The long anticipated Procore IPO has arrived, and it has not failed to deliver. Rumors have swirled for some time about when and how big the construction software startups offering would be. Speculation intensified from 2016 through 2108 as players like Trimble, Oracle and Autodesk spent billions snapping up Procore competitors like ACONEX, BuildingConnected, Plangrid, e-Builder, and Viewpoint (M&A Activity Spells a New Future for the Built World).
2016 Procore “First Rings the Bell”
Some trace the run in construction tech software valuations to the Textura IPO back in the spring of 2013. The first pure play construction tech IPO, Textura raised eyebrows with an initial offering valuing the company at more than $600 million. Others cite the advent of cloud-based, mobile apps as the trigger that opened the door to the massive industry where it had previously been impossible to bring tech to the job site on a mass scale. From that point, as our member surveys show, construction companies have been adding to their ‘virtual design and construction teams’ and increasing their spending on tech.
We have hosted hundreds of tech entrepreneurs, catalogued more than a thousand startups, and recorded more than 200 construction tech demos since PROCORE CEO, Tooey Courtemanche presented back in 2015.
Others point to Procore’s first big raise back in 2016 as the industry’s inflection point. As we highlighted in our earlier report:
That all changed in December 2016, when Procore, a construction project management software that was founded in 2002, raised $50 million from investors and boasted to a valuation of $1 billion. “Procore really rang the bell in 2016,” said Travis Connors, the Co-Founder and General Partner at Building Ventures, another fund focused on the built industry. “They offered a well-integrated set of solutions along with a marketplace of feature functionalities.”
The M&A flurry that ensued quickly quelled questions about that billion dollar valuation.
So Where Does Procore and the industry go from here?
No doubt, people will again be asking the question of whether a $10 billion valuation for a construction tech company is justified and where Procore could go from here. For some clues, we took a look at another briefing we penned about a different industry technology leader, Autodesk, back in December (Outlook 2021: Toward a $100 Billion AECO Technology Company). There, we looked at how the pieces might come together for a $100 billion AECO Technology business spanning the full life cycle of projects, covering all segments of the market, and operating globally. Based on our member surveys, Procore is already dominant in key categories including project management, and, armed with freshly raised $634.5 million in capital from its IPO, Procore could make some more significant moves to fuel expansion.
Procore VP, Corporate Development to Speak at BuiltWorlds Summit
We will learn more when we have the opportunity to hear from and visit with Procore VP, Corporate Development, Meg Baldini at our US Summit in Chicago this September 1st and 2nd. It seems certain that this move will set off significant additional activity in the industry, as investment, adoption, and interest in the once sleepy “AEC Tech sector” continues to grow around the world. According to the US Census Bureau, construction spending in the first quarter of 2021 in the US was up 5% over last year’s first quarter and reached an annualized rate of more than $1.5 trillion. Construction is, thus, a giant sector of the global economy still early in its digitization. There are many sub-sectors and technology themes still emerging, and moves like Procore’s IPO will support more funding and investment across the ecosystem, meaning there will be much more to examine in the months and years to come.