Mobile-first Raken builds its niche

US-based Raken is one of a recent generation of mobile-first construction software developers seeking to automate manual onsite reporting and monitoring tasks, and says it differentiates itself by its deep niche functionality.

Just over three years ago (August 2014), I visited FieldLens‘s New York headquarters and talked to one of the marketing team about their business, the north American construction industry, and competitors in the field or mobile application market. One of the businesses he mentioned was California-based Raken.

Raken background

Raken logoAt the time, both FieldLens and Raken were relative newcomers to the sector. FieldLens had launched in 2013 and was one of several mobile-first developers I talked to then (FluidCM and GenieBelt were two others). According to Raken CTO and co-founder Dr Sergey Sundukovskiy, who I spoke to this week, the Raken daily reporting app was developed by CEO Kyle Slager and also launched in 2013. It was developed initially on the Apple iOS platform, with an Android version released the following year. Slager marketed the app to industry contacts working as job foremen and superintendents in general contracting businesses in and around the San Diego area to start with. However, the user-base quickly grew through organic expansion as users jumped at the chance of switching from pen and paper to using mobile reporting.

Four years later, the paid-for edition of Raken is used by over 3000 companies, covering over 12,000 individual users (the application and its associated web reporting platform is licensed on a per-seat basis). “Often a general contractor will mandate the application to subcontractors,” Sundukovskiy told me, “and it then goes ‘viral’, with the subcontractors adopting Raken to work on their own projects.” About 10% of Raken’s customers were on enterprise deals, he said, talking about substantial “mid-market” adoption and a “long tail” of small/medium sized business users. The business is apparently adding around 100 new company customers a month.

From its Californian origins, Raken adoption has expanded across the US and into Canada, with users also located in United Kingdom (and elsewhere in western Europe), plus Australia, New Zealand and South Africa. Most of this expansion has been organic but Sundukovskiy didn’t rule out establishing direct marketing operations in other English-speaking markets (a serial entrepreneur focused on small business marketing and e-commerce, Sundukovskiy has a master’s degree in information technology from the University of Liverpool). Earlier this year (March 2017), Raken announced it had raised US$2 million to accelerate its product development.

Niche specialist

The basic app – which includes automatic weather capture, unlimited HD photos, voice-to-text, and emailed daily reports, for unlimited projects – costs US$12 per calendar month per user, billed annually, while there are progressively more fully-featured price bands of Professional (US$30) and Performance (US$37). Enterprise licences can also be negotiated offering some volume discounts depending on the numbers of users and scope of functionality required, Sundukovskiy said.

Raken also offers integrations with project management software and cloud providers such as Procore (post),
Prolog (part of the Trimble Connect ecosystem), Egnyte, and Box – “We’re not competing with these applications; where users have strong adoption of tools like Procore, they can carry on using it, but use Raken for their mobile reporting needs”.

Sundukovskiy said it differed from some reporting tools by being heavily focused on the field reporting needs of contractors and project management businesses. “It’s also less expensive then competing products, and it’s aimed at a niche sector of the construction vertical – it doesn’t offer wide but thin levels of functionality, this is inch-wide but a mile deep.” The user-base is around 65% iOS and 35% Android, he added, while the web reporting platform is hosted in Amazon Web Services facilities in the US (“we’re bi-coastal”), and he accepted that the business might need to evolve its hosting approach if it wants to compete in Europe or other markets resistant to US-based hosting.

My view

Sundukovskiy touched on the low-tech nature of its competitive marketplace when he talked about replacing pen and paper rather than competing solutions. As I have pointed out before, construction lags behind other industry sectors in terms of its adoption of digital technologies, and, in just about every country, it remains a deeply fragmented market largely comprised of small- to medium-sized businesses generally operating on thin profit margins. As a result, affordable technologies that can help such businesses save time and money while also providing visibility of issues and progress will quickly find favour.

Raken is not challenging the SaaS construction collaboration players; it is looking to complement their solutions, possibly providing strong mobile-first alternatives to the field solutions that some of them offer. But it is not the only one, and there are other well-funded mobile-first players. For example, in the US, the afore-mentioned FieldLens closed a US$8m funding round in 2014 and was recently acquired by WeWork, while Plangrid has also been strongly backed by investors (US$18m two years ago); further afield, France’s FinalCAD secured €20m (US$22.4m) Series B funding just a year ago (other players include GenieBelt, TidyBuild, Small Builders, eSUB, Corecon, Jobsite Unite, Builderstorm and SiteReportPro – this post listed some others).

But, if these applications are still automating user tasks previously undertaken manually using pen and paper and spreadsheets, there is still an untapped market to be penetrated before vendors have to start attracting users away from competing solutions.

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