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led the financing, which also included participation from existing investor , , and . With the funding, which combines a previously undisclosed $8.5 million Series B and $25 million Series C, San Francisco-based Fieldwire has now since its inception in 2013. As part of the financing, Menlo Ventures Partner is joining Fieldwire鈥檚 board.

We鈥檝e written extensively about how the sector has seen increased investor interest in recent years. It鈥檚 an industry that has been historically run with a more old-fashioned mindset when it comes to technology. But as new leaders emerge and its workforce becomes more mobile while demand has surged with a healthy economy, the industry has slowly become more open to new technologies. This has given startups such as Fieldwire the perfect opportunity to come in and help improve efficiencies and productivity in an industry rife with challenges in both areas.

Fieldwire鈥檚 aim is to allow everyone involved in a construction project鈥攆rom the back office to the numerous subcontractors onsite鈥攖o access and share information in real time. By offering a mobile-first solution, the company鈥檚 goal is to 鈥渕ake it easy for construction crews to track, record, and share project updates, ensuring proactive responses to all things related to quality, safety, and scheduling.鈥� Users are typically project managers, engineers, and craft workers with a focus on labor coordination in an effort to help fuel productivity.

What鈥檚 interesting to me in covering this funding is just how bullish Fieldwire鈥檚 investors are about the company鈥檚 prospects. Both Menlo鈥檚 Sosin and Brick & Mortar Ventures founding partner and managing director raved at length about the company and its potential. One characteristic about Fieldwire that was particularly appealing to both is the company鈥檚 ability to be cash flow positive in an era when deeply unprofitable companies are going public and raking in huge funding amounts.

Indeed, being cash flow positive is impressive. Over the years, Fieldwire has quietly already been used by more than 2,000 companies across over half a million projects globally. It鈥檚 managed to win company-wide agreements with huge construction companies including Australia鈥檚 , out of Canada, and U.S.-based .

By focusing on the craft workers and subcontractors, Fieldwire is winning over those in the field who are then taking their observations to company鈥檚 decision-makers, according to Bechtel.

Background

In a phone conversation Fieldwire CEOsaid that when he studied construction at , he observed that most technology was aimed at architecture and design firms. With parents who had remodeled houses as a hobby, Frinault had seen firsthand how behind the construction industry was when it came to utilizing technology to make projects go faster and more smoothly.

鈥淵ou鈥檇 go from looking at a 3D model to going to a site where it was back to the Stone Age with paper and pencil,鈥� he said. 鈥淓verybody was trying to plan the perfect project. But if you鈥檝e spent any time on a [construction] site, you know it鈥檚 always different than what you plan. I recognized we needed better tools to organize teams and adapt to findings.鈥�

This was around 2006-2007 and Frinault realized his ideas were a bit nascent for this technology-resistant industry.

鈥淭he cloud was not something construction companies were comfortable with at that time,鈥� he said.

So Frinault left his idea on the backburner until about 2013 when he and co-founder both quit their jobs to make the concept behind Fieldwire a reality.

鈥淚 remember saying 鈥楲et鈥檚 give each other six months to see where we can get and if not far, we can look for another job,鈥欌�� he recalled.

To their surprise, it wasn鈥檛 small companies that were initially interested in using the Fieldwire platform. 鈥淩eally big companies鈥� started showing interest.

鈥淲e were only five people at the time,鈥� Frinault said. 鈥淚t was a little scary. But we kept building, and selling the product.鈥�

The startup raised in 2015 and continued to grow. It found that word of mouth was drawing more attention to its offering.

鈥淢ost companies in our space tend to distribute from the top down with sales people trying to convince people to use it,鈥� he told me. 鈥淏ut we distributed a built product with foremen on site who downloaded our app and started sharing it with more and more people so that ultimately, the headquarters of a company would have everyone in that company using it.鈥�

As the company started getting 鈥渟ome large deals,鈥� it recognized the need for more capital, hence an $8.5 million undisclosed series B 鈥渋nsider round鈥� and more recently, a $25 million Series C.

Fieldwire has been cash flow positive since December of 2018 and growing rapidly. Unlike other SaaS companies, Fieldwire said it is at an advantage because most construction companies pay for a year upfront as opposed to a month-to-month basis. As such, the company has seen its annual recurring revenue (ARR) increase two to three times every year, according to Frinault. Currently, Fieldwire has 65 employees, up from 35 at the beginning of this year, with plans to reach 150 by next summer.

鈥淲ith this raise, we鈥檙e going to start hiring very, very aggressively so we might see that change,鈥� Frinault said. 鈥淏ut every dollar we鈥檙e raising is not to finance heavy burn. We didn鈥檛 need to raise it and could have raised twice as much if we wanted. But the capital will allow us to build a better company.鈥�

Looking ahead, Fieldwire plans to use the new funds to fuel research and development as well as to further global expansion. Besides its San Francisco headquarters, the company has offices in Phoenix, Arizona, and Paris, France. The company plans to open an additional office in Australia by year鈥檚 end.

鈥淲e already have very large customers in Australia,鈥� Frinault said. 鈥淥ur model allows us to not need to be physically present in every market until we have very large customers there. At that point, it鈥檚 good practice to be able to visit them once in a while.鈥�

Investors Weigh In

For Menlo鈥檚 Sosin, the investment is in line with his firm鈥檚 ongoing thesis of looking for 鈥渞eally attractive vertical SaaS opportunities.鈥�

鈥淲e were very familiar with the size of the construction space, and knew it was a Luddite category in terms of adopting technology,鈥� he said. 鈥淎t the same time, as the guard in construction seemed to be changing with the older people who were resistant to technology retiring to younger people with smartphones in their hands, there were suddenly higher expectations of doing things in a more digitally native way.鈥�

Menlo recognized that construction was going to be one of the last big industries to use mobile and cloud-native software so the firm spent time in the sector looking for opportunities.

One of the things that gets Sosin excited about Fieldwire is that it has managed to 鈥渂uild out a huge amount of functionality鈥� around task management.

This gives field workers a 鈥渄igital Bible鈥� of sorts to be able to see what鈥檚 been done and what鈥檚 been done correctly, he said.

Menlo is also impressed with the startup鈥檚 distribution model, which has helped with its capital efficiency.

鈥淚t鈥檚 easy enough for people to download and use and because it鈥檚 designed so well it鈥檚 spread virally,鈥� he said. 鈥淥ne person on a project uses it and then suddenly the entire project adopts it and then the GC began using it in a couple of projects and then they鈥檒l get an enterprise license to use on all their projects. It鈥檚 a very powerful model that not a lot of companies have been able to achieve.鈥�

Brick & Mortar Ventures鈥� Bechtel, who first invested in the company in 2016, agrees.

Fieldwire, he said, went from an era of only construction-minded VCs really seeing its value to getting 鈥渢erm sheets from great tier 1 VCs.鈥�

鈥淚t鈥檚 exciting to see that play out as we鈥檇 hoped,鈥� Bechtel said.

Photos courtesy of Fieldwire; Blog Roll Illustration:

Note: This article was updated to reflect that this was not Menlo Ventures’ first investment in construction tech, and to break down the stages of the investment.