Dive Brief:
- Caterpillar has acquired heavy equipment sharing and management tech startup Yard Club, according to TechCrunch.
- Yard Club has been working with Caterpillar dealers to help them rent and sell equipment through its platform since Caterpillar invested in the startup nearly two years ago. Before Caterpillar made its investment, Yard Club had already drawn $1.6 million of venture capital and has raised a total of $5.1 million to date.
- Yard Club employees will remain in San Francisco and serve as Caterpillar's "digital presence" in the area. Company representatives did not disclose additional terms of the deal.
Dive Insight:
While Yard Club started out as an equipment sharing company, it has shifted some focus to management tools for those renting or leasing equipment, including maintenance, scheduling and inspection-related functions. Still, according to the company, its platform handled $120 million in transactions in 2016, representing 2,500 contractors and rental companies.
One of Yard Club's major competitors, EquipmentShare, has raised nearly $34 million in investments to date. Some have called the company the "Airbnb for construction" because of equipment owners' ability to make money on their equipment during down time and also because users can reportedly rent that equipment at below-market rates.
The Yard Club acquisition isn't the only plunge Caterpillar has taken into technology, however. In October 2015, the equipment giant and other investors delivered $45 million to data analytics startup Uptake, bringing its valuation to $1.1. billion.
At the time, Caterpillar and Uptake were working together to transition sensor technology from locomotives to construction equipment. Caterpillar's investment in Uptake indicated increased demand for tech that can accurately predict future performance and failures before major incidents or malfunctions happen. Later in 2015, Forbes named Uptake the hottest startup of the year.
The Yard Club deal comes on the heels of Caterpillar's January announcement that it will move its global headquarters from its home of nearly a century — Peoria, IL — to the Chicago area so that it could be more accessible to its global clientele and tap into the younger, talented labor market there. In April, the company said it had chosen an existing building in the Chicago suburb of Deerfield, IL, for its new headquarters. The majority of Caterpillar's 12,000 employees will remain in Peoria, while approximately 300 will relocate to Deerfield.
