HammerTech raises Au$10m (US$7.11m) to fund expansion into the US, and accelerate its product development and sales and marketing.
HammerTech, the Melbourne, Australia-based mobile provider of health, safety and quality software for the construction industry, has announced completion of a Au$10 million (US$7.11m – £5.4m or €6.33m) Series A financing. The funding was led by Santa Monica-based Arrowroot Capital, a leading growth equity firm specialising in B2B software.
The investment will allow HammerTech to accelerate its product roadmap, grow the sales and marketing teams and support continued expansion into the United States. As part of the transaction, Chuck Haling and Matt Klein, from Arrowroot Capital, will be joining the board.
Milton Walters, CEO of HammerTech, said:
“It’s an exciting time for HammerTech and we are thrilled to have gained support and investment from Arrowroot. Within five years of being founded, we’ve worked tirelessly to introduce an advanced software platform to construction that empowers operational excellence. With Arrowroot’s experience and partnership we’re looking forward to enhancing our product capabilities, growing our global footprint, and increasing collaboration on job sites.”
Matthew Safaii, Arrowroot Capital’s Founder and Managing Partner said:
“HammerTech has positioned itself to be the go-to health, safety and quality software for the construction industry. Their mobile-first platform drives operation efficiencies, keeps workers safer and improves quality across all aspects of the construction process. We are excited to partner with the HammerTech team to help scale their platform around the globe.”
HammerTech: the company
Based in the Melbourne district of Richmond, Australia’s SaaS technology provider HammerTech has been attracting interest from several major international contractors, and – in its first major foray outside Australia – has opened US offices in Los Angeles and Seattle. Extranet Evolution talked to CEO Milton Walters about the company, its platform philosophy and its growth plans.
HammerTech’s subscription-based platform is available on all devices and is designed to meet the demands of companies seeking to better manage their operations and HSEQ obligations. HammerTech customers typically see results in valuable time saved and increased safety and quality measures.
Milton Walters is an Australian construction software industry veteran. After entering the sector in 2006 at Aconex, he has worked with other leading ConTech players including Textura and Procore during the last 12 years.
These experiences have left Walters with an abiding respect for some of the people he has dealt with – he talks with affection about Aconex’s Leigh Jasper and Rob Phillpot, Textura Europe’s Colin Smith (now chairman of Newcastle, UK-based NBS), and Procore’s Bassem Hamdy, for example. “Thanks to these fabulous people, I have had a ten-plus-year preparation in construction technology for the role I am in now. They really helped shape my thinking.”
HammerTech was established in about 2013 by a close-knit group of five friends: Ben Leach, Lucas McDonald, Bradley Tabone, James Harris and Andrew Hogben. Two had Australian construction industry experience (Leach was at Baulderstone and APP, working on facilities for the Australian Grand Prix; McDonald was also at APP and at Westpac). Two came from the tech sector as product developers (Tabone was at National Australia Bank; he and now CTO Harris also both worked at ExpressIV online), while Hogben, having just sold a recruitment business, was the “fifth Beatle” providing some finance and sales experience.
As with some other construction technology founders, frustration with over-reliance on Excel spreadsheets to manage safety and quality inspired the development of the SaaS-based HammerTech platform. “It’s been developed for safety by people within safety,” said Walters, “it’s not been developed as a spin-off of document management, for example. We don’t start with forms – our starting point is how do we increase operational efficiency and reduce risk, which ensures the correct focus.”
With APP’s Australian GP as the first client project, the business was initially funded by its founders, family and friends, and by one ‘angel’ investor. To date it has required no significant additional investment, says Walters, though it did secure a AU$700,000 Australian federal government accelerator grant in late 2017. Partly as a consequence of this grant, Walters joined the company in April 2018 (“so far it’s been the most enjoyable 12 months I’ve had in my career”). He says HammerTech now employs around 30 people, but, with the new funding, was planning to grow to around 60 people by the end of 2019. Growth to date had largely been sustained by generated revenues, not by investments or funding rounds.
HammerTech started 2018 with around 35 key accounts, but has since grown to around 100 commercial customers (“and we may double again this year”). As well as APP, early successes included adoption by Australia’s LendLease, Mirvac, and one of the country’s oldest Tier One contracting firms, Hutchinson, contracted with the company in late 2018, Walters said. He also related how the company’s focus on delivering its promised functionality has helped build customer trust.
“HammerTech expanded into the US in 2017 after receiving some enquiries in response to a LinkedIn post. Brad Tabone and Andy Hogben went over to the US, and we soon had some trial accounts. Then a Top 10 – and innovative – general contractor, DPR, signed a national agreement with us in America in December 2018, and that’s been a massive shot in the arm for us. We will be on 700 DPR projects in about 12 months, now have half a dozen people based in the US, and are recruiting aggressively in the first half of 2019 as the business expands.”
Walters also highlighted a billion dollar project for LendLease in Los Angeles, Oceanwide Plaza, as another major endorsement: “At LendLease’s safety summit in New Jersey we had safety supervisors rapt at what we were doing”. And adoption by major international contracting corporations could also see HammerTech expand into the UK and into southeast Asia, he says.
In the past year, HammerTech has increased its foothold in the Australia and North America markets and has doubled its client base. It now has tens of thousands of users on the platform and is being used on billions of dollars worth of construction projects globally.
Former Procore director of demand generation Chere Lucett joined HammerTech in 2018 and says:
“We are responding to growing regulatory requirements. Operational safety is going to be the next frontier in the US construction technology market. The industry lags behind manufacturing, but you can’t improve project management efficiency without also improving safety and quality, and we are well placed to manage that data.”
Echoing Walters’ earlier point about focusing on operations rather than paperwork, she says the HammerTech platform has been designed to track personnel, equipment and issues, providing a centralised safety and quality dashboard, helping with online orientations, developing safety plans and then supporting proactive risk management. The solution provides 16 integrated modules that make it possible to have everything in one place, allowing customers to replace paper, Excel, and individual apps.
Update (29 November 2019) – Milton Walters stepped down as CEO in October 2019, with one of the co-founders, Ben Leach, taking his place. (I understand Milton’s wife died in July after a long illness, and he is currently ‘taking some time out’.)