Streamlining complex construction procurement in Australia could be platform for growth into other markets, EstimateOne’s founders believe.
I have been writing about web-based tendering solutions for the construction industry for around 10 years, watching what has been a slow and still somewhat gradual expansion.
By 2005, my then employer, BIW Technologies (now Conject) had launched an e-tendering solution that re-used design information collated by the existing project team, and this UK SaaS construction collaboration vendor’s efforts were quickly emulated by, among others, 4Projects, Asite and Sarcophagus. Then, in October 2007, the Royal Institution of Chartered Surveyors (RICS) launched what was, to me at least, an ill-advised attempt to create a stand-alone e-tendering platform, and it duly struggled to gain traction in its first two years (post). Other stand-alone UK solutions have also been launched – such as Asktobi (apparently due to be relaunched later this year) and Darley e-tender.
E-tendering solutions have also been developed by some non-UK-based collaboration vendors, like Australia’s Aconex, who launched Bidcontender in early 2011; and in April 2014 I described how India-based Nextenders was planning to target the UK construction market. And this ignores the bid management capabilities built into various SaaS platforms offered by north American-based vendors (albeit catering for an often less complex and fragmented supply chain than that found in the UK and former British Commonwealth countries).
EstimateOne targeting Australasian e-tendering
But let’s take a closer look at another e-tendering player in the Australasian market. The ANZ collaboration sector is increasingly competitive – the former 4Projects, Asite, Conject and Newforma are just some of the firms challenging the indigenous providers (I saw Asite was recently recruiting for a Sydney-based SaaS sales executive). However, take-up of construction bid management and e-tendering by Australian supply chains is seemingly dominated by three main players: the afore-mentioned Bidcontender, Cordell (part of the giant Reed business information group) and another Melbourne-based company, EstimateOne.
I talked to EstimateOne’s founders Andrew Ritchie, left, and Mike Ashcroft, right, recently. The duo – respectively, a banking industry project manager and a commercial estimator and project manager – started EstimateOne in 2008, and have boot-strapped the company to its current (profitable) position without additional investment. In 2012-13, the business turned over $1.27m and is forecast to achieve revenues of $2.15m in 2013-14.
The founders had identified that commercial subcontractors had low visibility of forthcoming project opportunities and set about creating a lead generation toolset that, for $100/month ($1000/year), would help businesses spot and then track new local/regional business opportunities and identify the successful main contractors they needed to target. Not hard-sold, simply marketed without technical jargon (eg: talk of SaaS, cloud, etc) direct to estimators, they have found a ready market, with around one in twelve of 22,000 SME subcontractors currently delivering around 85% of EstimateOne’s revenues.
From this simple beginning, they then began to target head (main) contractors who were looking to streamline and simplify the issue of tender package information to shortlisted suppliers. EstimateOne could replace the email or Dropbox-type file-sharing services that many firms previously relied on, making it easier for contractors to manage address books, distribution lists and documentation. Some 400 businesses are now regular users of the EstimateOne service, listing their project opportunities online for free, with over 100 of these then paying $3,000/year for EstimateOne’s end-to-end document issue services, which covers detailed tender dialogues such as queries and addenda.
While Aconex sought to expand rapidly overseas, its Bidcontender operation has remained focused on the Australasian market, but it is facing fierce competition from EstimateOne, which, according to Ritchie, “delayed export in order to double-down on the domestic Australian market.” As a result, EstimateOne is now, he says, “the clear number two player in this market, narrowly behind BidContender, and closing fast.”
Now, however, they are also beginning to look beyond Australia and the logical next step of New Zealand. Singapore, Malaysia and other parts of south-east Asia figure on their radar, as do UK, Europe and north America. And localising their solution for international markets does not phase them – they have already planned a Spanish version of their platform should they enter the US market, and they talked about a Chinese edition as an imminent step in the next couple of years.