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E6: Four newly funded contech startups
66 Plays3 years ago
In this episode Carlos & Jason discuss four construction tech startups that have recently received some serious funding - as well as the risks of trying to build a software that 'does it all' for construction projects.
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Transcript
Introduction to Offsite Podcast
00:00:00
Speaker
Hey everyone, and welcome to the Offsite podcast where we chat all things construction, technology, and everything in between. My name is Carlos, and I spend most of my days talking to construction teams about how they deliver projects.
Feedback and Focus on Construction Startups
00:00:12
Speaker
And I'm Jason, and I build software for construction. So today we're going to mix that up a bit. We've shared our first few pods with some close mates in the construction industry, and they're keen to hear a bit more about new startups in the space. So Jason, what have you got for us today?
00:00:28
Speaker
So Carlos, like you said, the feedback we got from the first few people that listened to our attempts at podcasts basically said that in construction, it's kind of like a bubble. Then they don't get to hear about the startups that are constantly coming to try and make this like wave of innovation that everyone's always talking about happen.
00:00:50
Speaker
So we thought what we'd try is maybe once a quarter we'd go and pull the latest set of startups that have been funded I guess in the last quarter or raise funding around in the last quarter and pick a couple of them to talk talk about maybe think about whether or not they would
00:01:05
Speaker
be a good venture and maybe talk about what impact that might have on projects and construction teams. So I've gone through the list and I've picked my, I picked, I don't want to say best four, I've picked four.
Spotlight on Jumba: Innovation in Kenya
00:01:21
Speaker
First one, first one is a company called Jumba or Jumba. They recently raised four and a half million is the second round funding. Their prior raise was about a million US dollars. They are
00:01:34
Speaker
in Kenya and the goal of the company is to simplify sourcing of construction supplies. So I guess high level idea is they're essentially like a just-in-time wholesaler for construction materials. So apparently across Kenya, small hardware stores are on almost every block and these hardware stores supply the materials like concrete and bolts and that's where a lot of projects in Kenya.
00:02:01
Speaker
So Jumba aggregates or Jumba and get a right one if I do both aggregates these orders essentially so if you're a hardware store or construction project you order through that platform and they aggregate the orders to get volume pricing and manage the logistics to get the materials to the stores or the projects directly.
00:02:23
Speaker
Just so I'm super clear on this, so instead of the large building merchant that we're used to over here, where they've got a network of stores and supplies, it's the complete opposite, which is lots of independence, all feeding one customer, kind of. Yeah, I think my head when I was reading about it.
00:02:41
Speaker
yeah when i was reading about it i was picturing a lot of like hardware being bought through off licenses yeah it sounds pretty interesting particularly if if you haven't got these large organizations in place you're never going to get decent pricing because independents need to make their margin and you're not going to get that volume the thing that jumps out to me immediately is
00:03:03
Speaker
And if we think about that set up on a construction project in the UK or Australia, quality control seems like an absolute nightmare. If you're sourcing something from 10 different places, how do you know if there's even the right or the same spec every time without checking every batch in the example of, I don't know, concrete?
Jumba's Impact and Challenges
00:03:22
Speaker
So it seems like that's the biggest standout in terms of an issue, I guess.
00:03:27
Speaker
Also, going back to the thing that we were talking about last week around how teams purchase things generally with purchase orders, et cetera, I would imagine that a network of small corner shops, I can't imagine the purchasing infrastructure is anywhere the same as what you'd be used to in the UK. I guess to me the thing that was interesting was it kind of felt like Amazon for construction materials.
00:03:55
Speaker
Down to the way, like even in the UK, if you think about how Amazon uses a network of small shops or off licenses as like a final delivery partner, it'd be slightly different in that I imagine that the hardware stores are making a margin. So from what I read that there's like a pricing through this general platform, the hardware store can sell at their margin and make a margin on the sale.
00:04:21
Speaker
But I'd be worried if I was one of the hardware store owners that essentially as this platform scales, you can imagine the margin gets kind of squeezed out of the whole thing for the, and then they end up just essentially being a delivery depot. Yeah. I mean, you're going to eventually, you're going to have a critical mass where everyone becomes competitive in price and you end up with. Yeah. Yeah. Yeah.
