Constrafor, a construction procurement platform, has gone the ‘SAFE’ route in terms of securing new financing. The company recently closed a $7.5 million SAFE round, led by Motive Partners, with existing investors such as FinTech Collective, Clocktower Technology Ventures, Commerce Ventures, FJ Labs and NotreVis buying into the deal. The investment is expected to help the company expand its EarlyPay Program, which helps with the payment flow for subcontractors. It also allows for additional capital, lower rates, and faster payments on behalf of the customer.
A few years ago, Constrafor raised $106.3 million in debt and equity, expanding from 15,000 customers to 23,000 in the process. The company had a slight hiccup in its revenue due to changes in the credit arena, so it tweaked its credit origination process and has seen 25 percent growth each month since. To stay on top of the trends, Constrafor has incorporated AI elements, like automating manual reviews and offering a banking product via Stripe, plus partnered with Apollo to offer a credit facility.
CEO of Constrafor, Anwar Ghauche, explains that banks have been more cautious lately when it comes to funding construction projects. Thus, payments to subcontractors are getting harder to come by for those same subcontractors. This is why Constrafor’s Early Pay Program is so important, as it reduces the wait times for contractors otherwise stuck at the payment bottleneck.
Ghauche believes this new round of financing through a SAFE note was the best option for the company. The market demanded a decrease in multiples, making a priced round less preferable, and this new investment allowed the company to more swiftly reach its Series A milestones.
Constrafor was started by Anwar Ghauche and Douglas Reed and focuses on construction supply chain automation, is based in San Francisco. It serves as a modern, time-saving procurement platform for subcontractor payments, proving itself as a trusted name in the game both through its investment funds and its continuous product innovation.
