Zip raises $43 million at a $1.2 billion valuation for its growing ‘procurement concierge’ – gotechbusiness.com

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The process of making a purchase within a company can be long and cumbersome, involving multiple departments and a lot of back and forth.

A few Airbnb alums have teamed up to build a software company focused on drastically simplifying that process, or, in their words, being a “procurement concierge.” that start up, ziphas raised $43 million in a Series B funding round led by YC continuity at a valuation of $1.2 billion.

Notably, the San Francisco-based company was founded in 2020, so it’s hit this unicorn rating in about 18 months (this deal was actually closed earlier in 2022). Tiger Global and CRV also participated in the latest funding, bringing Zip’s total funding to $81 million. The startup has gathered more than 100 clients such as Canva, Snowflake, Roblox, Coinbase, Airtable, Toast, Webflow, and Databricks.

Zip co-founder and CEO Rujul Zaparde previously co-founded another startup, a car-sharing company called FlightCar, which closed its doors and sold his technology to Mercedes-Benz in 2016. Zaparde had dropped out of Harvard at the time to help that company grow. Later, while working in product management at Airbnb, Zaparde met chief technical officer Lu Cheng. The two kept in touch then Zaparde then worked at Y Combinator as a visiting partner for about a year before working together to build ZIP. The premise behind the company was based on a mutual understanding that a problem they both had faced in their careers was how laborious and time-consuming a procurement request could be.

“If we had to buy software for, say, $100,000 or work with an agency or hire a contractor, there was no obvious place to make those kinds of requests,” Zaparde recalls. “The approval process would be across a plethora of teams, so we started Zip to resolve what we call the intake-to-procure process.”

Zip is a SaaS offering that all runs in the cloud. As part of the product workflow capabilities, Zaparde said Zip provides a no-code interface for building approval workflows within the product and has focused its workflow capabilities specifically on solving the intake-to-procure problem.

The goal is that any employee with a purchase request can go to Zip to initiate that request using the configurable workflow tools. The applicant, Zaparde said, can see “a very crystal clear visual workflow of their requests and where it is across all cross-functional teams.”

The end result, the board claims, is visibility and an auditable record for that request across all teams.

Zip delivers an intuitive consumer-level one-stop experience — no training of any kind required,” Zaparde said.

Image Credits: zip

With so many people working remotely due to the COVID-19 pandemic, initiating and buying spending is much more decentralized, the director noted.

“EThere are people all over the company who are not only buying software, but also asking for services and many different kinds of things that they need to do their jobs better,” he told gotechbusiness.com.

Also, today more cross-functional teams are needed to approve purchases, for example in the areas of security, risk, IT and legal.

“It used to be 15-20 years ago when all the people really cared about the cost and then hierarchically approved it based on that,” Zaparde said. “But in 2022 it’s a lot more complex than that and risks are so much more important.”

While Zip is primarily aimed at enterprise companies, it also works for many smaller companies, he said.

“We are very focused on the end-user experience and building a consumer-grade product to solve this problem that is ubiquitous in all businesses,” Zaparde said. “I would even describe it as perhaps the most complex workflow problem in a company.”

Today, Zip has more than 130 employees, which it expects to double by the end of the year with a focus on hiring across its product and engineering teams.

Ali Rowghani, managing partner at YC Continuity, invested in Zip based on a “realize that the product was so good that it essentially sold itself, even in the early days.”

Some early customers told YC Continuity that Zip’s product “addressed a very obvious pain point” and that they were ready to buy before the demo was even complete, according to Rowghani.

“The Zip user experience is one of the best in SaaS,” he told gotechbusiness.com. “Under that effortless experience lies an enormous amount of highly innovative engineering work. The end-to-end visualization of the entire workflow, for all stakeholders, which can be changed on-the-fly, is unique and will be difficult for anyone to replicate.”

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