00:04:52
Speaker
To spin it, they've obviously done quite well that it's the second raise and it's multi-million dollars. So there must be some traction. I can imagine over here, if you get works done on your house, the builders are always shooting off the shops to buy various bits and pieces. It's not the same purchasing as a big project, obviously. So there's probably this market in the non-infrastructure critical government project space where it could actually be really useful.
00:05:20
Speaker
So it's yeah it's an interesting concept and there's not really the equivalent here of a platform that sources from multiple vendors that I'm aware of that's just you pick your builders merchant they give you a discount or a trade price and up you go. So in Australia it's even more concentrated you go to Bunnings and that's it.
00:05:45
Speaker
giant warehouses that you just go and sell everything that you could possibly need. I would like to be the commercial lead on that project dealing with all the purchase orders and ads. Like you said, QA and trying to put records together, I don't know.
Rivet.work: Transforming Labor Operations
00:06:02
Speaker
The second one is a company from the US.
00:06:07
Speaker
It's called rivet.work or rivet, the domain is rivet.work. They raise 5.6 million, which takes the total raise the date to 8.2 million. And the high level goal is labor operation software for construction contractors. So the summary is essentially that they help like trade contractors, I think like electrical plumbing contractors.
00:06:35
Speaker
on projects, plan and deploy the people that they have to the jobs or projects that they have. So their platform essentially covers the planning of work. You've got your resources as your people in this platform. And then you're assigning the people to those jobs and then sort of sequencing up so that they know that across the next week, these are the jobs they're doing.
00:06:58
Speaker
and there's like a mapping component, so presumably like the things that are kind of close to each other, they're the ones that you do together. And you say jobs, do you mean activities that are projects or multiple projects?
00:07:11
Speaker
No, I think smaller projects, like a trade contract that might have one job that lasts a couple of days, but might also have three jobs in a day, that type of thing. They can schedule the work, essentially get that into a to-do list to all the people, and then have them logged that they've done that thing.
00:07:36
Speaker
US, I think they were in a bunch of states, I think originally from Detroit, and yeah, 5.6 million raised, so that's not nothing either. There's definitely a space for that type of process that I've not seen tackled here.
00:07:51
Speaker
where each morning you've got your superintendent or you'll see the informant on site going, right, you three guys are on this task, give you three guys on this task. So most people resource load a program saying, I need three Sparkies and three pop creatures, but they don't say who's going to be there. Can we make assumptions on who that probably is going to be because they're in a gang and they're led by supervisor X. So I can imagine there's definitely a space here
00:08:20
Speaker
which sort of validates it as sounding like quite a useful app because at the moment that's all done verbally as far as we're aware of projects and we've had requests to be able to do something like that which is ultimately building out a site diary at the end of the day too because it shows who did what and where.
00:08:36
Speaker
Uh, looking at the platform, it's clear that they have this niche of like trade contractors as their customer, um, which, you know, a decent bunch of people in a company going to potentially multiple jobs every day. So there is like a forecast thing and then a sign like a daddy Sullivan or one of the big labor guys here, that sort of thing.
00:08:55
Speaker
Yeah, probably.
Integrating Labor Planning
00:08:56
Speaker
Yeah. I was surprised. I don't know. I'll send you through the link here, but I'm surprised by the interface of the system. It kind of looks, it's hard to throw stones because our early versions were not beautiful at all. But it does, it looks pretty dated. I don't know if you've got it there. But going to what you were saying, which is like, if you just think about this similar problem in larger projects,
00:09:25
Speaker
I'm somewhat surprised it's not a solved problem, but it's also very hard. There are platforms like Assignr and Bridget Bench, which one's US, I think the other might be Australia, I can't recall, which tried to do what you described, which is some amount of, instead of just saying I need three electricians, saying it's these three electricians. But if we think about how
00:09:54
Speaker
Labour gets allocated on a typical construction project. That labour allocation, I don't know, in my experience happens on the day almost, the morning of the, you know, the pre-start. Yeah, I've seen it in utilities a lot. So they get, you get like a bunch of tickets effectively, which is, this is your to-do list. And there's a system that basically plans out, right, you're in this area, so you can do these four things.
