Munich Increased raw material prices are currently driving up the costs of many construction projects. “Many builders only realize late that the costs are getting out of hand,” says Benjamin Günther, co-founder of the software start-up Alasco. In the industry, books are usually still kept with Excel spreadsheets.
Alasco has set out to change that with prominent investors on board. With the software platform of the Munich company, the financial aspects of real estate projects can be planned in real time via the cloud and controlled during construction and later in the inventory. “It’s a billion-dollar market,” Günther is convinced.
Other investors have now been convinced of this. The company raised around $40 million in a Series B round of funding. The New York venture capital fund Insight Partners and the private equity platform Lightrock are new on board.
The Munich company is a good example of how the start-up ecosystem in Germany now works. Günther, Sebastian Schuon and Anselm Bauer-Wohlleb once founded the fashion search engine Stylight and sold it to Pro Sieben Sat 1 for 80 million euros.
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As business angels, they then invested in Personio early on and helped to build up the personnel management software specialist, which is now a unicorn valued at billions. Personio founder Hanno Renner is now one of the investors in Alasco. This also includes the Flixbus founders and Alexander Samwers Picus Capital.
“We want to make software for medium-sized companies”
The business model certainly shows parallels to Personio. The HR departments of smaller companies also worked primarily with Excel spreadsheets before Personio brought a software solution onto the market.
Alasco also wants to develop a completely new market. “We wanted to make software for medium-sized companies in Germany,” says Schuon. The real estate industry was chosen because it has so far been significantly less digitized than, for example, the manufacturing industry.
That has great potential. In the construction industry as a whole, which currently generates eleven trillion dollars in added value worldwide, according to a McKinsey study, digitization could increase annual profits by up to $265 billion a year within 15 years.
Benjamin Günther, Anselm Bauer-Wohlleb and Sebastian Schuon (from left to right) want to simplify the calculation of construction projects.
In order to open up the market, a lively start-up scene has now established itself. Corrux, for example, has developed a software platform with which people, machines and processes on construction sites can be networked in a central interface, similar to Industry 4.0. Founder Laura Tönnies sold her company to the proptech company Gropyus last year.
While Corrux wants to digitize the construction process itself, Alasco primarily relies on better controlling. Contracts, orders and invoices can be managed and released with the software. For example, it will be noticed more quickly if individual billing points deviate from the original budget.
Number of customers triples every year
“When you work with Excel, you’re never up to date,” says Günther. In addition, you don’t learn anything from the tables for the next project. As a result, more than 180 customers have already been won. For example, Alasco software is used to support the construction of the tallest wooden house in Hamburg – The Roots by Garbe Immobilien – and the Berlin district of Heidestrasse, which will one day be home to more than 16,000 people.
Alasco is currently tripling the number of customers every year, and according to industry estimates, sales should still be in the seven-digit range with a strong upward trend. In total, the company has collected more than 50 million euros so far.
Schuon and Günther want to keep expanding the software platform. In the future, customers should be able to digitally manage the entire life cycle of a property – from construction to maintenance to sale.
The financial data should be linked to information about sustainability, thus enabling ESG documentation for sustainability reports, for example. “We want to support our customers in making better decisions about the sustainability of their projects,” says Schuon.
Sustainability in construction planning
The two new investors should now help with the expansion. “We see great potential for pan-European expansion based on the positive feedback in the market,” said Rachel Geller, Managing Director at Insight Partners, who is also set to join the Alasco board.
The new investor Lightrock, which specializes in the topic, is supposed to help with the topic of sustainability. “The real estate industry is one of the largest carbon emitters in the world, causing 39 percent of the world’s annual greenhouse gas emissions and consuming around 30 percent of the world’s energy,” said Christopher Steinau of Lightrock. Alasco can transform the industry and “help property owners make ESG-related decisions based on solid data and benchmarks”.
With the proceeds from the financing round, Alasco now wants to increase the number of employees from 100 to 220 and expand to Great Britain. “We follow our customers,” says Günther. They want to proceed cautiously – because experience shows that many start-ups have already failed to expand abroad.
But in the longer term, the founders – like their colleagues at Personio – have big plans. “We see no end to growth,” says Günther. “We want to build an important company. And just like Hanno Renner at Personio, the Alasco founders can also imagine belonging to the Dax in the distant future.
More: Digital real estate management: Start-up Casavi finds new investors.