Potentia Capital, Australasia’s leading technology-focussed private equity firm, has announced the acquisition of a minority stake in EstimateOne from the A$450m Potentia Fund 1. As part of the transaction, founders Andrew Ritchie and Mike Aschroft will remain major shareholders of the business and will continue to be closely involved as directors.
EstimateOne is Australia’s largest digital procurement platform for commercial construction, connecting commercial builders, subcontractors, and suppliers. The deal includes a $35m investment from Potentia Capital and Saniel Ventures, comprised of $20m of primary capital and a $15m secondary investment. Leigh Jasper (Saniel Ventures), former CEO of the construction management platform Aconex, has partnered with Potentia on the deal. Capital raised will be used to fund international growth opportunities, expand the product range and scale marketing and sales efforts for the business.
EstimateOne was founded in 2008 in Melbourne by Andrew Ritchie and Michael Ashcroft, who set out to digitise commercial construction tendering. The business today is a market leader in the construction technology space, with strong monetisation opportunities, exciting growth opportunities in adjacent markets, and favourable tailwinds as the construction sector continues to embrace digitisation.
Michael McNamara, Partner at Potentia Capital, said: “We are delighted to support EstimateOne in its next phase of growth. We’ve been highly impressed by EstimateOne’s founders and management team, the exceptional workplace culture and calibre of talent, the care and thought that has been given to the company’s vision and values, and its strong market position with a deeply engaged network of more than 50,000 builders, subcontractors and suppliers across Australia. We believe the construction sector is on the cusp of significant tech-led innovation, and look forward to supporting EstimateOne grow its leadership position in Australia and offshore.”
“Being ‘bootstrapped’ and profitable to date has allowed us to grow our business on our own terms,” Mr Ashcroft said. “As the construction industry is now at a turning point, driven by supply chain issues and labour shortages we recognise more than ever the value our platform offers, and that the business is ready to seek investment to deliver significant scale and growth. Procurement problems are very expensive for the industry and process execution and decision-making has not been well supported by technology. We want to change that. Construction technology is at a stage of rapid adoption and we have the insights, data, technology and a growing high-quality team ready to solve many of the problems that the industry faces. We are committed to delivering value through our connected network, helping customers make better decisions, and reducing costs and risks carried by builders, subcontractors and suppliers.”
“In Potentia and Saniel Ventures we’ve found capital partners that are aligned with our vision and are just as excited about the opportunity in construction technology as we are. They have already demonstrated immense value above and beyond just providing capital.”
Tim Reed (former CEO of MYOB and Potentia MD) and Potentia Partner Michael McNamara will join Michael Ashcroft, Andrew Ritchie and Isar Mazer as Directors of the company.
Johnson Winter & Slattery, EY, and LEK advised Potentia Capital and Saniel Ventures. EstimateOne was supported by Adam Shapiro of UTA CFO Advisory and DLA Piper.