00:10:20
Speaker
And from what I've seen, they're always in-house systems. So we wouldn't really see it online because they're not selling it. They're not doing anything with it. It's just there. So there was a guy here the other day, BT, just doing internet. And he was like bashing away on an app. And it looked awful, but it just manages this whole day. He just follows the app and it tells him what to do, where to do it. And yeah. But on bigger projects, do you think that
00:10:47
Speaker
do you think that there will ever be a place where people are signing beforehand, substantively beforehand, the individual people to the schedule or to a plan? For me, the most likely, and comparing it to how a project is currently functioning in terms of daily routine and meetings, I'd imagine at the end of the day, your end of shift
00:11:14
Speaker
type meeting where you wrap up, discuss what happened, you probably think about tomorrow, right, who's going to be on which activities. So you might have the former saying, right, ABC is doing this. So when they come in the next day, you've got your start to shift, but it's not what am I doing today, it's your sort of, you're in the zone, you're going to have some sort of safety briefing and the general start shift bits and pieces. But you already pre assigned to the work that you're going to deliver.
00:11:43
Speaker
rather than in the morning going right you're working on this and yeah i immediately think about how difficult like because it gets quite bitty and small and like i'm struggling to imagine um from a software perspective an interface that does this you know
00:12:01
Speaker
I've known a way to take the suit because it's done by the supervisor usually like they're the person charged with the people so and it you know my experience they make it up in the morning before they go the pre-start meeting
00:12:19
Speaker
So I really, cause if you could assign them to that, you know, you tie that information with gate entry records and when people go and leave and like you basically got a complete side diary almost like from what everyone was doing. Cause if you know what tasks are assigned to, you know, when they came and left, you've got you completed side, you just say, yes, that was it or no, it wasn't. So it'd be great if you could, but I, I, I.
00:12:43
Speaker
I can't imagine, I'm just picturing all the supervisors I've worked with and I just can't imagine that they've got either the time or that a software could be simple enough to not make it cumbersome. Yeah, you want that bit of fluidity in the morning to just deal with what you have rather than trying to predefine everything.
Spectre Automation: Revolutionizing Construction Execution
00:13:04
Speaker
Okay, third one, keep us moving. Now we're back over to Europe. We're talking about Spectre automation. They raised 2.7 million euros. And the pitch is the model-based construction execution system for managers and foremen. So that's everything. Yeah.
00:13:28
Speaker
So to make, to give you a bit more detail on that, I'll send you a link through here. You could tell me any of these before. I tried to digest that. Um, so this is, yeah, this is, this is a space that we're familiar with, right? And so they, they're, the summary is that they, they claim to have like an X dimensional. They use the, the, the letter X or the algebra dimensional model.
00:13:55
Speaker
linking BIM plus schedule plus a weekly plan plus something else to get to X dimensions. So it seems to be a way to visualize model plus visualize schedule plus visualize like a weekly work plan type thing and then run some sort of calculations over data to output more data.
00:14:23
Speaker
Yeah, I guess the space that we know well in terms of communicating plans, what do you think of this approach? And good logo, by the way, for those... It's cast for the ghost. Yeah, it immediately reminded me of James Bond, I was hoping. Yeah, it looks pretty interesting. Do you think this is connecting into P6 and Asta in terms of schedule?
00:14:51
Speaker
I don't think from what I could say, I don't think that they do the scheduling in the application, but that I may be wrong, but I didn't see anything that gave me that indication. So there must be, must be essentially like a visual, like a visualization piece to pull like from a model. I don't think they're building the model there obviously. So visualizing model and schedule and then maybe outputting the weekly plan. Yeah. So I guess the.
00:15:21
Speaker
Obviously, if you can fire a 3D model, visually represent where activities taking place, where people are working their plan from the day, like, that's got its clear advantages. Like we spoke about the other day with like the poor the sort of visualizations that people build in things like synchro just to show people, and you can obviously understand everything in a short period of time. Yeah, it's
00:15:48
Speaker
It's pretty slim on the website. See that information. For me, I just immediately put my product hat on because this is a problem. This is very similar to the problem that we have to deal with. And from a product side, scheduling plus anything is so hard because
00:16:10
Speaker
From a UI perspective, the schedule has so much information that needs to be presented at the same time already. So if you have a Gantt chart, you've got tasks, you've got data information, you've got lots of columns open. Oftentimes there's some sort of toolbars and controls. As soon as you have a Gantt,
00:16:29
Speaker
Yeah, as soon as you've got a Gantt, you've got a ton of things trying to fit into one interface. And then you add any like map or BIM element. And in my opinion, it's game over. Like you just can't have so many things going on on the screen. Obviously, like Synchro and tools like that do like split screen. Yeah. But unless you've got a very super power user on a massive screen, it's really difficult.
