Procore is expanding into the Middle East and North Africa through a strategic partnership with its Abu Dhabi-based investor Mubadala.
Some six weeks after the May 2021 initial public offering (IPO) of its shares on the New York Stock Exchange (post), US-based construction management Software-as-a-Service (SaaS) provider Procore has continued its international extension. It has today (6 July 2021 news release) announced its expansion into the Middle East and North Africa (MENA), with a focus on the United Arab Emirates (UAE) and Saudi Arabia.
Mubadala Investment Company, an Abu Dhabi-based sovereign investor and existing Procore shareholder, will partner with Procore to drive its expansion into MENA. The partners say their venture will advance the opportunity for Procore’s platform to connect information and teams, drive performance, and ensure the safety of workers in the region’s construction industry. Procore says it has over 10,000 customers running in excess of one million projects around the world.
Tooey Courtemanche, Procore founder and CEO, says:
“Procore builds software for the people who build the world. We are excited for our next phase of growth across the Middle East and North Africa in partnership with Mubadala. Procore is already used in over 125 countries, and expanding globally will enable us to better partner with construction leaders around the world. Our mission is to connect everyone in construction on our global platform, so that our customers can build faster, safer and smarter.”
Ibrahim Ajami, head of ventures and growth at Mubadala, said:
“The construction sector in the Middle East is ripe for disruption as it remains largely undigitised. Procore’s platform is a game changer, and we are excited to support them on their mission to connect everyone in construction on a global platform, bringing significant efficiencies to the industry across the region.”
Procore has appointed Mohamed Swidan as Procore’s head of MENA to build regional operations with all customer touchpoints in the team. Swidan is a former regional executive at Uber, and was previously a regional head of cloud at SAP. He said:
“Construction businesses in MENA today are accelerating their digitisation and innovation. As the COVID-19 pandemic recedes, owners and contractors are under continued pressure to drive innovation while controlling costs and improving productivity. … With Mubadala we have a unique opportunity to expand our one platform approach to a growing construction market, working closely with their team to respond to market needs.”
The Extranet Evolution perspective
Procore’s global numbers look impressive, but just 12.2% of its 2020 revenues was generated from customers outside the United States. It launched in Australasia in 2017 (post), and subsequently (from 2018) established a strong UK and Ireland operation, but its presence in many of its stated 125 countries is otherwise thin.
Mubadala may feel the MENA region is “largely undigitised”, but, buoyed by the presence of numerous overseas consultants and contractors, it has long been targeted by AEC contech vendors. The Middle East was a lucrative market during the growth years of the early 2000s, but the Global Financial Crisis seriously impacted several vendors (UK-based BIW* never recovered from the hit, and, financially troubled, was eventually acquired in 2010 by Germany’s Conject, then itself later, 2016, bought by Aconex – who were among the first to build a MENA footprint).
In the MENA region, Procore faces significant competition from longer-established and now well-entrenched AEC SaaS businesses offering largely similar functionality, plus additional applications (including extensive support for BIM – still not a Procore strength). From the English-speaking world, Autodesk, Oracle (now embracing Aconex), Trimble and Bentley Systems all have strong multi-application user bases in the Gulf region, alongside long-established SaaS niche players like Asite.
Nonetheless, the support of Mubadala is a strong endorsement, and a reminder of the growing appetite for construction technology investment in recent years.
[* Disclosure: I worked for BIW Technologies, 2000-2009, and was in Dubai (post) as the first wave of local job losses due to the financial crisis began. I have undertaken past consultancy projects for Procore.]