Procurement Startup Zip Lands $100M — Ups Valuation To $1.5B

San Francisco-based Zip raised a $100 million Series C from investors Y Combinator, CRV and Tiger Global, while also bucking the trend of declining valuations.

The new cash gives the procurement startup a $1.5 billion post-money valuation. While many companies are seeing stagnant or falling valuations, the new valuation represents a slight bump from its previous $1.2 billion valuation last May after the company raised a $43 million Series B.

“We continue to invest in Zip because we believe in this outstanding team’s ability to achieve their mission to solve a ubiquitous business problem: spend control,” Garry Tan, president and CEO at Y Combinator, said in a release. “Zip is one of YC’s most successful B2B companies from the last few years.”

Zip helps companies with the burdensome process of buying new software and hardware. Its platform helps with sourcing, approving and paying for needed business tools, ideally helping to streamline the process to make it less taxing.

The company claims hundreds of customers globally including Snowflake, Coinbase and Northwestern Mutual.

Procuring cash

Procurement falls under the broader umbrella of what is often called enterprise resource planning.

While not the sexiest of industries, companies do need software systems that help run processes in departments such as finance, human resources and supply chain. SAP, Ariba and Coupa have built large companies in the sector.

ERP startups have not seen big funding dollars in recent times, according to Crunchbase data. In 2021, startups in the sector raised $1.5 billion in 80 deals.

However, last year those numbers fell to just $335 million in 53 deals.

Thus far this year, the industry has seen only $115 million of dealmaking — with Zip’s being the largest by far.

Founded in 2020, Zip has raised $181 million to date, per the company.

Illustration: Dom Guzman

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