Posted In:

Lending


Financial Software for the Construction Industry Raises $106.3m

Published:

Jun 06, 2022


Author:

Sarah Parsons Wolter

Posted In:

Lending

Published:

Jun 06, 2022


Author:

Sarah Parsons Wolter


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We are thrilled to announce FinTech Collective’s lead role in the $6.3m Seed investment in Constrafor, a New-York based company working tirelessly to build the financial OS for the construction industry. The investment was made alongside Village Global, Clocktower Technology Ventures, Commerce Ventures, and other tech founders.

As the only end-to-end construction procurement platform uniting both general contractors and subcontractors, Constrafor’s Early Pay Program provides a unique and collaborative solution for subcontractors to get paid early. Alongside the $100m debt facility secured with CoVenture, Constrafor is well positioned to tap into an enormous market opportunity.

Beginning with a “Money Button” for subcontractor invoices servicing more than 1,000 contractors across more than 100 projects, Constrafor has developed several adjacent solutions that are set to follow.

FTC Summary


Credit-worthy subcontractor invoices amount to more than $400b in the US alone. Following a lengthy procurement process, workers typically do not get paid for at least 45 days after completing their first segment of work and submitting an invoice. Despite being subject to the highest cost of capital in the industry Subs have no other option but to finance their own projects. However, Constrafor is beginning to change these dynamics.

Co-founders Anwar Ghauche and Doug Reed are leading the charge. Both of Anwar’s parents come from the construction industry, which made him intimately aware of these challenges early-on in life. Combined with Doug’s technical expertise as CTO and co-founder of TrueFacet, the team has attracted top talent to make Constrafor an unstoppable force within the industry.

By smoothing cash flows and providing financing up front, Subs for the first time are able to take on longer duration projects, meet payroll without sacrificing new business opportunities, and avoid other interruptions in workflow - increasing subcontractor efficiency and unlocking even more value in an already expansive market of $1.3t in US construction volume.

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