Major construction projects are a ripe area for Industry Cloud platforms. All of the key elements are there: lots of dollars at stake, many players on any one project (architects, engineers, owners, GCs, subcontractors, materials providers), voluminous documents, certifications, licenses, permits, complex services, etc.. It’s a tempting target for folks trying to build an industry software platform and has been so for more than a decade.
This is an industry that has adopted technology like CAD and Building Information Management (BIM) on an internal basis for small teams or even large enterprises, but has lagged in use of inter-enterprise tools. The combination of an industry that has lots of different types of players, and a severe economic as the cloud craze reached full steam, probably delayed adoption of industry platforms. The area took a while to heat up, but it now seems to be reaching full boil.
Some of the players include:
- Skire, which was sold to Oracle last year and combined with Oracle’s Primavera project management product line (which itself had been acquired)
- EcoSys, started by ex-Primavera folks which focuses on oil and gas projects
- Expesite, which was sold to Accruent last year and focuses on multi-site construction companies (e.g., retailers)
- Aconex, which started in Australia is now expanding in the US
- Textura, which has grown partly through acquisition and focuses on the invoicing and payment end of the construction process
- Basepin, a cool little start-up gaining some significant traction
Textura (TXTR) recently went public. It expects revenue of $35 million this fiscal year and will report a loss on an EBITDA basis. It expects revenue next year of $55-$58 million. In today’s SaaS-crazy world such impressive growth comes at a steep price . A couple of weeks ago TXTR had a market cap of almost $1 billion–or close to 30x this year’s revenue! The market cap has since fallen to “only” $800 million–still 25x this year’s revenue and about 15x next year’s. This market cap comes in a highly cyclical, “lumpy”, project-oriented business which may be less conducive to recurring revenues than some other markets .
Count me in as a fan of the industry, but not of the stock.