Procore’s CFO says many construction companies still use pen, paper, and fax machines.
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Procore Technologies is looking to modernize the construction industry, which it says has been slow to adopt technology that could save vast amounts of money.
Founded in 2003, Procore (ticker: PCOR) provides cloud-based construction-management software that enables its customers, including owners, general contractors, and architects, to collaborate using an internet-connected device from any location. It has 10,166 customers including Brookfield Properties, Lennar (LEN) and Weitz.
The lack of internet, Wi-Fi, and mobile connectivity has held back the construction industry’s adoption of technology, according to the Procore prospectus. Paul Lyandres, Procore’s chief financial officer, estimates that about 50% of new clients are companies that still use “pen, paper and office fax machines.” The construction industry wastes billions of dollars by “not having the right people in the right place with the right information at the right time,” he told Barron’s.
Procore is trying to change that. Its software allows users to track costs and access what has been built in a project, while understanding the status of every contractor working in the field. Customers, which range from small businesses to large enterprises, use its software to run their businesses more efficiently.
Global construction spending is expected to hit $14 trillion a year in 2025, according to McKinsey. “This is truly an opportunity to digitize an analog industry. We think this market has massive opportunity for many players to build a big business,” Lyandres said.
The Carpinteria, Calif. company actually filed to go public in late 2019 with plans to launch last year. Then the Covid-19 pandemic hit, causing businesses to shut down across the U.S. and slowing down construction projects.
“COVID was not an easy time for the construction industry,” Lyandres said. “We had a responsibility to make sure our employees were safe. We were focused on doing everything we could to help the industry during this difficult time.”
It refiled earlier this year for the IPO. Procore opened for trading Thursday. The stock kicked off at $84, hit a high of $90.05, and closed at $88, up 31.3% from its IPO price.
Procore plans to use proceeds from the offering to “invest in the industry, in products,” he said. It has been acquisitive, buying its sixth company, INDUS.AI, just weeks before going public. “We want to help our partners, the industry get back to doing what they love to do, which is to build,” he said.
Write to Luisa Beltran at [email protected]
