Funding for construction technology reached $2.1 billion last year in the United States, a 100% increase from 2020. The construction industry represents 6.3% of US GDP.
Two US fintechs/proptechs focused on the construction industry – CoFi and Handle – raised $7m and $10m respectively.
Based in Utah Cofi raised $7 million in a seed funding roundled by Blackhorn Ventures, MetaProp and Tenacity Venture Capital.
With the new funding, CoFi says it will “help builders deal with the country’s housing supply crisis, first by getting projects funded faster, and then by getting contractors to pay in as little as four days – a huge improvement over the 74 days they might have to wait without CoFi.”
CoFi was founded in 2018 by Mike Lacey and Cam Harris, themselves contractors and developers in the construction industry. Frustrated with the process, they launched CoFi “to turn the manual, time-consuming funding process into an on-demand, fast, easy, and seamless process.”
CoFi’s offering includes Construction Lending Marketplace and Digital Lending Platform.
“At CoFi, we stand up for our builders and developers. We have seen how frustrating it can be to spend valuable time and energy applying for loans and going through legal steps to get our teams paid quickly,” says Lacey.
“We’ve integrated CoFi into the kind of tool I wish I had as a builder – one in which we’ve replaced dispatching inspectors to a job site with technology-driven remote inspections to capture the progress of the project and allow the developers to approve the distribution of funds.
“This flexible pay schedule significantly improves on the industry standard of a 74-day pay cycle, and it can make all the difference to a builder who might otherwise lose good workers because they can’t get paid. fast enough.”
The start-up “is at the junction of construction and fintech”, explains the founder and general partner of Tenacity, Ben Narasin.
“There is competition in both industries, but CoFi is the only company to offer both a lending marketplace and industry-specific SaaS (Software-as-a-Service) payment software.
“With billions of dollars in loans through the CoFi platform in less than a year, the opportunity is limitless.”
Based in California To managea construction payment compliance software platform, closed $10 million in Series A funding led by Energize Ventures and Ironspring Ventures.
Founded in 2018, the startup says it will use the money to grow its support, engineering and sales teams across the United States.
Handle CEO Patrick Hogan, who grew up in a family of logging contractors, says his company “solves one of construction’s most critical and complex workflows: payments.”
As one of the sectors expected to see a ripple effect as a result of the bipartisan infrastructure bill, construction is currently facing a dramatic increase in daily sales (DSO), he explains. From 2020 to 2021, DSOs increased by two weeks, from 24 to 38 days.
Backed by Y Combinator, Handle already counts some of the biggest names in construction among its clients, including CRH/Oldcastle, US Concrete and Apogee Enterprises.
He says he has increased his income by almost 500% in the past 12 months.