical, electrical, and plumbing (MEP) sectors—automate quoting, submittals, and product selection. Its searchable database includes more than six million construction products, and the software uses multimodal AI to extract technical requirements from construction specifications and design documents, the company says.

“Our platform enables distributors to quote more jobs, improve bid accuracy, and reduce labor costs in a process that’s long been fragmented and analog,” said Forest Flager, Parspec’s co-founder and CEO. “With this new funding, we plan to expand our platform to support the entire order lifecycle, from submittal to fulfillment.”

The company said it has seen a fourfold increase in revenue over the past year and now supports hundreds of distributors and sales agents. According to Parspec, four of the five largest electrical distributors in the United States, collectively representing $70 billion in annual global sales, are current users of the platform.

Danna Stone, senior vice president of marketing at Graybar, a distributor of electrical, industrial and communications products, cited faster response times and improved customer service as key benefits of the platform. “Incorporating the Parspec platform into Graybar’s industry-leading service capabilities has significantly improved how we quote and bid on projects,” Stone said. “We look forward to working with Parspec to transform the supply chain.”

Rama Theekshidar, chief digital officer at distributor U.S. Electrical Services Inc., also highlighted operational gains: “With Parspec, we’ve been able to significantly reduce quote and submittal turnaround times. This efficiency empowers our team to pursue and win more projects—fueling profitable growth across the business,” he said.

Parspec’s future roadmap includes deeper integration with distributor systems. The company says it is developing a distributor order management system for end-to-end functionality from quoting to fulfillment, and a contractor portal that will offer real-time access to documents, delivery tracking, and messaging tools. Both products are being co-developed with distributor partners including Rexel, Border States, Crescent Electric Supply, and U.S. Electrical Services, according to the company.

“Parspec is transforming the way we deliver value to our customers,” said Jennifer Cianciarulo, vice president of customer experience at Crescent Electric Supply, in the release. “Adding a contractor portal to the Parspec platform will be a total game changer.”

Parspec expects both the distributor and contractor tools to be commercially available by the end of 2025. Pilot programs are currently underway.

The company, headquartered in San Mateo, California, has now raised $31 million in total Formerly known as Draper Fisher Jurvetson (DFJ), Threshold Ventures is a Silicon Valley-based early-stage venture capital firm. Its portfolio includes investments in companies such as SpaceX, Tesla, Box, and Doximity.

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