Agora Raises $33M to Revolutionize Construction Tech

Agora Secures $33 Million in Series B Funding

Agora, a company specializing in materials management solutions for contractors, has successfully closed a $33 million Series B funding round. The investment was spearheaded by Tiger Global Management.

Investment Details and Participants

Alongside Tiger Global Management, several other prominent investors contributed to the financing. These include 8VC, Tishman Speyer, Jerry Yang (Yahoo co-founder), Michael Ovitz, DST, LeFrak, and Kevin Hartz. This latest round brings the total funding raised by the startup since its 2018 launch to approximately $45 million.

The Construction Tech Landscape

Historically, the construction sector hasn't always been viewed as a leading area for innovation within the startup ecosystem. However, construction is a foundational industry, significantly impacting both the commercial and real estate sectors, and consequently, affecting everyone.

The $10 trillion construction industry has faced persistent productivity issues for decades. Data from McKinsey reveals that labor productivity growth in this sector has remained stagnant since 1947.

Agora’s Mission and Approach

Maria Rioumine and Ryan Gibson established Agora with the goal of streamlining materials ordering and tracking for commercial trade contractors. Their platform aims to automate manual data input and provide a unified communication hub for all stakeholders in the procurement process.

Ultimately, Agora seeks to accelerate project timelines and minimize construction costs, thereby contributing to more affordable and accessible urban environments. The company envisions its SaaS platform as a catalyst for a “built environment” that is both faster and more efficient.

Focus on Specific Trade Verticals

Based in San Francisco, Agora distinguishes itself through a targeted approach, concentrating on specific trade verticals sequentially. The company initially focused on the electrical trade and is now expanding into mechanical contracting.

“Over $101 billion in electrical work was completed last year, and our clients are involved in a diverse range of projects,” explained Rioumine to TechCrunch. “These projects include power stations, hospitals, schools, universities, churches, and stadiums. The work performed by these contractors is undeniably vital.”

Impressive Growth Metrics

Agora has experienced substantial growth, with annual recurring revenue increasing by 760% year-over-year. Its customer base has expanded sixfold during the same period. The company has also tripled its workforce to 45 employees and currently manages $140 million in annualized materials volume for its clientele.

Proactive Investor Interest

The Series B funding round wasn’t actively sought by Agora; rather, investors initiated discussions and submitted term sheets. Rioumine stated that multiple offers were received within twelve days of the initial conversations.

Tiger Global’s Perspective

John Curtius, a Partner at Tiger Global, highlighted Agora’s unique, trade-specific strategy as a key factor in his firm’s investment. He believes the company is actively “defining the future of procurement in construction.”

Curtius emphasized the significant financial losses resulting from inefficient procurement processes and supply chain disruptions, estimating these losses to be in the billions of dollars annually.

Platform Capabilities

The Agora platform offers contractors features such as customizable templates, pre-approved materials lists, simplified reordering of frequently used items, and access to a catalog containing over 400,000 SKUs. It also eliminates manual data entry, reducing errors and automating routine tasks.

By integrating field and office teams onto a single digital platform, Agora asserts that it reduces time spent on purchase order processing by 75% for office staff and materials management by 38% for field teams. The company estimates potential annual savings of up to $300,000 for the average customer.

Future Plans

The newly acquired capital will be allocated to expanding the team and extending Agora’s reach beyond its current presence in 30 states, as well as into additional trade verticals.

Rioumine noted the historical underinvestment in technology within the construction industry, with technology spending representing only 1.5% of revenue, compared to a median of 3.3% across other industries. She believes this presents a significant opportunity to leverage technology to improve productivity and efficiency on job sites.