- Construction software management company Procore Technologies is reportedly delaying plans for an initial public offering (IPO), likely due to the coronavirus pandemic’s impact to the economy.
- Procore first filed initial paperwork for the IPO in February, then opted for a round of private funding, raising above $150 million at a valuation of $5 billion, according to Bloomberg. The company posted a net loss of $83 million on $289 in revenue in 2019, according to Procore’s filing with the U.S. Securities and Exchange Commission. It’s revenue grew by about 55% in comparison to 2018.
- Construction Dive reached out to Procore, but the firm declined to comment on the IPO's status.
The software as a service (SaaS) provider did not set a date on its initial IPO paperwork filing, but said in the document it would in the near future.
In each of the company’s three years of reporting, it’s recorded net losses: $55.5 million in 2017; $56.7 million in 2018; and $83 million in 2019. The number of Procore users, however, has doubled in that time, reaching nearly 1.3 million at the end of 2019. Enterprise clients are able to invite new clients at no additional cost to encourage widespread adoption of Procore’s products.
Procore’s S-1 filing indicated investors would be getting in on a $9.4 billion annual potential market opportunity for its products. That number is based on the potential number of clients from owners, general contractors and specialty contractors in each of Procore’s geographic markets: U.S., Canada, Mexico, the United Kingdom, Ireland, Australia and New Zealand.
The company’s intent to file for an IPO also acknowledged potential investor risks such as:
A history of losses.
Potential future decreases in construction spending.
The inability to maintain and enhance the Procore brand.
Failure to compete effectively.
Potential future loss of key employees.
A potential miscalculation of future ma.rket opportunity.
Early into the coronavirus pandemic shutdowns, Procore announced an integration with Zoom, allowing clients to use the video meeting application through the Procore software.