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If Tuesday’s announcement that Detroit-based software startup Rivet Work closed a $5.6 million seed round is any indication, the home of the American auto industry is on the road to becoming a proptech digital destination as well.
A 3-year-old labor operations platform for construction contractor operations and job site teams, Rivet has raised $8.2 million to date.
The latest round was led by Woodside, Calf.-based Defy, which lists former New York Yankee Derek Jeter among its “startup founders and industry leaders.” Neil Sequeira, founder and partner at Defy, will be joining Rivet’s board of directors.
Others participating in the round are LegalZoom co-founder Brian Lee, Airspace co-founder and CEO Nick Bulcao, Augment Ventures, Detroit Venture Partners, Michigan Rise and Ideal Industries as well as angel investors.
The $5.6 million raised will be used to accelerate product development and sales expansion into the more than $500 billion U.S. construction skilled trades market, which is seeing greater digital adoption to attract and retain a new generation of workers, according to Rivet. The raise also comes as seed rounds for proptech startups thin and shrink in 2023.
“The second half of last year we started to get those, ‘yes, now, wow’ [responses], and basically the time to close customers decreased dramatically,” said Ryan Meitl, CEO at Rivet. He describes the company as providing “a field labor planning and management platform for companies with boots on the ground in the construction industry. Our customers are electrical, mechanical, and multitrade contractors that perform commercial and industrial construction work and have 30 or more workers in the field.”
The accelerated demand for Rivet’s software led to the company’s decision to close its seed round and to invest further in growing its 14-employee staff, as well as its marketing and sales platform, said Meitl.
“The construction industry is super dynamic, and the adage that the plan is only good until you start the work is true in construction, and it’s amplified 10 times from most other industries,” Meitl said. “So mistakes typically cascade into bigger and bigger problems and losses. And it all starts with labor: getting the right people in the right job, and getting them coordinated across many jobs, which are usually changing constantly.”
Rivet says it is seeking to standardize collaborative workforce management, forecasting, scheduling and dispatch across teams to combat challenges such as no-show positions and lost productivity. It is used by construction companies with field sizes from 20 workers into the thousands.
The company claims that it grew quickly in 2022 among commercial and industrial electrical contractors, with dozens of operations teams transitioning from manual workflows to the startup’s cloud labor management platform, resulting in more than 14,000 field job assignments being scheduled last year using Rivet.
“There’s three big reasons we got excited to invest,” said Defy’s Sequeira. “One, the team, who have actually worked together before for many years at Bosch. It makes a big difference when folks have worked together for a period of time and have spent a couple of years building this business. That’s always the most important thing to most venture capitalists.
“No. 2 is we had a specialty in vertical SaaS, whether it be in health IT or other verticals that look a little bit like construction. We have done some proptech investments as well. We like the space, generally. It’s massive. These are not just billion-dollar markets. In some cases, they’re trillion-dollar markets. And we always get excited about that.”
The final selling point for Defy was Rivet’s product-market fit and growing client base, said Sequeira.
Having settled in Detroit 12 years ago after working in a number of U.S. cities, Meitl finds the city and region ripe for startups.
“Detroit and Michigan are great places to build businesses,” Meitl said. “Detroit, particularly, has some unique characteristics that lend it to the kind of business we’re building here at Rivet. It has a long and storied history as a blue-collar town known for hard work and grit. That really embodies the construction industry.”
Rivet has customers in 15 states, “but our earliest customers are here, and also everybody that we hire,” said Meitl. “The Detroit area is one of the largest metros in the country, with nearly 5 million people, and yet it has the cost of living parity between the trades and tech that doesn’t exist anywhere else in other comparatively sized metropolitan areas.
“What this means for Rivet is that software engineers and electricians live side by side in this city. So there’s this unique ability to build closer connections and greater trust between tech and the trades. That creates a unique opportunity for us to build a really special business here that I think is harder to do in other regions of the country.”
Philip Russo can be reached at prusso@commercialobserver.com.
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