With recent Built World IPOs in question and the COVID-19 crisis gripping the industry and the broader economy, some are asking if the great expansion in Built World tech witnessed in the past decade is at an end. To answer this question, we looked back into our Venture archives and found a discussion with co-founder and former CEO of Textura. Textura’s initial public offering back in 2013, valuing the company at more than $500 million, is still the industry’s largest pure-play initial public offering, and based on this discussion with BuiltWorlds back then, it seems that Textura’s success was actually forged, not in its first few years during a strong economy, but rather in the depth’s of the Great Recession.
Here is how we come to that conclusion: According to a June 2013 report from Reuter’s, Textura had more than 3,000 customers in 2013, and 2012 revenue had more than doubled from 2011 revenue. These were pretty tough years for the US Construction industry. According to the US Department of Labor Statistics, the industry’s unemployment rate was still hovering at around nine percent in 2011. Further, in our 2017 interview with Mr. Allen, he told us that Textura was founded in September of 2004 – two years before Textura had its first customer. This means that Textura signed its first customer just one year before the nation tumbled into its worst recession since the Great Depression yet by 2011, as the industry was coming out of the Recession, Textura already likely had more than a thousand customers and was on its way to the industry’s largest IPO ever.CLICK HERE TO LEARN MORE ABOUT VENTURE OUTLOOK AND TECH STRATEGY FOR A DOWN MARKET
Why Is Textura’s Experience a Signal for the Industry in General? Because Attitude – not Capital – is the Industry’s Top Impediment to Change.
In a recent Analyst Call focused on building technology roadmaps in the construction industry (BuiltWorlds Analyst Call: Building a Technology Roadmap), we surveyed the virtual attendees. Overwhelmingly, their view was that resistance to change is the number one impediment to technology adoption in engineering and construction companies, not the availability of solutions or capital. At the same time, in our Summit workshop with leading industry management consultant FMI, experts from that firm discussed the fact that companies that will fare well in the current environment will be those that are also embracing the need for decisive changes. So, the reason why companies like Textura, that provide solutions to change-resistant industries like those in the Built sector, may actually perform significantly better in down markets than up markets is that their customers are actually much more receptive to their solutions in times of economic distress. In recent analysis, we have already begun identifying areas where we might expect to see the most significant rise in adoption in the current period, and we will continue that effort in upcoming Analyst Briefings and other BuiltWorlds research efforts.