Zip lines up $43 million at a $1.2 billion valuation for its growing ‘supply concierge’
The purchasing process within a company can be long and tedious, involving several departments and many back and forths.
Two Airbnb alumni have teamed up to create a software company aimed at dramatically simplifying this process or being, in their own words, a “concierge for purchases”. This startup, zipperraised $43 million in a Series B funding round led by YC continuity at a valuation of $1.2 billion.
Notably, the San Francisco company was founded in 2020, so it achieved that unicorn valuation in about 18 months (that deal actually closed earlier in 2022). Tiger Global and CRV also participated in its latest funding, bringing Zip’s total funding raised to $81 million. The startup has over 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 shut down and sold his technology at Mercedes-Benz in 2016. Zaparde had left Harvard at the time to help grow that business. Later, while working in product management at Airbnb, Zaparde met chief engineering officer Lu Cheng. The two stayed in touch when Zaparde then worked at Y Combinator as a guest partner for about a year before teaming up to build Zip. The premise of the company was based on a mutual realization that a problem they had both faced in their careers was the slowness and sluggishness of a supply request.
“If we needed to buy software for, say, $100,000 or work with an agency or hire a contractor, there was no specific place to go to initiate that type of request. “, recalls Zaparde. “The approval process was going to happen across a plethora of teams, so we launched Zip to solve what we call the intake-to-procurement process.”
Zip is a SaaS offering, running entirely in the cloud. As part of the product’s capabilities around workflow, Zaparde said Zip provides a no-code interface to build approval workflows within the product and has specifically focused its workflow capabilities on resolving the problem of admission to supply.
The goal is for any employee with a supply request to be able to access Zip to initiate that request using its configurable workflow tools. The requester, Zaparde said, can “see a very clear visual workflow of their requests and where they fit in across all cross-functional teams.”
The end result, according to the executive, is visibility and a verifiable record of this request across all teams.
“Zip offers a unique and intuitive consumer-grade experience – no training of any kind required,” said Zaparde.
Picture credits: zipper
With so many people working remotely due to the COVID-19 pandemic, spending initiation and purchases have become much more decentralized, the executive noted.
“EThere are people all over a company, buying not just software, but services and asking for many kinds of things that they need to do their job better,” he told TechCrunch.
In addition, today more cross-functional teams are needed to approve purchases, for example in the areas of security, risk, IT and legal.
“15 to 20 years ago, all people really cared about was cost and then hierarchically approved it based on that,” Zaparde said. “But in 2022 it’s a lot more complex than that and the risk matters a lot more.”
Although Zip is primarily focused on businesses, it also works for much smaller businesses, he said.
“We focused on the end-user experience and creating a consumer product to solve this problem that is pervasive in all businesses,” Zaparde said. “In fact, I would describe it as perhaps the most complex workflow problem within a company.”
Today, Zip has more than 130 employees, which it plans to double by the end of the year with a focus on hiring in its product and engineering teams.
Ali Rowghani, managing partner at YC Continuity, invested in Zip based on a “realization that the product was so good that it basically sold out, even at first.
A number of early customers told YC Continuity that Zip’s product “solved a very clear problem” and that they were ready to buy even before the demo was over, according to Rowghani.
“Zip’s user experience is among the best in SaaS,” he told TechCrunch. “Beneath this effortless experience lies a tremendous amount of highly innovative engineering. 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.”