Will Griffith, Evan Lintz and Murali Joshi | May 20, 2021
Procore: Laying the Groundwork to Change an Industry
“It is not the beauty of the building you should look at: it’s the construction of the foundation that will stand the test of time.” – David Allan Coe
With Procore embarking on a new chapter as a public company, ICONIQ Growth is humbled and grateful to have been a close partner to the company, investing in the business over 30 times having led numerous financings and providing liquidity to some shareholders. We could not be more grateful for the opportunity to partner with CEO Tooey Courtemanche and the entire Procore team to help transform an industry. We want to congratulate the entire Procore team on another incredible milestone on their journey to improve the lives of everyone in construction!
Construction is Complex
Since the very beginning of our partnership, we learned that construction is astonishingly complex.
As famous German architect Helmut Jahn said, “Every building is a prototype. No two are alike.” Whether a new skyscraper in Manhattan, a state-of-the-art stadium in Los Angeles or an average suburban home, construction requires disparate groups including owners, designers, engineers and contractors to collaborate in order to create something beautiful.
The list of stakeholders is endless. In addition to the architects, engineers, owners, general contractors and subcontractors, there are financial professionals not located at the job site, banks providing financing, insurance companies and many others. Everyone must break down their operating silos and work together to build a plan unlike any other before, while being productive, staying efficient, meeting timelines, complying with standards and limiting their respective liabilities.
There are also multiple phases of a construction project where different stakeholders come and go, ranging from design, pre-construction budgeting and vendor bidding, all the way to final sign-off and transition to facilities and maintenance.
The only constant in a construction project is change. With key stakeholders distributed physically and across different organizations, plans shift throughout the process. Miscommunication can increase, mistakes can happen, rework can become necessary and budgets can be challenged.
Due to the field work and back-office dichotomy, the construction industry has historically lagged in IT spend and relied on manual processes such as paper, email, faxes and cell phone (remember Nextel?). Even today, the majority of the industry still uses legacy, on-premise software or a mix of point solutions that only address a niche for a specific stakeholder versus the broader ecosystem.
Laying the Groundwork
When Tooey founded Procore in 2002, he made it his life’s work to modernize the construction world, an industry he grew up in and loves dearly. From the beginning, Procore’s mission has not wavered—to connect everyone in construction on a global platform.
Tooey’s vision was bold and unique from the beginning. From inception, yes 2002, Procore was a solution hosted in the cloud and was focused on enabling people in the same organization to collaborate without pen and paper despite being in different locations and at the same time enabling stakeholders from different organizations to collaborate and exchange information around common projects.
The road was not easy, but Tooey and his team were unwavering. There were no smart phones and certainly no tablets on job sites. Most construction sites did not have internet connectivity. Construction ERP systems were not cloud based and did not offer APIs for easy integration. And importantly, while there was acknowledgement around the challenges, industry stakeholders were not keen to change behaviors.
The road was long and further challenged by the Financial Crisis of 2008 when the financial markets and the construction industry saw a once in a century bottom.
Tooey and his then President Steve Zahm’s resolve to survive and carry forward was extraordinary. Tooey’s vision was a north star he would not abandon and by listening to the needs of each stakeholder and innovating with the tools available at the time to solve problems and make people’s lives better, Procore steadily was laying the foundation that would later change this industry.
Starting Our Journey with Procore
In October 2013, we flew into Santa Barbara to meet Tooey, Steve and the Procore team for the first time. Nestled in the American Riviera with idyllic views of mountains meeting the sea, we eventually made our way to a nondescript office building in Montecito. There we found handmade wooden desks (a rite of passage in the early days for new Procore employees) and a dedicated team of 75 or so people that had been working to understand the exact needs of the construction industry for the last ten years.
Tooey’s vision was captivating and equally matched by the humility and openness around the challenges ahead. We were also struck by a company culture designed to scale and change an industry—a collaborative work environment with a core foundation of three values: openness, optimism and ownership. This ethos drove employees to join the company and these core values were embodied by everyone we met.
As an investor in the company for the last six years, ICONIQ Growth has had the honor to support the company’s tremendous growth to over 2,000 employees and 12 offices around the world by March 2021. Over this time, Procore has remained focused on driving a people-first culture and above all, listening to the needs of their customers and partners and innovating to improve the lives of everyone in the construction industry.
Building the Construction Operating System
What happens when you have thousands of people aligned with an unparalleled culture, visionary leadership and powerful community? Or when you have an entire company working together—listening and building for the specific needs of nothing other than that industry? You get an operating system for construction—an end-to-end, cloud-first software platform for construction; a modern, intuitive and open architecture for construction; a software platform built from the ground up for construction.
What you get is Procore.
We believe everything at Procore is built with purpose. Over the years, Procore has listened to its customers and continued to evolve its platform, growing its product categories to include Preconstruction, Project Management, Resource Management and Financial Management.
The Road Ahead
We at ICONIQ Growth are humbled and grateful to be partners with Tooey and the entire Procore team as they continue to execute on their bold vision as a public company. In many ways, Procore sets the bar for a core aspect of our investment philosophy: to partner with companies that are relentlessly focused on solving complex and important problems and building cultures that endure.
We are deeply grateful for our long-term partnership with Tooey, Steve and the entire Procore team— true visionaries that remain as passionate about changing the industry as the day we first met them.
Congratulations to Procore on its initial public offering, a major milestone and recognition of what they have built, but most importantly congratulations for laying the groundwork to change construction for the better. We could not be more excited for the journey ahead!