Construction marketplace Construex takes in first capital to expand in Latin America
Reading Time: 2 minutesConstruex, an Ecuador-based software-as-a-service marketplace for the construction and design industries, secured $4.6 million in seed funding. Zacua Ventures and Fifth Wall co-led the round and were joined by ABSeed and Terracotta Ventures.
Roberto Arroyo started the company with his brother, Nicolás Arroyo, in 2019 after working in his family’s construction business as well as operating his own housing projects in Ecuador for over 15 years.
Some of those projects included managing the procurement of materials and hiring of services in housing and apartment complexes, which is where he got the idea for Construex.
The Arroyos started Construex in 2019 to digitize the construction industry in Latin America, a market Arroyo estimated to be valued at over $520 billion. The company is among a handful of startups addressing the supply chain in this region, for example, Tül in Colombia.
The biggest problem is lack of information, Arroyo said. Just 4% of construction suppliers are tech-enabled, so there is an opportunity to connect construction product suppliers with customers in a way that doesn’t involve calling around for supplies, he said.
Construex offers a free version of its platform and takes in revenue from transactions made on the platform, as well as additional services via a subscription model.
‘We offer a really good CRM to our suppliers,’ Arroyo said. ‘There are virtual reality showrooms and integration through WhatsApp.’
The company has more than 80,000 registered suppliers offering over 700,000 products ranging from architecture to engineering to furnishings. It also has a team of 48 people across two offices.
They bootstrapped the company for almost four years and reached profitability as it expanded into Chile, Guatemala and Argentina. It has approximately 500 customers in the subscription model, and the company doubled its revenue this year compared to 2022, Arroyo said.
As the company grew, they decided to scale more quickly and go after venture capital to further expand into Mexico and other Spanish-speaking countries, while also adding Brazil to the pipeline.
Construex recently opened an office in Mexico City. Arroyo has a goal of bringing 1 million suppliers onto Construex over the next few years and expects to multiply revenue by 4x in the next year.
Meanwhile, this is ABSeed’s first investment outside of Brazil, according to Geraldo Melzer, co-founding partner of ABSeed.
‘Roberto Arroyo’s trajectory alongside this market gives him a privileged perspective on the real needs of this industry,’ Melzer said in a statement. ‘We understand that the problems they face today are common to us. Together with Terracotta, a partner fund specialized in proptechs, we want to bring them closer to players in our market and, with multiple hands, build the bridge for them to come here in the near future.’
Reference: https://techcrunch.com/2023/11/27/construction-marketplace-construex-latin-america/
Ref: techcrunch
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