Procore CEO Tooey Courtemanche: “We are making the lives of construction people better.”
Image: Ethan Pines for Forbes
On a quiet street in Montecito, California, a suburb of Santa Barbara, Procore CEO Craig “Tooey” Courtemanche is considering how best to break into his own house. It was amid the frustration of renovating this Spanish-modern-style three-bedroom 18 years ago that he built a simple app to track comings and goings of workers onsite. Now he’s using the app to redo the house again, this time to befit the CEO of one of tech’s fastest-growing companies. The app, called Procore, is the most popular piece of software in the $1 trillion US construction industry, used on hundreds of thousands of projects from sports stadiums to high-rises. Sales are approaching $200 million, good for fifth place on the 2018 Forbes Cloud 100 list. But on this dusty July day, none of that matters as Courtemanche, 51, squeezes between palm trees and then a gap in his fence.
We’re dropping by unexpectedly so Courtemanche can show me the front steps, which will look like they’re floating in water, and the bay doors to the new infinity pool, which he’s coded to open by voice. Downstairs is the yoga studio for his wife, an instructor, and the new guest room, where his 20-year-old son, a full-time Procore partnerships manager, can crash. Back at work in nearby Carpinteria, Courtemanche can watch the house come together on Procore, tracking worker schedules and fielding questions from his contractor and subcontractors, comparing progress photos to the drawings and finding out how far over budget he’s going. Employees are used to catching Courtemanche in meetings or at lunch checking progress on his home via the app. “Who else gets bug reporting from their CEO?” he says.
Other CEOs carry on courtside at NBA games; Courtemanche is excited to have lunch with construction celebrities like Dirty Jobs host Mike Rowe. But when it comes to ambition, Procore and its CEO fit right in with the brashest high-fliers in tech. “We believe we’re just in the early days,” Courtemanche says. “I want Procore to be the single source of truth for everything in construction worldwide.”
At orientation at Procore’s headquarters, a record batch of 59 new employees and summer interns gladly take a break from a log-in credentials lecture to meet their CEO. Courtemanche, oozing beach-dad charm, has dropped in to tell a few jokes and take questions. Procore’s founding legend comes up. Does he still own the house that inspired all of this? “I still have my Land Rover from 1998, the same house, even the same family,” Courtemanche quips. “That house is Procore.”
In 2002, when he founded Procore, Courtemanche was a moderately successful tech executive in Silicon Valley, making custom interfaces for online HR software. On the road constantly, Courtemanche had received an ultimatum from his wife four years earlier: She and their son were moving south to Santa Barbara, and he was welcome to join. She’d picked a home, too—one that would need a lot of work. At first flying down on weekends, Courtemanche found progress on the house moving at a glacial pace. So he did what he knew best and coded his own program to keep track.
By 2004 Courtemanche had signed up contractors for Hollywood stars like Eddie Murphy, Ben Stiller and Barbra Streisand to monitor their home renovations with Procore. Courtemanche spoke the language of construction fluently. Growing up in the affluent La Jolla area of San Diego, Courtemanche was an indifferent student, more interested in girls than schoolwork. But construction was another story. After school he’d sweep out the floors of a cabinet shop, and by 17 he’d become a journeyman carpenter after completing a six-month apprenticeship.
A disastrous year at the University of Arizona, where he flunked out with a 0.3 GPA, led to a security guard job and then community college, where Courtemanche got the grades to be accepted into a pre-med programme in San Francisco. Once north, he got caught up in the construction boom of the early 1990s, “swinging a hammer” for two years. Feeling burnt out, he took up a family friend’s offer to learn the telephony software business, then taught himself HTML. By 1993 he was a software engineer; by 1996 he’d founded a tech consultancy.
When Courtemanche built the prototype for Procore five years later, he was shocked. Construction made up nearly 10 percent of America’s economy, but even as late as 2002 its workers barely used the internet. “Holy crap, I’ve been given a time machine,” he thought.
For a fledgling software business, Santa Barbara was no San Francisco. But what it did have was plenty of well-heeled refugees from the Bay Area and Los Angeles looking for a quieter life. One investor, Steve Zahm, who had founded and then sold the e-learning company DigitalThink for $120 million, joined Procore as president in 2004 (a role he still holds today). A bigger fish, DoubleClick co-founder Kevin O’Connor, wrote Procore’s first institutional cheque, leading a $950,000 seed round and joining the startup’s board.
