Finalcad, a mobile platform that enables the construction industry to digitize much of its processes, has closed $40 million in Series C funding. The round was led by publicly listed London venture capital firm Draper Esprit, and Cathay Innovation, with the support of Salesforce Ventures. Existing existing French investors Serena, Aster and CapHorn Invest also participated.
Funded in 2012 by Jimmy Louchart, Joffroy Louchart and David Vauthrin, Finalcad has set out to solve the construction industry’s “chronic low productivity” problem. The Paris-based company has developed a SaaS and mobile app to help construction workers and other construction stakeholders collaborate digitally, which is believed to be the key to removing many of the efficiencies in construction.
Specifically — and according to McKinsey — labor-productivity growth in construction has averaged only 1 percent a year over the past two decades, compared with growth of 2.8 percent for the total world economy and 3.6 percent in the case of manufacturing. The construction industry is also lagging behind in terms of digitization: MGI’s digitization index places it among the least digitized sectors.
To help remedy this, Finalcad’s SaaS lets construction site engineers, foremen, architects and consultants work together via the Finalcad mobile app, enabling collaboration across a wide variety of workflows both on site and at the office.
Along with acting as a communication tool — akin to a ‘Yammer for construction’ — the software also enables stakeholders to work on drawings, BIM models, tasks, controls, safety procedures and progress monitoring. From this vantage point, Finalcad is able to provide insights and “best practices at a company level,” powered by its analytics technology.
On who Finalcad’s competition is, unsurprisingly co-founder and CMO David Vauthrin says it’s a “mix of paper and pencil, excel sheets, and IM platforms,” such as WhatsApp or WeChat etc.
“On direct competiton, we face some players, but they are all very small companies, limited to one trade (e.g. buildings) or to a [single] geography,” he says.
Vauthrin also tells me that the Paris-based company’s business model is not based on per project sales, but is designed to encourage company-wide digital transformation. This sees Finalcad operate a subscription model based on a percentage of a company’s turnover.
“We created and implement into our customer’s organisation a ‘change management’ methodology to make sure that the majority of our customer’s workforce is going to embrace this change,” he adds.
To that end, Finalcad says it will use the new Series C funding to extend its SaaS, which spans support for buildings and infrastructure to energy, operations, and maintenance. It will also invest in R&D related to its Construction Insight Platform, and plans to hire an additional 100 people globally, adding to a current headcount of 170 people across 12 countries.
“When we raised our Series B in 2016, we intended to implement pivotal change: moving from a project-based business model to a company-wide digital transformation one. This involved covering all the main activities of our industry: buildings, infrastructure, energy, operations and maintenance,” says Jimmy Louchart, co-founder and CEO, in a statement.
“Since then, we validated this shift with some major contract wins in Europe and Asia. Now this Series C allows us to fully deploy our new strategy on a global scale. We firmly believe that this unique approach is coming to fruition, and the value we bring to our customers is the right path towards changing the way we build”.