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Agora, a construction procurement platform, raised an additional $33 million series B funding, bringing total investment to $44 million. Investors include Tiger Global, 8VC, Tishman Speyer, Suffolk Construction, Jerry Yang, Michael Ovitz, LeFrak, and Kevin Hartz.
The company helps contractors streamline the paperwork required for ordering and tracking construction materials, an area expected to see an uptick in the wake of the new infrastructure bill in the U.S. The company’s software complements other construction digital twins tech by improving the material management aspects to increase time on tools. The company claims its software can reduce a foreman’s paperwork by 8 hours per week. The investment will help boost its staff and R&D efforts.
The construction industry is ripe for digital transformation. The $10 trillion industry employs over 200 million people around the world, according to McKinsey research. Yet labor productivity has only grown by 0.1% per year since 1947, compared to 3% in other industries like agriculture, retail, and manufacturing.
Agora CEO and cofounder Maria Rioumine told VentureBeat, “Because we’ve so heavily underinvested in construction technology, millions of construction workers across the U.S. still have to rely on manual, pen-and-paper processes for critical parts of their work.”
Simplifying a cumbersome process
Forepersons use Agora to find material, check statuses, and stay updated on when parts are arriving. Office teams use Agora Desktop as their mission control station to manage requisitions coming in from different jobs. “By having both office and field teams on the same system, we ensure increased transparency into where materials are and save both teams a huge amount of time that they can spend on their core competency — building,” Rioumine said.
Customers sign an annual contract for the service priced according to their size. The company has increased revenue by 760% over the past year and increased the number of requisitions processed by thirty times.
Rioumine said that materials management is a cumbersome process that demands a significant amount of office and warehouse teams’ time. Many contractors put blind trust in the supplier to keep track of materials inventory, and others lack a formal tracking process. So Agora is expanding its product with inventory management capabilities that promise to reduce materials waste, prevent overpaying for materials, and help contractors increase profits.
Growing a beachhead
Procurement is a big industry with many well-established players. For example, SAP acquired Ariba for $3.4 billion in 2012. Rioumine believes Agora creates unique value for the construction industry by improving the user experience for trade-specific workflows.
“Building an intuitive platform that contractors love and find easy to use requires a profound understanding of our customers and dedicated focus,” Rioumine said.
For example, the company started with the electrical trade, responsible for over $200 billion in U.S. revenues. This gave them a beachhead on construction projects that has eased the transition into other verticals like mechanical. This follows in the footsteps of former Ariba CEO Keith Krach’s beachhead strategy, who later went on to turn DocuSign into a verb.
“Having our customers evangelize our product has been a huge driver for our sales growth and customer traction,” Rioumine said.
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