InternationalOpenSpace announced that it has raised a $50 million Series C funding round.- A former commerce secretary invested as part of the round, led by hedge fund
Alkeon Capital Management. - The
construction tech company said it saw a 150% growth in customers last year.
OpenSpace CEO Jeevan Kalanithi wasn't planning to raise any more money after a fundraising effort last year netted the company $15.9 million.
The Series B round in July 2020 helped the company hone and expand the use of its software, which uses video to help contractors, architects, and developers track the progress of under-construction buildings remotely.
But then pandemic brought in even more customers who wanted to monitor construction sites from afar via photos, videos, and artificial intelligence.
So when Alkeon Capital Management, a New York hedge fund and tech investor that CNBC described as an "under-the-radar" fund "trouncing" the market, came knocking, Kalanithi saw opportunity to speed up the company's growth.
OpenSpace announced on Wednesday that it had raised a $55 million Series C funding round, led by Alkeon. New investors included PSP Partners, the firm run by Obama-era Secretary of Commerce and billionaire real-estate heiress Penny
Kalanithi, who is also OpenSpace's cofounder, plans to use the latest capital to both attract customers worldwide and offer more features to existing customers.
Returning investors Lux Capital, Silicon Valley heavyweights Menlo Ventures, JLL Spark, the venture arm of commercial real estate firm JLL, and
The San Francisco-based company declined to provide a valuation, but the startup has now raised a total of $88.3 million in funding since it launched in 2016. The company says that its customer base increased 150% in 2020, while usage was up 300%, suggesting that existing customers were also capturing more snapshots of job sites.
OpenSpace uses computer vision - a type of machine learning that trains computers to analyze visual data - to make digital, detailed models of construction sites that are updated daily, or even more often. These models can be rendered by OpenSpace's own cameras, third-party cameras, or soon, new iPhones with LiDAR-technology.
The company then builds software tools on top of this underlying data. Most recently, it created what it calls ClearSight Progress Tracking, which calculates overall progress on a construction site by comparing its physical shape to the digital blueprints of the job. Another feature is object search, which allows someone to search for different items on a job site, such as a palette of wood.
Taking the old-school construction industry digital
OpenSpace's growth came as the pandemic turned construction-tech adoption from a possibility to a necessity, especially for its particular offering, which allows stakeholders intimate looks into job sites from anywhere in the world.
Its impact has already rippled industry-wide: It was one of the most-nominated firms that appeared on Insider's list of the hottest proptech companies. The buzz meant that OpenSpace didn't need to actively fundraise, or even make a pitch deck. Instead, investors came to OpenSpace with their own presentations, explaining how they could help the company expand even further.
"What stood out to us about OpenSpace is its rapid adoption across industry leaders, including our own
construction teams," Pritzker, of PSP Partners, wrote in a press release. "This level of validation is rare for a young company and a promising indicator of its future potential."
Investors not only saw OpenSpace gaining customers during an unprecedented era of remote work but also predicted that the range of options it offers clients will eventually become the norm in the field.
"We know that this will be the expectation," Kalanithi said. "If you're a project manager at a real-estate development firm or a superintendent, sooner or later you'll expect that you can open up your phone or look at your computer and see at your project."
The company already has customers across the globe, but is hoping to use its biggest cash infusion yet to expand its global operations, with a specific focus on the Asia-Pacific region.
Kalanithi said one of the OpenSpace's two goals is to "be everywhere." The other is to continue to build more software tools that build off of its data set.
The company has already, he added, essentially become a time machine for construction sites that can allow future facilities managers to see exactly how buildings were put together in the past. This same data, though, could also help builders become more efficient early in a project's life cycle. OpenSpace feedback, delivered mid-construction, could inform their strategies or tactics for the rest of the job.
"With time-series information, we can start to make predictions and manage changes in construction," Kalanithi said. "That's really what our customers care about."
OpenSpace now counts large retail chains among its customers. They use the company's models to manage their sprawling square footage, to keep track of renovations, and to allow brand managers to check in on stores remotely.
The company's plan to use the LiDAR sensor on the new iPhones, which uses light to accurately measure distance and depth, should open it up to even more customers who will have now have OpenSpace-capable devices in their pockets.
It will also allow the company to create much more accurate digital models of analog construction tools, which could be more specific and accurate than their physical counterparts. As an example, Kalanithi highlighted tape measures: They're essential on a job site, but often, two different workers can record different dimensions for one piece of wood.
"You'd think a tape measure as the most objective thing out there," Kalanithi said. "You'd be surprised. Tape measures are pretty subjective."