By Meghan Hall
Procore, a construction management software, got its start in the early 2000s–far before the wider commercial real estate industry began to accept tech. Over the years, the firm has continued to grow and evolve, remaining competitive amidst a major tech revolution.
The Registry spoke with Tiffany LaBruno, product director of owners at Procore, about how the construction industry has evolved over the years and what it means for the industry in the future.
Please tell The Registry a little bit about Procore? How did the company get its start, and what specific pain point in construction did the firm initially seek to solve?
Procore is about connecting everyone in construction on a global platform. That has been our mission since Procore was founded in 2002. According to our CEO Tooey Courtemanche, it all started with an idea to transform the construction industry, which he grew up around; to build tools that were not only easy to use and efficient, but were worthy of the industry that builds the world around us. When Tooey started Procore, the dream was to empower the industry that builds the communities where we live, work, and play.
Procore recently released its fourth quarter financials, which indicated that revenue increased 33 percent year-over-year. What strategies have made Procore successful in its growth/acquisition of new clients?
2021 was a very strong year for our Financial Management offerings. The product category not only grew the fastest over the course of the year, but became our second biggest, only behind Project Management. This means, stakeholders involved in the construction industry are managing highly complex, high-risk businesses with low margins and challenging cash flow dynamics. We’ve started to lay the groundwork for a longer-term strategy that helps our customers manage risk and accelerate growth to run their businesses better.
Our larger customers are growing with us. Most of these customers initially purchased Procore for smaller contract sizes and grew to surpass $1 million in Procore revenue in just a few years. This progression underscores how we are really just beginning to digitize this industry.
We are seeing broader platform traction. As we mentioned on our earnings call, platform usage, integrations, and adoption of multiple products are all increasing.
At the end of March, Procore released its 2022 Customer Return on Investment report. Can you talk about some of the significant findings of this report, and what it means for Procore as a business?
[There are several] key takeaways from the report:
Risk Modeling: Leverage AI insights across the Procore platform and get actionable project data and benchmarks that compare your financial performance on a project against similar projects across the industry to help you identify where you’re strong, areas for opportunity, and potential risks.
Improved Efficiency: Customer respondents reported saving an average of 15 days on the overall schedule on a typical project.
Reduced Rework: 75 percent of customer respondents agree Procore has helped reduce the amount of rework taking place on their projects which leads to less carbon waste, more efficiency, and delivering more projects on-time and on-budget.
Building Scalable Businesses: Customer respondents believe using Procore enables their project teams to manage on average 48 percent more construction volume per person.
Safer Job Sites: 79 percent of customer respondents that use Quality and Safety agree Procore has improved their company’s safety program.
This year, the construction industry will continue to face a number of challenges: rising material costs, supply chain issues, labor shortages and more. How do you see construction technologies such as Procore evolving to meet the needs of clients amidst these challenges?
Supply chain visibility: globally technologies like Procore will help ensure the smooth and efficient delivery of critical materials needed for construction.
Labor shortage: Many companies will continue to grow their backlog of projects, which will require them to solve the challenge of getting the right trade to the right jobsite at the right time – pushing them to be more efficient and effective with labor than ever before. Procore increases productivity, therefore supporting efficiency during the ever-present labor shortage. Additionally, with our LaborChart acquisition, specialty contractors and self-performing GCs have been able to leverage our platform in new ways and gain a real-time and forward-looking understanding of all workers, assignments and commitments, enabling them to accurately plan and forecast.
Rising material costs: The Procore Construction Network is a connected ecosystem that will enable better lending and insuring practices that will help drive down construction costs.
Looking ahead, what excites you most about the intersection of construction and technology? Why? Are there any problems that you do not think can be eased by technology? Why or why not?
The first iPad was released in 2010, but WiFi didn’t even make it to job sites until 2012. Since then, the construction industry has been flooded with construction tech. Many of these solutions do a great job solving a piece of the puzzle, but they lose sight of the big picture. How smoothly a project runs really comes down to how well the folks on the job are able to communicate: it’s easy to see how much is lost if people are downloading one app for their punch list, another for scheduling, and another for their resource management. When those apps exist in silos, it doesn’t matter how well the individual solutions work because they can’t connect. That’s the reality of the technological environment that construction has been building in. And that’s why our focus has always been to build a platform that connects all people, systems, and data, removing the communication and data silos that have been holding the industry back. Construction has effectively worked miracles to build what they have, given the tools they’ve had at their disposal.
Looking ahead,we’re excited about the impact data will have on the future of construction. There are a number of ways data will benefit the construction industry industry as a whole:
Construction benchmarks: We have over 1.6M construction professionals across the globe generating data on the Procore platform. Translating that data into actionable insights and industry benchmarks will provide unbelievable value to our customers and enable them to go into our system to compare their project performance to similar projects across the globe. This means our customers have the ability to learn from the construction industry throughout an entire region of the world. This type of data can provide construction professionals with information about where they can narrow their risk profile in the areas of safety, finances, and scheduling.
Supply chain visibility globally will help ensure the smooth and efficient delivery of critical materials needed for construction
We envision a future where you’ll be able to connect with the most comprehensive network of businesses, and share quantitative and qualitative data to drive better business outcomes.
Is there anything you would like to add? Anything we should be asking?
We are also very excited about the future of technology and leveraging our partnerships with solutions in the environmental and sustainability space. We are also empowering Owner stakeholders in leveraging the power of BIM within Procore for visualization as well as a baseline for the use of digital twins. Procore seeks to be a thought leader and primary supporter of our customers path to digital transformation by utilizing fewer point solutions and gaining insights over the data collected across the platform during the course of the asset lifecycle.