For those of us who spend our days working in the residential construction industry, there was a pretty substantial news release today regarding the two largest players in the residential construction software sector.
While there isn’t a lot of information available yet about the specifics of this deal, we wanted to share a bit of background on the situation and our initial thoughts on what this might mean for the construction teams who currently rely on these software platforms and for the broader residential construction technology sector.
Buildertrend announced today that they have acquired CoConstruct. Terms of the deal were not disclosed, but the press release mentioned that “Buildertrend Co-Founder and CEO Dan Houghton will lead the combined company alongside Co-Founders Steve Dugger and Jeff Dugger. CoConstruct Founder Donny Wyatt will serve as an advisor to lead integration efforts.”
This is a significant announcement for the residential construction technology industry, given that these two companies are the clear #1 and #2 sized players in the space. According to the release, the combined company currently serves over 23,000 clients and 1.1 million users.
It is not an exaggeration to say that almost every builder and remodeler we’ve talked to over the past few years has tried both of these software platforms at least once, if not more, in the past to help streamline their residential construction business.
For those that pay close attention to the construction technology industry, this shouldn’t be a huge surprise.
Both Buildertrend and CoConstruct have been around for over a decade. More recently, both companies have also taken investments from separate private equity firms. CoConstruct partnered with Serent Capital in April 2018. And in December 2020, Buildertrend partnered with Bain Capital and HGGC.
With private equity investors in the mix, it makes sense they would be looking to strike deals to accelerate their growth and market share. Growth through acquisition and consolidation of market share is a fairly well-established pattern for private equity. It’s a bit less common for the two biggest players and fierce competitors to join forces, but still not surprising.
From a product and features standpoint, probably not that much - at least in the immediate term. If you are a current Buildertrend customer and are happy with their service, it seems unlikely much will change for you. Since they are the company that acquired CoConstruct, the Buildertrend product is likely the one that will remain the primary software offering.
However, it probably also means that you are unlikely to see any features that are specific to CoConstruct make their way into the Buildertrend product - at least in the immediate term. Both of these are well-established software platforms with very different technology and data underpinnings, so porting features between them is not practical.
From a pricing perspective, it is less clear. With their largest competitor now part of their company, there will be less pressure to compete on price. Time will tell what direction they decide to go on this front.
Both companies have a good reputation for customer support, so hopefully, the combined company will continue to deliver solid customer service that customers have come to expect and deserve.
This one is tricky. Whether they like to admit it or not, both Buildertrend and CoConstruct have nearly identical software products - at least in the eyes of the market. Sure, there are minor differences here and there concerning features and the user interface, but by and large, they are the same.
It seems unlikely that the combined company will continue offering both platforms in the long term, given how similar they are in terms of features and their value proposition to the market. There is a substantial cost in operating, maintaining, and continuing to innovate a software platform. The long-term economics of the Buildertrend acquisition of CoConstruct would be hard to justify if the goal was to run both platforms in parallel.
So what does this mean? Maybe not much in the very near term, but it probably does mean that current CoConstruct users will soon need to evaluate whether Buildertrend or another construction management platform available (ahem, hi we’re BuildBook!) is the right fit for them.
Well, for one - there is now one less option to evaluate when considering what software is right for your construction business! Again, both Buildertrend and CoConstruct are so similar in terms of feature set and market positioning, the comparison between the two has always been about which product you prefer, which option provides better support, and often which has the most competitive pricing.
While Buildertrend and CoConstruct are the biggest players out there, there are dozens of other products available, depending on what your business needs.
At BuildBook, we are being very intentional about building a new kind of all-in-one construction software. One that includes all of the core features that we believe the vast majority of the market needs, but without all of the extras that clutter things up and never get used. And a product that makes you look good in front of your clients.
We are also making heavy investments in our product design and underlying technology to make BuildBook extremely fast and “delightful” to use - regardless of whether you are a PM in the field, an admin in the office, or a client wanting to stay in sync with the progress of your project.
This is not something we do once and call it good. It is a philosophy that we apply to everything we do. We call it The BuildBook Way, and we feel confident that if we stick to these principles we’ll continue to deliver tremendous value to our customers, helping them deliver more value to their clients and ultimately grow their companies and achieve their goals. Win-Win-Win.
If you're worried about getting lost in the upcoming restructure and want to align your company with a platform that has a clear vision for the future, then book a demo with us to learn more. No old school hard sales tactics, we promise.
Good luck out there!