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As we’ve reported extensively, construction tech is one of those spaces that has not been considered traditionally sexy. It is, however, an industry that is growing both in terms of the number of companies receiving funding in the space and in terms of more mainstream investor interest. It’s also seeing more exits.
Southern California-based Procore is reportedly working with Goldman Sachs Group to lead an IPO, which could value the seventeen-year-old company at more than $4 billion, according to Bloomberg, which cited “people with knowledge of the matter.” In December, we reported how the company had tripled its valuation to $3 billion after raising a $75 million Series H from Tiger Global Management.
Bloomberg wrote: “The company is preparing an IPO for this year or early next year, said one of the people, asking not to be identified because the information is private.”
I reached out to the company for comment but it declined to provide any.
Last month, I reported on Procore acquiring its third startup in 12 months as part of its plan to broaden its offerings through M&A.
Procore, which operates as a SaaS company, has seen impressive growth in recent years. As of August, it had more than 1,800 employees, up 600 compared to a year ago, across 13 offices globally. Procore has also seen its ARR (annual recurring revenue) surge from under $10 million in 2014 to over $250 million today. In August, I talked with Procore Founder and CEO Craig “Tooey” Courtemanche by phone about the company’s M&A strategy, and he told me then that was “just the beginning.”
Overall, M&A has been rampant in the construction tech industry, as we reported in May 2018. Over the years, large tech companies have been scooping up industry-focused startups that were developing relevant technologies faster than they could. These days, we’re just seeing more consolidation in the space in general, according to Crunchbase data. For example, in June Crestview Partners-backed Congruex, a provider of design and construction-related services to broadband service providers, announced it had purchased Terra Technologies, a specialized civil engineering and construction firm. And, software giant Autodesk acquired three startups last year, including its $875 million purchase of PlanGrid and $275 million buy of BuildingConnected.
Meanwhile, funding in the space appears to have reached a peak in 2018, and has slowed some this year so far. Last month, we reported on Brick & Mortar Ventures closing on a $97.2 million fund to invest in construction tech startups. I’ve also covered a number of recent fundings in the space, while not necessarily large, involved some big name investors. Last week, for example, I wrote about Fieldwire, which has developed a cloud-based software product designed for those working in the construction field, raising $33.5 million in a round led by Menlo Ventures.
Illustration: Li-Anne Dias