Among the daily swirl of advancements and announcements from a range of FinTechs, InsurTechs and health techs comes word from a lesser known — albeit equally busy — quadrant of the digital shift: construction tech.
“The construction, manufacturing and industrial industries are really facing unprecedented challenges, but also huge opportunities,” RJ Ancona, VP and GM of B2B for global merchant and network services at American Express told PYMNTS in a recent conversation.
In the wake of a 3 percent or $15 billion incremental increase in business spending on buildings, construction and maintenance in the first quarter, Ancona said the uptrend is expected to continue throughout the year.
However, meeting that rising demand can be tough when supply chain delays, antiquated technology and back office methodologies are factored in, a reality that makes the case for investing in construction tech all the more pressing if these opportunities are going to be unlocked.
Assignar’s $20 Million Bump
While most construction tech firms focus on general contractors, Assignar leverages its cloud-based efforts around the subcontractors within the market. The firm has announced its $20 million Series B funding round, bringing its total raised since its 2014 founding to $31 million.
“I had 100 crews and workers out in the field, lots of heavy equipment and project work, and was running the entire business on spreadsheets and whiteboards,” Co-Founder, CEO and formerly-frustrated contractor Sean McCreanor told TechCrunch. “With Assignar, we essentially help the office connect to the field and vice versa.”
The firm’s core offering is a cloud-based operations platform that makes it easier for contractors to offer up a granular, real-time snapshot of activity in the field on a construction site, with an overall goal of streamlining operations and schedules, upgrading crew and equipment tracing, and improving the quality and safety of projects while making them more efficient and productive.
Assignar has seen demand surge for its services and says revenues have doubled year-on-year every year since its founding in Australia in 2014. As a result, the company plans to grow its North America business, which currently accounts for a quarter of its total revenue, and double its headcount, alongside increased investments in artificial intelligence (AI) and machine learning to enhance its core product.
Procore’s $11 Billion Public Market Debut
One of the better known firms in the emerging construction tech market, Procore Technologies, is fresh off its previously delayed initial public offering (IPO) in late May which gave it a market valuation of around $11 billion as well as fresh capital to work with.
“We saw the progress in our industry’s recovery quarter after quarter, and figured this was the right time to go ahead with our debut despite day-to-day fluctuations in the market,” said Founder and Chief Executive Officer Craig Courtemanche.
Procore’s cloud-based construction management software is currently used by around 1.6 million companies in over 125 countries worldwide. In business for nearly 20 years, the firm is best known for offering real-time access to project information, simplifying complex workflows and lowers costs for construction firms — lowering the likelihood of delays and cost overruns.
But while the trend in the market is growth, and big debuts and IPOs are part of the narrative, not every story in construction tech is about victory.
SoftBank-Backed Kattera Is Closing Down
SoftBank-backed construction tech startup Katerra has officially announced it will be shutting down operations, after burning through a reported $2 billion in funding. The firm had previously boasted of having over 8,000 employees worldwide, but has recently struggled to find takers on its core offering of cheaply built properties for real estate developers.
The firm faced bankruptcy in late 2020, pushed there by the climbing labor and material costs. SoftBank offered the firm a last chance bailout of $200 million (having already invested billions in the firm). But Katerra was unable to climb out of the hole it had previously dug, and has hence won itself the dubious distinction of being SoftBank’s highest profile failure since 2019’s WeWork debacle.
So far, Katerra has been unavailable for comment on its forthcoming closure.