Posted on Friday, Dec 23rd 2016
According to a report from CBInsights, funding in construction tech has grown over five times from 2010 to $254 million in 2015. There are over 30 startups in this space, leveraging mobile and the cloud to facilitate construction design, team collaboration, and project site management. Procore is one such construction tech startup that has just joined the Billion Dollar Unicorn Club.
Carpinteria, California-based Procore Technologies is a cloud-based construction management software company founded in 2003 by Craig Courtemanche. The idea for Procore came when he struggled to manage the construction of his new home in Santa Barbara, from his then-current home in Silicon Valley. This was at a time when tablets and smartphones were not yet widely in use. He then built a web application for online scheduling and answering questions that could be used by his contractor.
Today, Procore provides collaboration software for large teams of construction companies, property owners, project managers, contractors, and partners to collaborate on large-scale construction projects and share access to documents, planning systems, and data.
Although there are other collaboration tools like Google Docs, Procore customizes its tools for construction. There are other major public players in this space that started much earlier. Autodesk (NASDAQ: ADSK), a leader in the space, has been around since 1982 and is currently worth about $16 billion. My interview with Leigh Jasper, CEO and Founder of Australia-based Aconex (ASX: ACX), which was started in 2000, is available here.
From six employees in 2003, the company has 700 employees today. It has more than 2,500 clients including large-scale builder Mortenson Construction.
Procore is also developing on the HoloLens, Microsoft’s augmented-reality glasses so that it could allow people to see a digital rendering of a building before it is built, or it could show where electrical wiring is located even behind a wall.
Procore makes its revenue from licensing. It receives payments for 12-month licenses upfront. In 2012, it had disclosed that since 2010, it had been profitable on an annual cash basis and its revenue was $4.8 million in 2012, growing at 100% every year. It expects to have revenue of $55 million in 2016.
Its public competitor Textura, was expected to have total billings, or contracted value, of $124 million in 2016. Textura has been acquired by Oracle in April 2016 for $663 million. Other competitors include PlanGrid and FieldWire. Procore maintains that it differentiates itself from competition by offering several useful tools for the construction industry on a single platform and by charging per project, rather than per user.
It has so far raised $143 million from investors including Bessemer Venture Partners, Iconiq Capital, O’Connor Ventures, Persistence Partners, Tech Coast Angels, Great Pacific Capital, Jason Finger, and Lumia Capital. In December 2016, it raised $50 million and is now valued at more than $1 billion. An earlier round in December 2015 for $50 million had valued it at $500 million.
With the new funds, Procore plans to expand its product offerings and expand internationally. It plans to open new offices in Australia and Canada in 2017.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
Photo Credit: Danco building services/Flickr.com
This segment is a part in the series : Billion Dollar Unicorns
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