tl;dr
Automating invoice reconciliation through digital delivery notes
Using AI to structure unstructured construction data
Shifting from manual to automated procurement processes
Building vertical SaaS for construction enterprises
Expanding from DACH to international markets
ESG reporting through granular material data analysis
There should be a better way to do this in the 21st century
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Automating invoice reconciliation through digital delivery notes
We're diving deep into how Construct is revolutionizing material management in construction. Started by Hendrik in his hometown near Heidelberg, the company emerged from observing a fundamental inefficiency: contractors manually handling delivery notes and invoices, often shipping physical papers to headquarters for reconciliation.
The process was begging for innovation. When materials arrive on site, contractors receive physical delivery notes they must manually type into Excel sheets. These then get mailed to headquarters for invoice matching. In the age of digital transformation, this manual process creates unnecessary friction and potential for errors.
Construct's solution integrates directly with material suppliers' systems, enabling digital data sharing and automating various contractor processes. Their primary focus? Invoice reconciliation - automatically matching delivery receipts with invoices, addressing a significant pain point for contractors.
Using AI to structure unstructured construction data
The construction industry presents a unique challenge when it comes to data standardization. We're looking at thousands of material suppliers, each with their own systems and processes. Some have well-defined interfaces, while others still work with handwritten notes.
Construct leverages large language models to structure this heterogeneous data effectively. Their timing couldn't have been better - they started working on this problem just before recent developments in machine learning, allowing them to harness AI capabilities to handle various data formats and qualities.
This technological approach means they don't need to push every supplier onto standardized EDI interfaces. Instead, they can work with whatever format the supplier provides, from perfectly structured data to handwritten notes, making adoption much easier for all parties involved.
Shifting from manual to automated procurement processes
We're seeing a fundamental shift in how construction companies handle procurement. The traditional process involves manual order entries costing suppliers anywhere from €5 to €50 per entry due to errors, rescheduling, and incomplete information.
Construct is transforming this by digitizing the entire procurement process. They're bringing supplier e-shops directly to construction sites, making it easier for contractors to order digitally. This not only improves efficiency but also reduces costs associated with manual order processing.
The improvement extends beyond just ordering. By digitizing delivery notes and automating invoice reconciliation, they're creating a seamless process from order to payment, eliminating manual data entry and reducing errors throughout the chain.
Building vertical SaaS for construction enterprises
Construct's approach to market entry is unique in the construction tech space. Rather than starting with site operations, they targeted financial processes, specifically approaching CFOs as their primary stakeholders. This strategy gives them a clear economic buyer with direct involvement in the process.
The company is building a vertical SaaS solution, focusing on providing deep value to a smaller number of large enterprises rather than trying to serve millions of users. This approach requires delivering significant value to each customer, as their target market consists of thousands or even hundreds of companies in Europe.
Their product strategy involves expanding from their initial use case of invoice reconciliation to touching every department within a construction company. The goal is to become so integral to operations that contractors can't function efficiently without their system.
Expanding from DACH to international markets
We're witnessing Construct's expansion beyond their German roots. They're already working with some of the largest contractors globally, including Implenia in Switzerland and Hochtief (ACM's European arm). Their presence extends from Germany to Switzerland and the Nordics.
The company's approach to internationalization is methodical. They're focusing on specific use cases that translate well across markets, particularly ESG reporting based on invoice data. This approach has allowed them to develop novel solutions that provide granular understanding of materials' carbon footprints.
Their expansion strategy leverages their strong position in the DACH region while carefully selecting which aspects of their solution to prioritize in new markets. This measured approach ensures they maintain their high standards of service while growing their international presence.
ESG reporting through granular material data analysis
We're seeing a revolutionary approach to ESG reporting in construction. Construct has developed capabilities to provide detailed carbon footprint analysis through their material data collection. This goes beyond traditional methods where companies typically extrapolate carbon footprints from single projects.
Their system can determine accurate and arguable CO2 footprints by properly structuring and mapping material data. While transportation data remains a missing piece, their current capabilities far exceed what most construction companies are doing with carbon accounting for CSRD compliance.
The company has developed this solution in partnership with major players like Hochtief, creating unprecedented granular understanding of materials' carbon footprints. This positions them well as regulatory requirements around ESG reporting continue to evolve.
Companies/Persons Mentioned
Hochtief: https://www.hochtief.de/
Scalera: https://www.scalera.ai/en
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Timestamps
(00:00) - Introduction
(32:15) - Construct's origin and €12.5M funding round
(35:44) - AI and machine learning in construction
(41:10) - Future of invoicing and procurement
(47:17) - Data collection and supplier integration
(54:58) - Market dynamics and competition
(01:11:25) - Angel investors and future plans
#ConstructionTech #MaterialManagement #ESGreporting #ProcurementAutomation #ConstructionData #AIinConstruction #VerticalSaaS #SupplyChain