Lightyear snags $13.1M to boost telecom procurement platform

close-up of money
Alongside the new funding, Lightyear announced Ridge Ventures partner Yousuf Khan will join its board. (Pepi Stojanovski / Unsplash)

U.S. software company Lightyear raised $3.7 million last year to fuel the launch of a novel platform that enables enterprises to buy and manage their telecom and IT services online. Now, it’s looking to double its headcount and scale its go-to market operation after scoring a fresh $13.1 million cash infusion from investors.

Founded in July 2019, Lightyear has two primary offerings. Its Lightyear Procure dashboard allows enterprises to buy network infrastructure services spanning internet and WAN connectivity, colocation services and voice systems. Once contracts are signed, Lightyear Manage lets customers oversee implementation, track network inventory, handle carrier issues and automate renewal bidding. It secured seed funding to launch its platform in October 2020.

Lightyear CEO Dennis Thankachan told Fierce it has gained significant momentum despite launching in the midst of the Covid-19 pandemic. He highlighted logistics, industrial, retail, financial services and tech as key growth verticals. He noted several internet service providers “actually use us to buy their backhaul and private cloud infrastructure as well.”

“Tons of things that are not offices still require high-bandwidth network infrastructure, and we are seeing office demand starting to come back slowly,” he explained.

The executive said the company plans to use the fresh batch of funding to boost its employee count from 17 today to somewhere between 30 and 40 people. “Most of our hires will be in sales and engineering as we scale up our go-to-market function and continue to improve Lightyear's product capabilities,” he added.

RELATED: Lightyear raises $3.7M to simplify how enterprises buy network services

Its latest funding round was led by Ridge Ventures with participation from Zigg Capital, Starwood CEO Barry Sternlicht, Door Dash executive Gokul Rajaram, Live Nation CEO Michael Rapino, Invitation Homes founder Marcus Ridgway and Atlantic Metro founder Stephen Klenert. Previous investors, including Amplo, Susa Ventures and Ludlow Ventures, among others, also participated.

Alongside the new funding, Lightyear announced Ridge Ventures partner Yousuf Khan will join its board. Khan has served as CIO at several companies including Qualys, Pure Storage, Moveworks and Automation Anywhere. He told Fierce he was compelled to invest after seeing Lightyear’s platform in action.

“This comes from a vantage point of having done it before, I just think it could substantially reduce the time [spent on procurement] by probably upwards of 70%,” he said. “Ultimately the process has been pretty manual and disjointed and now its online, centralized and much more efficient.”

He added his role on the board will be “to be a good listener,” provide feedback and guidance to Lightyear’s executives and act a “thought partner” in terms of the product roadmap. Khan said he also expects to serve as an ambassador for the company given his connections within the CIO community.

Since last year’s seed round, Thankachan told Fierce the company has seen a fourfold increase in paying customers, though declined to disclose its exact user count. He added “our largest customers have significantly grown account values with us, and referrals have been our biggest growth channel.”

Thankachan said the company views global business telecom as its addressable market, and is chasing a cut of the $1 trillion spent on such services each year. It currently has more than 500 telecom and IT vendor relationships. Thankachan said thus far its partners “like working with us, as our software helps handle aspects of lead gen[eration], configuration, quoting and sales on their behalf. Our product should help telecom vendors continuously improve sales efficiency and access to deals."