Agora, a construction technology company, raised $33 million in a Series B round. While construction technology is not exactly considered the most glamorous industry, the market opportunity is huge because the $10 trillion construction industry is full of technological inefficiencies that slow productivity.
Agora’s goal is to make it easier for contractors to track and manage materials. The company was co-founded by Maria Rioumine, CEO, and Ryan Gibson. They built out the business by focusing on specific trade verticals, initially with electrical and now with mechanical. Rather than a one-size-fits-all solution, Agora’s niche approach has made it a popular platform for construction among contractors.
“Agora is solving a huge and critical problem. Billions of dollars a year are wasted because of inefficient procurement processes and breakages in the supply chain,” states John Curtius, a partner at Tiger Global Management.
The construction company’s Series B round was led by Tiger Global Management, an investment firm that has been a particularly active investor in Internet, software, consumer, and financial technology startups. Tiger Global has approximately $79 billion in assets under management (AUM). According to CB Insights, Tiger Global holds stakes in more billion-dollar private startups than any other firm. It’s garnered a reputation for its fast-paced investment style, often moving quicker and offering higher valuations to startups than traditional venture capital investors.
Other participants in the Series B round included 8VC, Tishman Speyer, Yahoo co-founder Jerry Yang, and Michael Ovitz. Agora has raised about $45 million in total funds to date.
Agora Did Not Seek Round; Investors Came to Agora
Co-founder and CEO Maria Rioumine notes that Agora was not actually actively trying to raise a Series B round. Instead, investors approached her company with term sheets, setting into motion another financing round. “A few investors that knew us well approached us about preempting the round,” Rioumine stated. “Twelve days after the first conversation, we had multiple term sheets.”
Investors have spotted the huge market potential to streamline the materials supply chain for commercial construction companies and Agora’s potential to shape that progress. Agora plans to use the newly raised funds to increase the number of employees, expand into new verticals, and grow its presence in new markets.
Agora’s Construction Platform
Founded in 2018 and based in San Francisco, Agora’s customer base has grown quickly. The company’s platform enables commercial trade contractors to effectively order and track materials. In addition, the platform offers features that automate manual data entry. The platform has helped customers in a diverse range of essential projects such as hospital, power station, and university campus construction.
Maria Rioumine was featured on the Forbes 30 Under 30 list last year. At the time, Agora had just raised a $7 million Series A round. Rioumine studied Politics, Philosophy, and Economics at Oxford University. She met her co-founder Ryan Gibson while working at 8VC, a prominent venture capital firm, in San Francisco. They considered why the innovative city was suffering from an extensive affordable housing crisis. They also discussed and researched why construction projects moved so slowly. These conversations eventually led to the concepts behind Agora.
Agora has experienced 760% year-over-year growth in annual recurring revenue. Agora’s mission is broader than just helping contractors manage projects more efficiently and reduce building costs. Agora also hopes that by making the building process more efficient, its SaaS platform will make cities “more affordable and accessible to all.”
Agora Can Save Customers Big Money
The company claims that the efficiency gains from its construction technology can save customers an average of $300,000 annually. This is partly due to the platform’s design. The materials management platform facilitates communication between field and office teams by bringing them together in the same digital space. Agora claims this design saves office teams 75% of the time they traditionally devote to purchase order processing, and field teams 38% of the time they allocate to materials management.
Agora’s SaaS platform enables customers to order from a materials catalogue of over 400,000 SKUs. It saves order data from frequently placed orders to facilitate easy reordering. Trade contractors can also create pre-approved materials lists on the platform.
For a long time, there has been underinvestment in construction technology. The technology spend as proportion of revenue is 1.5% on average. Compared to other industries, this number is quite low: across other industries median technology spend as proportion of revenue is 3.3%.
“When we think about just how large this industry is and how little productivity improvements there have been recently, I think now we have this amazing opportunity to really invest in technology and bring it on to the job sites and into trade contractors’ hands,” states Rioumine.