00:17:00
Speaker
And there's also like a context switching problem. So you're like looking at the schedule, you're looking at dates, and then you've got to jump back to the model. What dates were things that I'm looking at? Like when you're editing a video, I guess you've got the same problem. You're switching up what's on the video and the timeline, because that's time moves the video moves. Yeah, it's really hard interface. And you know, they're going after their goal is to target Foreman as your user.
Challenges with Spectre's Integration
00:17:26
Speaker
There's lots of
00:17:27
Speaker
sort of ideas or tools that sound nice in theory but if you immediately place yourself on site and we have the benefit of doing that because we've done some construction projects it's suddenly it's almost like the crazy box to think that everyone will be in something like this every day this what will not be that simple BIM model related system to say like
00:17:55
Speaker
allocating works outside. It works lovely and really well on the 30-inch MacBook screen in your office for the developer. But when you get on site and you've got a third... I've got someone's old laptop that's been handed down from when they left the company that's like,
00:18:18
Speaker
13 inches wide and caked in dirt. The best one will be when they say, oh yeah, cool, can you send me a print? A 4D model. Based on the limited screenshots we can see on the website, it doesn't look like it's going to be super simple.
00:18:41
Speaker
Complexity for site teams, we know, not ideal. They got such a small amount of time to digest information, let alone learn how to use this piece of software. So I'd say it's fairly punchy, but I can imagine on sort of smaller jobs. And we've got an example here, which is like a resi scheme, a bunch of flats where maybe you've just got one or two foremen and they are pretty keen on something like that. You can probably implement it pretty well.
00:19:07
Speaker
move to a job where you've got hundreds of guys on site and lots of supervisors. It's going to be hard going, isn't it? How many small resi jobs have linked 4D jobs? This is the first one I've seen. I've got that experience in small resi schemes. I would bet it's like a handful
00:19:33
Speaker
Anyway, super tough challenge.
Kewazo's Liftbot: Safety and Efficiency in Scaffolding
00:19:35
Speaker
Good luck, John. So, the final one is the big one. So, a company is called Cavazo. It's spelled K-E-W-A-Z-O. They're from what appears to be Germany, I think Munich. And I'm going to send you a video which Joe and the team might need to edit in here. The first sort of 20 seconds, I'll let you watch it.
00:20:01
Speaker
Scaffolding, a difficult job for real men with great endurance. Every day at any given construction site, scaffolders transport up to five tons of materials in all weather conditions. But fewer and fewer want to do the job because scaffolding today remains an alarmingly dangerous and difficult manual activity.
00:20:20
Speaker
KVASO cares about people. As a result, KVASO introduces Liftbot, a robotic construction lift that supports scaffolders by automating operations. All right, cool, back on. Obviously, the best line is for real men with... Yeah, yeah, I thought you'd meet this scaffolding. I was like, oh, fucking hell, they can't come to Europe, can they? They'd be like, uck of dogs. This is for real bed on sites.
00:20:48
Speaker
What a lie. They are from Europe. They're from Germany. I'm sorry. So they assumed it would be like Texas. Yeah, yeah. No, no, no. And I didn't mention it before, but they raised 10 million, which would take their total amount raised to 20. And so for those listening at home, essentially, you know, what we've got is a tracked scaffold lift. So a scaffold lift that attaches to the outside of scaffolding tear.
00:21:16
Speaker
that has a platform and like a track on the inside of that frame. And then this little robot will climb, will roll up and down this frame, essentially lifting scaffold from ground to the level that it's needed. It's powered by a battery. It takes 20 odd minutes to set up and then can sort of quickly move scaffold from top to bottom.
00:21:39
Speaker
It's just for men. It does look very cool. Like it looks like a cool gadget. If you've driven around London ever, you've seen the thing where there's like six people from a scaffolding van lobbing scaffold up to each other, like one to another to another, making like a scaffold conga line.
