CostCertified Raises $8.45M to Revolutionize Construction Procurement

CostCertified Secures $8.45 Million Seed Funding to Revolutionize Construction Estimates

CostCertified, a Canadian startup focused on delivering real-time, interactive residential construction estimates, has successfully completed a seed funding round, raising $8.45 million.

Investment Details

The funding round was spearheaded by FUSE, a venture firm based in the Pacific Northwest. FUSE’s venture partner roster includes prominent figures such as former Microsoft CFO John Connors and Seattle Seahawks linebacker Bobby Wagner.

The company also received backing from Y Combinator, having been part of the accelerator’s S21 batch. Additional investors include I2BF Global Ventures, Soma Capital, and several founders from the proptech and construction tech sectors.

A New Approach to Construction Pricing

This investment represents CostCertified’s inaugural external funding round. The company envisions itself as the “Amazon for construction,” offering a price configurator tool that fundamentally changes how construction projects are priced and managed.

CostCertified empowers contractors to provide homeowners with a shoppable, interactive estimate. This allows homeowners to select their desired options and instantly view the corresponding price adjustments. This functionality addresses a significant pain point in home remodeling, where numerous vendor and product decisions can be overwhelming.

Origins and Development

CEO Mike Bignold and David Vass founded CostCertified in 2017, drawing on Bignold’s experience running a construction business. He recognized the need for a more contemporary approach to generating estimates.

Bignold recounted a situation where a project was delayed due to a project manager’s unfamiliarity with technology. This experience highlighted the gap in the market for user-friendly construction tools.

Initially, Bignold developed a basic prototype – a quoting engine – that allowed contractors to deliver an “interactive, shoppable experience” to consumers while simultaneously managing project details.

The Vision: An Amazon-Like Experience for Construction

Bignold observed a lack of suitable tools for handling the price complexity of large construction projects. He questioned why construction services couldn’t be bought and sold with the same ease and convenience as products on platforms like Amazon or Shopify.

After selling his construction business in 2017, Bignold partnered with Vass, who had previously assisted in boosting the contracting business’s online visibility. Together, they sought early adopters to test and refine their application.

“I didn’t fully grasp the intricate challenges involved in developing solutions for large construction firms,” Bignold admitted.

Growth and Platform Capabilities

Following several years of research and development, and continuous iteration based on customer feedback, the SaaS platform officially launched in early 2021.

Currently, CostCertified boasts an annualized Gross Merchandise Volume (GMV) of $72 million and reports a year-over-year growth rate of 2,203%.

The platform enables users to customize their selections, upgrade or downgrade materials, and construct their renovation or new construction project while observing real-time price changes.

Streamlining Workflow and Reducing Risk

The software incorporates built-in financing and payment options, automating workflows and minimizing costs and risks for all parties involved – from general contractors and subcontractors to homeowners.

CostCertified integrates retailers directly into the point of sale, providing customers with clear information about their selections and associated costs. This also allows contractors to increase profits from upgrades and transparently justify pricing.

Future Plans

With a current team of 25, CostCertified intends to utilize the new funding to expand its workforce by over 100 employees in the coming year. Investment will also be directed towards product development, sales, and overall growth initiatives.

Investor Perspective

Brendan Wales of FUSE expressed his firm’s admiration for the CostCertified team’s extensive experience within the home renovation market. He emphasized that they have firsthand knowledge of the challenges faced by contractors and have built a product to address those needs.

Wales noted the product’s robustness and comprehensive features, exceeding expectations for a company at its stage. He also highlighted the strong customer satisfaction and the compounding monthly growth in logo acquisitions.

Focus on the End Consumer

A distinguishing feature of CostCertified, according to Wales, is its focus on the contractor’s customer. Unlike many renovation software vendors who prioritize contractor needs, CostCertified prioritizes a transparent and dynamic experience for the end consumer, mirroring the convenience of e-commerce platforms.