Saudi's BRKZ Secures $17M Series A Funding - Construction Tech

The Challenges of Construction Procurement

The process of procuring materials for construction is often characterized by fragmentation, reliance on manual processes, and a lack of transparency. This compels contractors to manage numerous suppliers simultaneously, navigate protracted negotiation periods, and frequently contend with payment delays.

These inefficiencies are particularly acute in Saudi Arabia, a nation currently undertaking massive infrastructure and real estate developments valued at trillions of dollars.

BRKZ: A Tech-Driven Solution

Recognizing these issues, BRKZ, a construction technology startup headquartered in Riyadh, has developed a managed marketplace powered by technology. This platform is designed to simplify procurement procedures and offer customized financial solutions to construction companies.

The company recently secured $9 million in new funding – comprised of $8 million in equity and $1 million in debt – increasing its total Series A funding to $17 million. Notably, existing investors demonstrated strong confidence by reinvesting in this round.

Investor Confidence

The list of investors who participated in this funding round includes Aramco’s Wa’ed, BECO Capital, Better Tomorrow Ventures, Class 5 Global, Fluent Ventures, Knollwood Investment Advisory, MISY Ventures, RZM Investment, and 9900 Capital.

This latest investment follows an $8 million Series A1 round that BRKZ announced in March of the previous year.

The Founding of BRKZ

BRKZ was established in 2023 by Ibrahim Manna, a former executive with Careem, a subsidiary of Uber. Manna’s decision to launch the company stemmed from personal experiences with the difficulties inherent in the construction supply chain.

“Following Careem’s acquisition by Uber, I purchased a home in May 2020 and directly encountered the shortcomings of the construction materials market,” Manna explained to TechCrunch. “These included a lack of clarity in material choices, uncertainty regarding the location of deliveries, and fluctuating prices.”

He further stated, “This experience highlighted the industry’s outdated practices and revealed a substantial opportunity for innovation and improvement.”

Construction Material Procurement: A Regional Overview

Manna reports engaging with more than 100 suppliers and contractors throughout the UAE, Saudi Arabia, and Pakistan to comprehensively understand the difficulties inherent in construction procurement within the region.

His findings indicate widespread market inefficiencies, with Saudi Arabia presenting the most significant potential for growth. This is largely attributed to the nation’s Vision 2030 initiative and favorable market conditions.

BRKZ Platform Capabilities

The BRKZ platform facilitates the procurement of crucial construction materials, including cement, steel, and wood, for both contractors and factories.

Users gain access to clear pricing structures, receive competitive quotations within a timeframe of 20 minutes, and can utilize buy now, pay later financing options.

Furthermore, factories are empowered to secure essential raw materials and broaden their reach to a larger customer base.

Overcoming Regional Challenges

BRKZ streamlines operations by mitigating common obstacles such as elevated transportation expenses and logistical complexities across different regions.

Over the last year, the platform has experienced substantial growth, expanding its stock-keeping units (SKUs) from 1,200 to over 7,000 and increasing its supplier network from 350 to 1,100.

Since the Series A1 funding round, BRKZ has seen a fourfold increase in revenue during 2024, serving over 850 contractors and factories involved in prominent projects.

Expansion and Growth Metrics

Notable projects utilizing the BRKZ platform include King Salman Park, Neom, and the Red Sea Project.

The company has strategically expanded its presence to over 40 cities within Saudi Arabia’s Central, Eastern, and Western provinces.

This expansion has resulted in a significant increase in request for quote (RFQ) volume, rising from $170 million last March to $350 million (SAR 1.3 billion) currently.

Manna indicated that BRKZ plans to further extend its operational reach to the northern and southern provinces of Saudi Arabia.

Expanding Revenue Streams for BRKZ

BRKZ is actively pursuing strategies to broaden its income sources. Currently, the company derives revenue from transaction fees and various financial products, notably buy now, pay later options and customized credit solutions.

According to Manna, while BRKZ presently collaborates with contractors, a key objective is to establish direct relationships with developers and suppliers. These customer segments possess distinct requirements, material needs, and pricing structures, necessitating a more extensive array of procurement possibilities.

The company intends to initiate direct imports of construction materials that are difficult to obtain domestically, beginning with China in the current year. Subsequent expansion will include sourcing from India and Turkey to address the increasing demand within the country.

“We anticipate fostering a trade pathway between China and Saudi Arabia as we begin importing materials desired by our contractors, suppliers, and other partners,” Manna stated. These imported goods will be rebranded and offered to construction professionals throughout Saudi Arabia. The company’s strategic emphasis is now centered on deepening its presence within the Saudi market.

This strategic redirection represents a departure from BRKZ’s previous plans for regional expansion across the broader MENA area.

This initiative is notably consistent with China’s ongoing efforts to reinforce its economic relationships with Middle Eastern nations, particularly in light of evolving U.S. trade policies. Considering Saudi Arabia’s robust construction sector and China’s substantial involvement in large-scale projects such as NEOM and The Line, BRKZ’s import strategy stands to gain from potential governmental trade incentives and financial agreements between the two countries.

A Comprehensive Construction Platform: BRKZ's Ecosystem Approach

BRKZ is evolving beyond simply supplying materials, with the goal of establishing itself as a complete construction ecosystem. This expansion centers around four key areas crucial to any construction project: sourcing materials (currently their primary focus), providing financial solutions (including Buy Now, Pay Later and credit options), connecting contractors with skilled labor, and facilitating equipment procurement and rental.

According to Manna, formerly the managing director of global markets at Careem, broadening their services to include workforce and equipment solutions will position BRKZ as a holistic, end-to-end platform for both contractors and developers.

Leveraging AI for Enhanced Efficiency

A significant aspect of BRKZ’s future product development will involve the integration of AI and machine learning technologies. These technologies will be utilized to automate processes such as pricing forecasts, the creation of purchase orders, and other internal operations.

This automation is intended to boost efficiency not only within BRKZ itself, but also for the contractors and suppliers who utilize the platform.

Expansion Plans and Funding

The recent capital injection will be instrumental in realizing BRKZ’s vision of becoming a central procurement hub. It will also fuel their expansion into the Saudi Arabian market.

Dany Farha, co-founder and managing partner at BECO Capital, commented on the company’s progress, stating, “The BRKZ team has successfully implemented its product and operational plans, resulting in increased efficiency within this rapidly growing industry.”

He further added, “We are pleased to continue our support as BRKZ enters its next phase, and their financing product will effectively complement their existing digitized procurement platform, addressing the cash flow needs of their customers.”

Growth and Financial Performance

Since its launch just two years ago, BRKZ has secured a total of $22.5 million in funding, encompassing $5.5 million from earlier pre-seed and seed rounds.

Manna reports that the company’s valuation has increased by 46% over the last year. This growth is supported by a fourfold increase in year-over-year revenue and positive unit economics.