LightSource Labs, an AI-based enterprise procurement platform, announced it emerged from stealth with $33 million in seed and Series A funding at a $130 million valuation to scale the company’s platform.
This funding round was co-led by Lightspeed Venture Partners and Bain Capital Ventures, with participation from J2 Ventures. And this platform is designed to modernize both strategic and direct material sourcing through artificial intelligence.
This funding round arrives as LightSource achieves considerable market traction, including a 10x increase in annual recurring revenue (ARR) over the preceding 18 months. And the company has already secured contracts with major enterprises across various industries, including Yum! Brands, Bombardier Recreational Products (BRP), Serta Simmons Bedding, Hello Fresh and Shure.
With this funding round, LightSource will scale its team, further enhance the platform’s capabilities, expand its reach into new sectors such as industrial chemicals and pharmaceuticals, and cement its position as a strategic data repository connecting buyers and sellers across the globe.
Even though the central role procurement plays in managing billions of dollars in enterprise spending, the industry has historically lagged in technological adoption, especially within direct sourcing, the acquisition of materials directly utilized in producing a company’s products.
About 70% of procurement teams do not use any software tools for sourcing. And they continue to manage increasingly complex processes manually, depending on disparate information across thousands of emails, spreadsheets and randomly formatted invoices and contracts. And LightSource is the first modern platform to finally deliver on the promise of digitalization for the core Direct and Strategic Indirect sourcing, which comprises up to 90% of the P&L.
LightSource was designed as a next-generation platform that harnesses the power of AI to streamline the entire procurement process for both buyers and suppliers. And for buyers, the platform aims to automate key tasks such as identifying potential suppliers, managing requests for quotes (RFQs), efficiently comparing bids and fostering seamless team collaboration. For suppliers, LightSource simplifies the process of reviewing RFQs and responding with competitive quotes, thereby facilitating new business acquisition.
LightSource’s AI capabilities for data-interoperability enables users to effortlessly standardize and compare quotes received in a multitude of formats, including emails, PDFs and spreadsheets, with granular visibility down to the Bill of Materials (BOM) level. And since 2024, over $1 billion in spend has been processed through LightSource’s platform, facilitating over 1,100 sourcing events.
LightSource also comes at a notable time amid global trade uncertainty and volatility, highlighting the need for agile procurement tools. And this environment underscores the critical need for software solutions that provide real-time visibility into supply chains, enable scenario planning and facilitate agile decision-making.
KEY QUOTES:
“We want to make the easy things easier and the hard things possible by scaling our AI-powered solutions and converting procurement from a necessary evil to a critical business driver.”
– Spencer Penn, co-founder and CEO of LightSource
“LightSource has delivered faster decision-making and meaningful cost improvements. The team has worked closely with us to understand our business, ensuring that the platform solves our current needs while proactively developing useful enhancements. We’ve seen strong adoption across our team thanks to easy usability and rapid time-to-value, and we’re proud to help LightSource lead the way transforming our industry.”
– Roger Larsh, Chief Procurement Officer of RSCS, the supply chain arm of Yum! Brands
“Procurement is one of the most critical functions in many enterprises but the lionshare of procurement teams manage this process manually, leaving millions of dollars of savings on the table. Idan and Spencer have built a next-generation AI-powered platform for direct sourcing. The user love they have garnered from Fortune 500 companies and the versatility of the platform to handle different industries – from electronics to auto to consumer goods – have been impressive.”
– Anoushka Vaswani, partner at Lightspeed Venture Partners
“With its AI capabilities for data-interoperability, LightSource is fundamentally shifting procurement into the modern era, while driving cost savings for buyers and improving supplier relationships. We’re glad to support Idan, Spencer and the rest of the LightSource team as they become the default operating system for procurement and sourcing on a global scale.”
– Ajay Agarwal, partner at Bain Capital Ventures
