Brazilian construction technology startup Ambar has announced it has raised a major Series C round: R$204 million, about $36 million at today’s average rate. The round was co-led by Brazil-based Echo Capital and Oria Capital, with the participation of TPG Capital, Argonautic Ventures and others.
Ambar was founded in 2013 with the ambition to use technology to make the civil construction process more efficient. According to the company, it has raised R$360 million in equity to date. That’s about $100 million, CEO Bruno Balbinot estimated.
This $100 million figure is higher than the current dollar equivalent of R$360 million, but the exchange rate has changed quite a bit over the years, so it’s not easy to figure out that number. And on the other hand, it doesn’t take into account the fact that the company also raised venture capital.
Regardless of the exact number, the bottom line is that Ambar now has a significant amount of capital to carry out his plans. Speaking to BestFitnessBands, Balbinot explained that the startup plans to use the proceeds to boost its company’s digitization arm, which he sees a strong need for across Latin America.
While Spanish-speaking Latin America generates some of its revenue, it is Brazil where Ambar is most present, Balbinot said. The startup’s home country offers two advantages: it is the largest market in the region and Brazilian Portuguese acts as a moat against competitors.
According to Ambar’s site, it has 467 active customers. Three of these are in the US, but their presence is more of a learning experiment, Balbinot told me. In contrast, it is currently present on 1,500 construction sites across Brazil.
Ambar has two sides: digitization, which it now wants to boost further, and industrialization, which some media outlets have compared to Lego for the construction industry.
However, Ambar is not a general contractor. “Our approach is to work with those who build, and we will never build,” Balbinot said in Portuguese. Rather than simply claiming that Ambar is a technology company, he backs it up with its unit economy, which is “much higher than in the construction industry”.
Balbinot and his co-founder Ian Fadel have an unexpected source of inspiration: the automotive industry. Having both worked in partnership with Volkswagen, they hope to bring the same kind of process-driven approach to the construction industry.
Transforming the construction company to make it more efficient also makes it more sustainable. By optimizing human and material resources, Ambar reduces waste, a huge by-product of traditional construction.
This is an issue that the newest investors are addressing. Oria Capital is a B company, and the environment, society and governance (ESG) section of its site explains that “Oria’s portfolio aims to contribute to the key sustainable development goals set by the UN.” suggested.”
In addition, the Series C round was co-led by Echo Capital, the newly formed growth fund of Ambar board member Guilherme Weege, which has ties to the United Nations Global Compact initiative. The CEO of fashion group Grupo Malwee is one of the business leaders who signed the Business Ambition for 1.5°C of the initiative.
Both funds also have portfolio success stories that Ambar likes to emulate. Weege’s family office backed Infracommerce, a Brazilian company that recently went public on the Novo Mercado segment of São Paulo’s B3 stock exchange. As for Oria, the third $100 million fund funded a follow-up investment in Zenvia, which went public on Nasdaq last July.
Ambar is also part of the companies supported by Oria’s third fund and has big growth plans for next year: “We are going to double the number of concurrent construction works with applied Ambar products and gain 970 new customers by 2022,” said Balbinot.
After recently purchasing software company Autodoc, Balbinot and his team plan to make the IT side of their business a priority. The startup wants to remove fragmentation and give its customers “access to everything on just one platform,” Balbinot said. “If there were 10 applications and a lot of people to manage it all, we now offer everything unified, with the same login.”