1Build Raises $14M to Tackle Construction Inflation

Navigating Cost Estimation Challenges in Construction

The current economic climate presents significant difficulties for accurate cost estimation within the construction sector. Following a surge in demand post-pandemic, lumber prices experienced a dramatic increase, subsequently declining sharply in recent weeks. Fluctuations in the costs of essential materials like copper, concrete, and steel, coupled with disruptions to supply chains, labor shortages, and border restrictions, are contributing to overall price instability.

The Need for Modernized Tools

Despite being one of the world’s largest industries, responsible for planning and executing projects totaling trillions of dollars, construction remains surprisingly reliant on traditional, paper-based processes. While information technology has been integrated into some areas, it hasn’t fully addressed the need for real-time data and volatility management in materials and labor costs.

Consequently, construction firms require advanced software solutions to effectively manage cost estimates in today’s dynamic environment.

1build’s Vision for Pre-Construction Management

A Comprehensive Platform

1build aims to become a leading provider of solutions encompassing all aspects of pre-construction, from initial planning and cost estimation to the commencement of building. CEO and founder Dmitry Alexin stated the company’s goal is to “occupy the whitespace niche of pre-construction — your planning, your estimating, up until you break ground on your building.”

Origins and Discovery

Prior to founding 1build in 2018 and 2019, Alexin worked in finance and briefly at a startup focused on real estate data science. He identified a critical gap in the market: the difficulty in accurately modeling property development costs. He initially assumed readily available APIs could provide cost estimations.

This assumption led him to a deeper understanding of the complexities within the construction industry. He observed that it was a largely “analog industry … three times as large as e-commerce and still in this offline, non-digitized way to consume.”

Focus on Data Standardization

Alexin recognized the need to automate processes but encountered challenges related to establishing a standardized data format for the construction sector. His efforts eventually centered on streamlining the cost estimating process.

Initially a solo founder, Alexin has since assembled a management team. He and early team members participated in the YC Winter 2020 batch, where 1build was recognized as a promising startup.

Overcoming Initial Hurdles and Achieving Growth

Adapting to the Pandemic

The timing of 1build’s launch coincided with the onset of the COVID-19 pandemic, resulting in a “50% reduction in usage in the first 30 days.” However, the company adapted and benefited from an unexpected surge in construction activity driven by shifts in housing and work patterns.

Securing Funding and Expanding Capabilities

1build secured a $5.5 million seed round from Initialized Capital, enabling the development of a unified platform – “1build” – designed to manage all aspects of cost estimation and construction planning. The platform provides a spreadsheet-like experience while incorporating the latest materials and labor rates.

Users can “develop your estimate yourself, line item by line item.” Alexin emphasizes that consolidating construction planning into a single platform can significantly reduce time and costs, particularly for smaller contractors lacking extensive planning resources.

Rapid Revenue Growth and Series A Funding

Subscription revenues have increased by 7x in the last 10 months, and 10x since April. This growth led to a $14.5 million Series A funding round led by Greycroft, with Brent Baltimore noting the firm’s long-standing involvement in construction technology.

Future Outlook and Industry Standardization

A Globally Distributed Team

The 1build team is geographically diverse, with members located in the U.S., Canada, and Europe.

The Path to Industry-Wide Adoption

1build envisions becoming the central hub for the construction industry, advocating for the adoption of a standardized data format. Alexin believes that increased industry adoption will facilitate further product development and innovation. “The more and more builders that adapt that, the more we can build into the product,” he said.