Construction is among the most archaic and cumbersome businesses in India with almost 80 percent of the sector being unorganised and managed by orthodox developers.
From unaccounted project delays and cash flow problems to changing client demands, debt burdens, and lack of transparency — it has been riddled with issues. More so after the pandemic, with construction activity hit by labour shortage and disruptions in the raw material supply due to lockdown restrictions.
Can technology come to the rescue?
Jayesh Rajpurohit, a civil engineer from IIT Roorkee, believes so.
Hailing from a Marwari family that was in the construction business for years, he was exposed to the perils of the sector early on. Jayesh was acutely aware that the industry suffered from a “severe tech deficit”.
Brick&Bolt Co-founders Arpit and Jayesh Rajpurohit
In 2018, he (along with his brother Arpit Rajpurohit) founded as a tech-enabled construction marketplace to bring trust, predictability, and transparency in housing projects.
“We met with different contractors to understand the problems faced by customers. There were many tangible pain points and the segment had low competition,” Jayesh tells YourStory.
The Bengaluru-based startup identified four key pain points: a) lack of transparency in contracts, b) mid-project price escalations, c) unexpected delays, and d) advance payments demanded by contractors. “We knew we had to have a fully-managed marketplace like Urban Company or Ola to solve these problems,” Jayesh says.
The challenge was to make construction standardised and predictable “across projects, cities, and contractors”. And it could only be done with technology.
End-to-end construction marketplace
Brick&Bolt developed an end-to-end online marketplace that connects customers with a curated set of service providers, including contractors, architects, designers, carpenters, and other construction professionals.
Homeowners have to fill up a request form depending on their requirements, receive a cost estimation from the platform, and book the service by paying a fee.
Brick&Bolt operates a tech-enabled construction marketplace for housing projects
To remove opacity in construction timelines, Brick&Bolt built a proprietary AI-led engine that predicts work schedules and potential delivery dates for every project. Unlike traditional operators, the platform also levies penalties (1 percent of the project cost per month) on service providers in case of “non-permissible delays''.
Brick&Bolt’s technology also enables quality checks and real-time tracking of projects using computer vision, manages workflow updates from site engineers from day one to the final delivery, and allows communication between all parties.
Jayesh elaborates,
“We have built an in-house price quotation mechanism and a 310-point quality assessment system. All project managers have an inspection app in which they have to key in site updates thrice a week. We believe there should not be any grey area between the contractor and the customer.”
In order to solve price escalations and bring about payment transparency, Brick&Bolt operates on an escrow model, where customers transfer money for every stage of the project. The payment is released to the contractor only after completion of that stage.
This not only helps build trust between stakeholders, but also curbs cost overruns and motivates contractors to deliver projects ahead of schedule.
Growth and business model
Since its inception, Brick&Bolt has curated more than 280 contractors and booked over 800 projects across Bengaluru and Mysuru. Earlier in July, it launched in Hyderabad, where it has already signed up 30+ contractors.
The startup mainly focuses on B2C residential construction with average project costs ranging between Rs 7-8 lakh and Rs 20 lakh. Brick&Bolt plans to launch in Chennai, Delhi, and Pune, and book 1,500 projects by the end of the year.
Co-founder Arpit Rajpurohit said in a prior statement,
“Currently, Real Estate Regulatory Authority (RERA) laws are applied only on large construction projects, whereas smaller residential projects do not have any specific laws in place. Brick&Bolt is helping customers realise their dreams by implementing RERA-like features in home and small construction, making it transparent and reliable.”
Brick&Bolt has booked 800+ projects in Bengaluru and Mysuru, and has launched in Hyderabad
The startup claims to have witnessed a 15X growth in revenues since 2018. Besides pocketing a project booking fee, it also earns a commission on each transaction between customers and contractors.
Last year, Brick&Bolt started a construction material marketplace targeted at B2B customers and commercial real estate projects. It tied up with multiple vendors to offer 1,000+ SKUs on its platform.
“We wanted to control the customer experience completely, Hence, we got into supplying material to our contractors. The B2B vertical also adds to the topline of the company,” says the founder.
Funding and future roadmap
In February 2020, Brick&Bolt raised $1.5 million in a Pre-Series A round led by Surge, Sequoia Capital’s rapid scale-up programme for early-stage startups.
The round also saw participation from angel investors, including Livspace founders Anuj Srivastava and Ramakant Sharma, Aakash Goel of Trifecta Capital, Meghna Agarwal of IndiQube, and Navin Dhanuka of Piramal Fund Management.
Later in August, Brick&Bolt went on to raise an additional $2.2 million in a Series A round led by Germany-based construction-focused fund Foundamental.
India's construction sector is projected to be worth $640 billion by 2025
Brick&Bolt hopes to ride the tide of increased homeownership post the pandemic. Its goal is to hit an annualised GMV of $5 billion and have a presence in India’s top 15 cities by 2025.
“Post-COVID-19, commercial construction has taken a hit, and people are getting into individual houses as they move back to their hometowns. This is going to be a permanent trend,” Jayesh reveals.
He adds, “Our challenge is to move the millennial customer from buying a flat to building an individual home. Because owning a house has a better ROI.”
The startup competes with the likes of Infra.Market, BuildSupply, BuildNext, Brick2Wall, 100Pillars, Tracecost, Bandhoo, MistryMitra, and upcoming corporate-backed real estate marketplaces like JSW One (owned by the JSW Group) in an industry estimated to be worth $640 billion by 2025.
Aided by government initiatives in infrastructure development and affordable housing, India’s construction industry is poised for a boom.
Jayesh signs off by saying, “We want to tap into this massive market, providing a platform that combines technology with transparent processes, making construction organised, accessible, and seamless for residential users."
Edited by Saheli Sen Gupta
Link : https://yourstory.com/2021/07/sequoia-surge-proptech-startup-brickbolt-construction-housing
Author :- Sohini Mitter ( )
July 21, 2021 at 06:25AM
YourStory