The funding brings the company's valuation to US$1.5bn.
According to Zip's CEO, Rujul Zaparde, the funding was initiated by investors, allowing the company to be more aggressive with product development.
Zip's product offering
The core product offered by Zip is a streamlined procurement solution that serves as a "single front door" for employees to initiate and complete purchase requests and vendor interactions.
By providing a codeless interface layered over a comprehensive workflow system, Zip aims to improve efficiency and transparency in the procurement process. Initially focusing on the intake-to-procure (I2P) phase, the company is now expanding its offerings to cover the procure-to-pay (P2P) phase, bridging accounts payable and purchasing departments.
The recent funding will be utilised for further investments in product development, engineering, design and hiring, and the company plans to expand its workforce by approximately 100 employees over the next 18 to 24 months.
Despite the challenges posed by the tech downturn, Zip remains committed to operational efficiency and strong partnership building, and the close association with Y Combinator has been particularly beneficial to Zip's growth.
Consumer and enterprise-friendly: Aesthetics of procurement
Investor interest in Zip was piqued by its unique combination of a consumer-grade front-end interface and enterprise-grade back-end functionality. The company's ability to deliver tangible value to large customers within a short timeframe has garnered attention.
Snowflake, one of Zip's early customers, highlighted the appealing visualisation and customisable nature of Zip's software compared to incumbent players like Coupa.
Problem-solving and steady scaling
Although not yet profitable, Zip is focused on demonstrating capital efficiency and sustained growth. The company's long-term goals include going public while maintaining profitability. However, scaling and maintaining personalised customer interactions present significant challenges, as the company aims to expand its customer base and workforce.
Zip's CEO, Zaparde, remains optimistic about the future and emphasises the upcoming product releases and collaborations in the pipeline. The company aims to address real problems in the procurement space and continue its growth trajectory by providing innovative solutions to its expanding customer base.