Originally published on Procurement Magazine by Aaron McMillan, April 17, 2025.

LightSource Labs, an AI-native enterprise procurement platform, will utilise its seed and Series A funding to scale its team and enhance innovation

In April 2025, LightSource Labs announced it had secured US$33m in funding, from seed and Series A funding at a $130 million valuation to scale LightSource's innovative platform.

The funding round for the AI-native enterprise procurement platform was co-led by Lightspeed Venture Partners and Bain Capital Ventures, with participation from J2 Ventures. The platform is designed to modernise both strategic and direct material sourcing through the application of artificial intelligence.

It comes at a time when the company is obtaining a noticeable amount of market traction – which includes a 10x increase in annual recurring revenue (ARR) over the preceding 18 months.

The business has also secured contracts with some major enterprises across a range of industries, including names like Yum! Brands, Bombardier Recreational Products (BRP), Serta Simmons Bedding, Hello Fresh and Shure.

LightSource Labs has outlined how it plans to use the funds, which includes scaling its team, further enhancing its platform's capabilities, expanding its reach into new sectors such as industrial chemicals and pharmaceuticals, and ultimately solidifying its position as a strategic data repository connecting buyers and sellers across the globe.

Tackling procurement's technology gap

Procurement plays a central role for teams across the world, managing billions of dollars in enterprise spending through the acquisition of materials directly used in producing a company's products. However, it has also experienced a history of lags in technological adoption, particularly within direct sourcing.

LightSource has found that approximately 70% of procurement teams do not use any software tools for sourcing, with a continued effort to manage increasingly complex processes manually, relying on disparate information across thousands of emails, spreadsheets and randomly formatted invoices and contracts.

The company is the first modern platform to finally deliver on the promise of digitalisation for the core direct and strategic indirect sourcing, which comprises up to 90% of the P&L.

"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," says Spencer Penn, co-founder and CEO of LightSource.

The company's solutions are designed to utilise the power of AI to streamline the entire procurement process for both the buyers and suppliers.

Creating value across the supply chain

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.

Anoushka Vaswani, partner at Lightspeed Venture Partners, says: "Procurement is one of the most critical functions in many enterprises but the lions share 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."

Through its AI tools for data-interoperability, LightSource enables users to effortlessly standardise 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. Since 2024, over US$1bn in spend has been processed through LightSource's platform, facilitating more than 1,100 sourcing events.

Roger Larsh, Chief Procurement Officer of RSCS, the supply chain arm of Yum! Brands, adds: "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."

Navigating global trade uncertainty with AI-powered solutions

At a time of such uncertainty across global trade and heightened volatility globally, there is a real need for robust and agile procurement tools including a vital need for a software solution to give users real-time visibility into supply chains, enable scenario planning and facilitate agile decision-making.

Ajay Agarwal, partner at Bain Capital Ventures, adds: "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."