Founders: Roy Danon, Aviv Leibovici and Yakir Sudry
Investors: Viola Growth, TLV Partners, Avigdor Willenz, Tidhar, Eyal Ofer's OG Tech, and Lightspeed Venture Partners.
Year founded: 2018
Employees: 200, 170 of them in Tel Aviv
Capital raised: $106 million at $314 million valuation, per PitchBook
After Roy Danon, Aviv Leibovici and Yakir Sudry completed their military service in the IDF's elite Talpiot technology program, they knew they wanted to continue working together in civilian life as well - they just didn't know in what or where. The three made a thorough, methodical search for an area where they could offer a solution to a painful problem. They looked at traditional industries such as agriculture and medicine, scanned scientific studies, and met dozens of experts in various fields through the extensive Talpiot graduate network. That network of personal friends brought them - via some random contacts - to the construction sector.
Danon and his partners were happy to have found virgin territory: the industry is in dire need of innovation, and Israeli real estate company executives were delighted with the rare opportunity to meet future high-tech entrepreneurs and take them to construction sites. " We started from nothing," Danon recalls. "We met workers, construction managers, engineers and CEOs. We flew abroad at our own expense to meet their European counterparts. We slept on mattresses on hotel floors to save money."
Luck also played into the company's hands: its first funding round closed two months before Covid-19 broke out in Israel, and its most recent round, at the beginning of 2022, closed when the current economic crisis was just starting.
The problem that cropped up repeatedly at every construction site they visited led the trio to the sad conclusion that the process of constructing a modern building is broken: dozens of contractors are managed separately, each with its own schedule and its own pace of working, and the whole machine works with creaks and delays, sometimes leading to actual confrontation. The system they developed produces a real-time comparison between the actual phases of construction and the original plan, so that problems can be solved as they arise and not retroactively. "The construction process is 90% under control, but the remaining 10% is chaotic, and that’s the part that has project managers tearing their hair out."
Buildots isn’t just a simple comparison between plan and execution: the system equips both workers and supervisors at building sites with head-mounted Go-Pro cameras to scan construction continuously. At every given moment, a 3D computer model of the construction site is being generated, able to reveal whether a switch has been installed in the wrong place or whether plastering is not proceeding on schedule. Part of Buildots' intellectual property concerns the system for high-speed processing that enables a picture to be developed into a 3D model.
As will happen in a low-tech target market, getting builders and project managers to adopt the product is not easy, and requires education of the market. On the other hand, the company claims, the added value is tangible and immediate. "Until now, problems arose in the dark," says Danon. "When there’s a system in place to monitor construction, no one tries to hide anything - and this completely changes the process of planning and executing the project."
In order to be able to communicate with target customers on their own terms, the company hired former construction project managers, who speak the language far better than someone who has spent years in customer management departments in high tech.
Against the background of the current economic crisis, 2022 has been Buildots' breakthrough year: annual revenue has quadrupled, compared with 2021, to about $8-9 million, according to estimates on which the company refused to comment. Buildots is expected to end next year with revenue in the double-digit millions.
Buildots started out with one project at each of its major construction company clients: Israel's BST and Tidhar - the latter was an early adopted, and invested capital in the company in exchange for shares - and companies such as US-based Build Group, UK-based Wates Group, NCC of Sweden, and Ireland’s John Paul Construction. Over time, these and other companies have enabled Buildots to partner in more projects, starting from the initial phase of construction.
The $10 trillion construction market is wide open for Buildots. Its main competitors are US-based Avvir, recently acquired by Hexagon for an undiclosed amount, and OpenSpace, its largest and most significant competitor, which offers photography and imaging products that are cheaper but lower quality.
"Buildots has the potential to change the construction industry, a huge industry still crying out for a technological revolution," says Ziv Kop , managing partner at venture capital fund OG Tech. "Buildots' technology changes the way construction companies plan and execute a project, and solves the problem of transparency, control and management in projects. This can translate into a significant savings of about 25% in costs and time. The real estate industry is not easy to penetrate, but the company has the potential to do for construction what Mobileye did for the automobile industry. Buildots already has dozens of customers and some are integrating the Buildots system in every new project."
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Published by Globes, Israel business news - en.globes.co.il - on December 14, 2022.
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