A few days ago, Autodesk announced that it was acquiring construction productivity software company PlanGrid for $875 million net of cash. And Autodesk said that the acquisition will enable the company to offer a cloud-based construction platform.
What does PlanGrid’s software do? PlanGrid enables contractors, subcontractors, and owners of commercial, heavy civil, and many other industries work together during the construction project lifecycle.
And PlanGrid’s software platform has real-time collaboration so that the field and the office are kept on the same page. Plus it gives builders real-time access to project plans, blueprints, tasks, progress photos, daily field reports, submittals, etc.
“As designing and making converge, Autodesk is connecting project data from design through construction and putting predictive insights into the hands of contractors,” said Autodesk CEO Andrew Anagnost in a statement. “There is a huge opportunity to streamline all aspects of construction through digitization and automation. The acquisition of PlanGrid will accelerate our efforts to improve construction workflows for every stakeholder in the construction process.”
In a report earlier this month, Forbes pointed out that Autodesk has been focusing on the shift to cloud computing software over the past year in order to stay competitive. The Forbes report said that Anagnost decided construction was the market that was “most ripe for attack” as the company was moving more to the cloud. The global construction software market was expected to reach $10 billion by 2020 says the Forbes report.
Autodesk’s Construction General Manager Jim Lynch said that this acquisition allows the company to do more for general contractors and the company has new growth opportunities with subcontractors and owners. The workflows between PlanGrid’s software, Autodesk Revit, and the Autodesk BIM 360 construction management platform will be integrated.
“At PlanGrid, we have a relentless focus on empowering construction workers to build as productively as possible,” added PlanGrid CEO Tracy Young. “One of the first steps to improving construction productivity is the adoption of digital workflows with centralized data. PlanGrid has excelled at building beautiful, simple field collaboration software, while Autodesk has focused on connecting design to construction. Together, we can drive greater productivity and predictability on the jobsite.”
Back in 2015, Young was on stage at the TechCrunch Disrupt event in San Francisco where she said that the industry was ripe for change. At the event, Young said that that blueprints information was “all tracked on paper right now and they’re constantly, constantly changing.” This often causes errors, which ends up being very costly for contractors.
Young used to be an engineer at a construction company where she had to make paper copies and immediately realized that this process needed to be improved by bringing everything online. Young started pushing for this idea in 2011 to move all that paper to the cloud and have it available on an iPad.
This was an out-of-the-box idea at the time since traditional enterprises were not receptive to the idea of moving to the cloud back then. But the idea has clearly paid off.
At the time of the acquisition, PlanGrid was used on more than one million projects across commercial, heavy civil, and other industries in 90 countries. PlanGrid has 400 employees, 12,000 customers, and 120,000 paid users. And PlanGrid’s cloud hosts over 50 million blueprint sheets.
Autodesk and PlanGrid have developed complementary construction integration ecosystems where customers can connect other software applications. This acquisition — which is subject to customary closing conditions and is expected to close during Autodesk’s fourth quarter of 2019 — will expand its integration partner ecosystem. Autodesk said that it expects PlanGrid to drive approximately $100 million in ARR for the fiscal year 2020.
PlanGrid had raised approximately $69 million in funding from Y Combinator, Founders Fund, Northgate Capital, Sequoia Capital, Tenaya Capital, and several other investors. And PlanGrid participated in the Y Combinator startup accelerator program in 2012.