It seems like everything is being pushed online now, but network procurement stubbornly has remained an in-person or phone-based negotiation. Lightyear, an early-stage New York City startup, decided to change that last year, and the company announced a $13.1 million Series A today.
The round was led by Ridge Ventures with participation from Zigg Capital and a slew of individual investors. Today's investment comes on the heels of a $3.7 million seed round last October, bringing the total raised to $16.8 million.
CEO and co-founder Dennis Thankachan says that the company has been able to gain customers by offering a new way to procure network resources, which was a great improvement over manual negotiating.
"Last year we launched Lightyear, which was the first tool for buying your telecom infrastructure on the web. And although changing behaviors and the way that enterprises have done things for years is difficult, the status quo in telecom has been zero transparency, no web-based ways to do things, and oftentimes interfacing with really, really large vendors where you have no negotiating leverage even if you're a big enterprise. That experience was so poor that a lot of enterprises were extremely happy to see what we put in the market," he said.
What Lightyear offers is an online marketplace where companies can interact with vendors and get a range of price quotes to make a more informed buying decision. The company spent a lot of time improving the product since last October when you could configure some basic stuff, get a price quote and Lightyear would help you buy it.
Now Thankachan says that the solution covers the full life cycle of services including configuring a bigger array of services, helping manage the installation of the services and helping reduce the amount of delays and errors in installs. Finally, they help track and manage network inventory and can automate renewal for a whole group of services.
That has resulted in 4X growth in just nine months since the last round. In addition, the company had relationships with 400 vendors in October and has grown that to mid-500 vendors today. The startup has also doubled the number of employees to around 20.
Thankachan says that as a person of color he is particularly cognizant about building a diverse and inclusive culture. "I'm a person of color, who has been a minority in different work environments in the past, and I know how that feels and how frustrating that can be for a person who feels like their voice is not heard. [...] So I think we can start to build a culture that is not necessarily the norm in [the telecommunications industry] by trying to give opportunities to [underrepresented] people," he said.
Yousuf Khan, a partner at Ridge Ventures, who is leading the round and will be joining the board under the terms of the deal, says that as a former CIO he found Lightyear's approach quite appealing.
"As a former CIO and someone who has led global technology operations, it’s refreshing to see Lightyear transforming the way business infrastructure gets bought...I wish Lightyear existed during my years as a CIO," Khan said in a statement.