Dive Brief:
- Construction industry startup Architizer has scored $7 million in Series A financing for its product sourcing and specification tool for architects, Dezeen reported.
- The Architizer software links architects with vendors who pay Architizer via transaction fee or software procurement tools, according to TechCrunch. In a private beta test last summer with only 10 architecture firms, the platform was able to source $50 million worth of product deals, founder Marc Kushner said.
- Architizer started as an online portfolio service but has expanded to host a database of 120,000 projects, editorial content and the international A+ awards. Architizer is planning a public launch at the end of 2016.
Dive Insight:
Kushner said that although architects order tens of billions of products in the U.S. annually, there’s no transparent marketplace.
"It’s no secret that there are huge transformations going on in entrenched markets, whether AirBNB for accommodations or Uber for taxis. Architecture deserves its own revolution, and this Series A helps us get there," Kushner said in an announcement on Medium.
Looking to the future, Kushner said despite the ups and downs of construction cycles, he believes an architecture startup is still a profitable business idea.
"Architecture billing is a key economic indicator for a good reason," Kushner told TechCrunch. "We are the first to get hit in a recession and the first to recover. The industry is highly susceptible to macroeconomic trends; however, construction never stops — even in a downturn."
Investment and interest in construction tech startups is booming. Last year, PlanGrid raised $40 million from investors in Series B financing, and Caterpillar-backed Uptake Technologies beat out companies like Uber and DoorDash to claim the title of Forbes' hottest startup of 2015. And a recent valuation of construction industry cloud software startup Procore, after a late-2015 $50 million investment, puts it nearly on par with Textura, its publicly traded competitor.
Experts say that the onslaught of tech tools for the AEC industry is directly related to the proliferation of mobile devices. TechCrunch noted that the recent surge in construction startup activity and the investment in Architizer shows that "if you're building it, venture capital will come."
