Procore leads surge in 4Q tech investment

by ROB McMANAMY | December 13, 2016

The more things change, the more they stay the same, even in the disruptive world of technology.

Despite a tumultuous November that saw U.S. markets tumble, rebound, and then settle in at a heightened level of uncertainty, December has been surprisingly bullish for construction tech investment. And for Procore Technologies, the month must seem eerily familiar, even joyous, as a lucrative déjà vu has emerged.

For the second year in a row, the Carpinteria CA-based provider of cloud-based project management software has received a $50-million injection of venture capital. And this year's booster shot has even elevated Procore to the rarefied air of being valued at more than $1 billion, the first AEC tech firm to achieve so-called "unicorn" status. Last week, Procore founder and CEO Tooey Courtemanche told The Wall Street Journal that he views his 13-year-old firm's new label as a “badge of pride,” and hopes it will draw even more top talent into its 700-person fold.

Just like last December, the latest round of funding once again was led by ICONIQ Capital, a financial advisor to investment-minded tech executives. The new round also includes additional support from returning investor Bessemer Venture Partners. In a statement, Procore said the new round — which reportedly brings VC dollars to date to more than $140 million — will allow the collaborative team tool provider to expand its current product offering beyond its core project management suite.

"As a customer first business, this funding provides us an opportunity to make an even greater impact," said Courtemanche, who added that 2017 will also see a new international emphasis for the firm. With more than 1.5 million users worldwide, the company already claims clients in 92 countries. But next year, Procore will open its first foreign offices in Canada and Australia, he told reporters last week.

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Of course, Procore is not the only construction tech firm winning new venture dollars this fall. Last week, in fact, Tel Aviv-based Dronomy, a software start-up focused on drone-enabled project data collection and analysis for construction, announced that it had secured funding from Japanese investor Mitsui Fudosan's "global innovation fund," 31VENTURES, which is jointly operated by the Tokyo-based Global Brain Corporation.

As BuiltWorlds reported just last week, drone-based solutions for the construction market, alone, are forecast by Goldman Sachs to surpass $11 billion in the next five years. "Our ability to make consumer drones fly low and close in construction sites, capture the right visual data, translate it into knowledge, and appropriately deliver this knowledge is what makes us different," said Dronomy CEO Ori Aphek, adding that he felt particularly validated to have positive customer feedback "now ratified by one of the world's largest players in our market."

31VENTURES General Manager Akira Sugawara added, "It did not take us long to realize the outstanding business potential of Dronomy, which led us to make our first-ever investment in an Israeli technology company." In addition to 31VENTURES, other existing investors, including Battery Ventures, Lool Ventures, and Oryzn Capital, also participated in this latest funding round. No financial details were disclosed about this funding round, but Dronomy raised $1.5 million in an earlier round 15 months ago. This round is assumed to be at least that large, and probably larger.

Last month here at BuiltWorlds, BuildingConnected, the San Francisco-based provider of time-saving, intuitive bid procurement services for commercial builders made its own big announcement. CEO & Founder Dustin DeVan visited our studios to film a new segment of the BW Venture video series and revealed that "we have closed on $7 million in new financing, bringing our total investment to date to $17.7 million." BuildingConnected's latest funding round was led by Brick & Mortar Ventures, with additional support from existing investors: Crosslink Capital; Bee Partners; FreeStyle; and Homebrew. New backers: Kiddar Capital; Silicon Valley Bank; and Dave Eisenberg, CEO of Floored.

Finally for now, it is worth noting here that the last months of 2016 also included the Oct. 31 announcement by Sarasota FL-based Roper Technologies that would spend $632 million to acquire ConstructConnect, another cloud-based data, collaboration, and workflow automation solutions provider to the commercial construction industry. Roper said then that it expected ConstructConnect to generate approximately $150 million of revenue in 2017. Based in Cincinnati OH, the new Roper property will continue to operate as ConstructConnect and market its software solutions under current brand names, including iSqft, Bidclerk, CMD, and Construction Data.

Of note, Roper in mid-2015 already had acquired On Center Software, based in The Woodlands, TX. On Center targets the estimating, takeoff, and labor-tracking functions with comprehensive software solutions like Oasis Takeoff, Oasis FieldCenter, On-Screen Takeoff, Quick Bid, and Digital Production Control. They now all form a broader suite of offerings that includes those sited in Cincinnati.

ConstructConnect was previously owned by private equity firms Genstar Capital and Warburg Pincus.