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Melbourne-based digital procurement platform EstimateOne has attracted the backing of two high-profile investors, including Aconex co-founder Leigh Jasper, through a debut $35 million capital raising.
The funds, to be used to expand EstimateOne’s services and to push further into international markets, have seen Jasper and former CEO of MYOB Tim Reed support the company which was founded in 2008 by Andrew Ritchie and Michael Ashcroft (pictured).
Until now, EstimateOne, which caters to the commercial construction sector, has been self-funded by Ritchie and Ashcroft who have grown the business to annual revenue of more than $10 million.
EstimateOne is said to be Australia’s largest digital procurement platform for commercial construction, which connects more than 50,000 commercial builders, subcontractors and suppliers.
Jasper, whose construction management platform Aconex was bought by Oracle in 2017 for $1.6 billion, and Reed have invested in EstimateOne through their respective entities Saniel Ventures and Potentia Capital.
Saniel Ventures is a private investment group supporting high-growth technology companies, while Potentia Capital, headed by Reed and former managing director of Archer Capital Andrew Gray, is a specialist private equity investor focused on technology and tech-enabled businesses.
Ashcroft, the EstimateOne CEO, says that Potentia and Saniel Ventures are capital partners that are ‘aligned with our vision’.
“They have already demonstrated immense value above and beyond just providing capital,” he says.
“Being ‘bootstrapped’ and profitable to date has allowed us to grow our business on our own terms. As the construction industry is now at a turning point, driven by supply chain issues and labour shortages, we recognise more than ever the value our platform offers, and that the business is ready to seek investment to deliver significant scale and growth.”
Ashcroft notes that procurement problems are very expensive for the industry and that process execution and decision-making has not been well supported by technology.
“We want to change that. Construction technology is at a stage of rapid adoption and we have the insights, data, technology and a growing high-quality team ready to solve many of the problems that the industry faces.
“We are committed to delivering value through our connected network, helping customers make better decisions, and reducing costs and risks carried by builders, subcontractors and suppliers.”
The investment by Potentia Capital and Saniel Ventures includes $20 million of primary capital and a $15 million secondary investment.
The capital raising will enable EstimateOne to scale up its product expansion strategy, building on pre-construction tendering into a suite of connected procurement workflows. It will also accelerate EstimateOne’s entry into new markets across South-East Asia and North America, building on its existing footprint in the UK, Ireland and New Zealand.
Michael McNamara, partner at Potentia Capital, sees the investment as the beginning of the next phase of growth for EstimateOne.
“We have been highly impressed by EstimateOne’s founders and management team, the exceptional workplace culture and calibre of talent, the care and thought that has been given to the company’s vision and values, and its strong market position with a deeply engaged network of builders, subcontractors and suppliers across Australia,” he says.
“We believe the construction sector is on the cusp of significant tech-led innovation and look forward to supporting EstimateOne grow its leadership position in Australia and offshore.”
Reed and McNamara will join the EstimateOne board as part of the deal.
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