Procore grew, but more modestly than hoped. There’s a saying in investing: If you’re early, you’re just as good as wrong—and Procore was very early. In 2006, four years after Procore was founded, the iPhone was still one year into the future and Wi-Fi was virtually non-existent. Procore ran on laptops and required internet connections, still rare on job sites. Courtemanche and Zahm were known to fly across the country to rig up homemade hot spots for clients at a loss. When Courtemanche brought the app to Sand Hill Road to meet Silicon Valley venture capitalists (VC), he was laughed out of town. At Sequoia Capital, a low-level analyst told him that focusing on one industry vertical was a sucker’s play. “Make it a social network and I’ll write you a cheque right now,” Courtemanche remembers him saying.
When the financial crisis hit in 2008, home building froze in its tracks. Courtemanche mortgaged his house and, along with Zahm, cut his salary to zero. All but five employees were laid off. Investors expected to hear that the startup was shutting down.
But Courtemanche was stubborn. He was convinced that construction would need IT eventually. When it did, Procore would be ready. Slowly, trends shifted in Procore’s favour. Construction companies began revisiting their workflows; younger workers, who expected software to be part of their job, entered the industry. In 2010 Apple launched the iPad, bringing a sturdier device to worksites, which increasingly had access to Wi-Fi. A decade into operations, in 2012, Procore was still small, with sales of just $5 million, but growth started to hockey stick. Silicon Valley finally took notice: In 2014 Bessemer Ventures led a $15 million investment round, then poured in another $30 million alongside Iconiq Capital ten months later.
Procore’s customers were starting to get much bigger. Managers at Wieland, a 61-year-old Michigan contracting firm that operates $325 million of projects a year, have used Procore since late 2015. At Wieland’s multimillion-dollar paper mill project in Wapakoneta, Ohio, team leaders and managers are equipped with iPad Pros so they can check drawings and updates on Procore at all times. Because Procore doesn’t charge by head count but by subscription, subcontractors and partners working with customers like Wieland end up using Procore for free and then often spread it to their other projects. “We have a motto, and it’s simple: 100 percent Procore,” says Rob Krueger, Wieland’s CEO.
As Procore has added features to cover things like safety inspections and financing, it’s been able to crack some of the industry’s biggest players, like Mortenson, a $4 billion-in-sales construction giant based in Minnesota, which pays an estimated seven figures a year to keep 2,000 employees on the app. Landing these bigger customers has allowed Procore to raise a war chest of $180 million in funding since 2015, reaching a valuation of about $1 billion in late 2016.
Construction tech is now red hot, and Procore has attracted challengers both big and small. Software giants Oracle and Trimble each made $1.2 billion acquisitions in the space in the past six months, and VCs who missed out on Procore are now backing newer startups. And at least one rival quietly bid several billion dollars for Procore in the past and was rebuffed, sources say. Procore declined to comment on the overture.
Still, thanks to its years of survival, Procore’s product looks to have a head start. “I don’t think there are many companies challenging Procore that can hold a candle to their size and strategy,” says Derrick Woods, an analyst at Cowen.
In a little cliffside clearing overlooking the Pacific on Procore’s campus, the management team, sweating in the July heat, forms a half-circle around Courtemanche for their morning stand-up meeting. Now at 1,200 employees, Procore instituted the meetings companywide several years ago as
a salve for the chaos of its rapid growth.
Later that day Procore will announce a partnership with Sage, an accounting software maker and erstwhile rival.
Elsewhere, cross-functional teams are working on additional versions of Procore’s app for property owners, subcontractors and enterprise-size customers.
Those releases could be the last touches Procore needs before filing to go public ahead of an IPO, which insiders say is likely to come in early 2019. In internal meetings and with customers, Procore is already acting like a public-company-to-be, battening down the hatches for Wall Street to get its first close look at the numbers of an ugly-duckling-startup-turned-cloud leader.
Courtemanche says that after all these years, he’s not planning to hang up his hammer once he rings the market bell. As with his house, the vision for Procore may grow grander, but it’ll be the same foundation. “I’m a dog on a bone,” Procore’s CEO says. “I won’t be able to walk away.”
(This story appears in the 09 November, 2018 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)