00:22:05
Speaker
So I'd imagine from a return on investment calculation, it's really easy. Like, can you drop three people to two in your crew? And what does it cost? What does what do you pay one person? And if this is letting you do that, it's a clear win. What do you think? Are you buying one? The immediate thing was obviously safety. So you mentioned there about the volume of guys who are trying to
00:22:34
Speaker
pull up equipment. My own experience of scaffolding obviously I was curious before so obviously I wasn't out looking at inspecting or touching scaffolding very often but when on the back of college I actually worked in a scaffolding yard as one of these temporary jobs and
00:23:02
Speaker
I had to basically in the rain make piles of all the bits and pieces and just the like fan screw bits that you can sort of screw on the end poles. They are heavy. If someone drops one of those off the scaffolding, like you're doing serious damage whether you got a helmet on or not. So to start scaffolders throwing those things around must be a big win.
Reducing Labor Costs and Improving Safety with Liftbot
00:23:26
Speaker
It makes a lot of sense for any scaffolding company because they can reduce headcount on jobs without compromising safety. That's a massive win. You can see why they raised so much money. I don't know what BC is investing in a company that's only for men. That seems a bit nuts.
00:23:41
Speaker
But like, but there was also a thing at the moment, right, which exists, which is just a pulley hoist. So there's a little attachment, you stick in the top of the scafftub of the level that you're up to. And it's got two wheels, so it's like gear, then you just... That's like saying, why build a wind farm when you can build a windmill? Like, one of the old Dutch ones, like... Is it? It's perfect when it is slow. Yeah. You want something like an electric being up and down.
00:24:26
Speaker
Yeah, it looks cool. It clearly has use, which is saving cost or improving margin for the scaffolding company.
00:24:37
Speaker
improving safety i'm gonna guess it's not tens of thousands of pounds and you probably hire it rather than have to purchase that's the thing that blows my mind which is like the fact that they've raised 20 billion today
00:24:51
Speaker
just from a just from the economics of that working you'd have to be projecting like a massive market like global scaffolding market or something and pretty big margins because like even if it is expensive it's expensive to make it's got a battery in it yeah motor in it um yeah your your current manufacturing is going to be yeah so for that to make for that to make sense like i really can't and yeah i can't
00:25:19
Speaker
And I also, I can't imagine that what they've built is so, um, is protectable, like from an intellectual property perspective, because even if they've got something unique about the gear system, like there's so much that you could tweak and change to, if it is good, just cut, like if it's successful here, someone in the U S makes an exact replica. So I really don't, yeah, I struggled to, I think it would be great. Like if I had a scaffold and I think it would,
00:25:48
Speaker
Yeah, if you are on site now on infrastructure projects in the UK.
00:25:54
Speaker
Do you think you could just say get me one of those and install it? Or do you think there's going to be all sorts of hurdles and safety and documentation? I think the first time you do that, whenever you commission a crane or anything that lifts anything on a construction site, you have to commission it. And I don't know what it's like in the UK because I've not commissioned it on there. But in Australia, you get a body that comes to inspect
00:26:19
Speaker
Um, that your thing is ready and commissioned and signs it off. Um, and so I don't know whether this would get classified as like a lifting device or a crane. Cause if it does, then it's, then it's definitely not 20 minutes. So hopefully it isn't, I'd imagine it's no different to like a normal poly lift or something. Yeah.
00:26:44
Speaker
You can imagine it's got power safes built in too heavy or it's not stacked in the right way. Then you've got to keep getting it. It's got to be keep getting inspected or whatever. Because if something like that breaks and then drops on a piece of stuff or drops. So you could imagine someone in a safety team taking it to the nth degree and making it too hard to purchase or hire or whatever. It's still working their messaging a bit.
00:27:15
Speaker
That's the summary there. So that's like four software or technology companies that have raised money in the last, let's say two, three months.
Reflections on Construction Technology
00:27:26
Speaker
Yeah. I think it's an interesting overview of like the breadth of what is construction technology. And I guess the places people find problems or things that need solving and the different ways that people go about about solving them.
00:27:42
Speaker
Yeah, pretty interesting that they're all like proper site related technology as well. So we see so much around like, obviously, for the back of office type stuff, which is only for a select number of people on site. So this is actually directly going to help people deliver jobs out in the field, which is cool. Awesome. Thanks for that, Jason. That's pretty much all we have time for today. So as always, thank you very much for listening.