Build-online.com, an Irish business-to-business Internet company which intends to create an online market for the Irish construction industry, has secured a $2 million (€1.99 million) venture capital investment as it prepares to introduce its services across Europe.
Analysts estimate that the architectural, engineering and construction industry constitutes a $1.7 trillion addressable market for Internet companies. Of that, $500 billion is in construction.
Founded in 1998, Build-online.com has attracted funding from Irish venture capital firm Delta Partners and from Banc Boston Capital in the US.
According to company president Mr Mark Suster, the investment represents the first of a series of capital-raising initiatives. Further investments would be announced in the new year, he said.
"We plan to hit Europe very fast so we can get first-mover advantage," said Mr Suster.
The company is creating a digital procurement marketplace that allows buyers and sellers in the construction industry meet on line to tender for business.
In addition, Build-online.com plans to enter the ASP (applications service provider) market, considered one of the hot Internet markets of the future. ASPs rent applications to companies so that businesses do not have to purchase and maintain software and files themselves.
Europe has no significant players in online construction industry, although several public start-ups exist in the US, including Ebricks.com, Bid.com and Buzzsaw.com.
US companies have focused on ASP rather than procurement, enabling partners to move all the paperwork involved in a construction project online, said Mr Suster.
The company hopes to become a neutral broker for buyers and sellers.
Initially, participants would follow the usual routine of soliciting bids for products. However, said Mr Suster, "we know, given an electronic market, that we have the opportunity to try new business models".
These might include offering excess inventory anonymously, running an exchange or launching a so-called "reverse auction" site, where participants state what they are willing to pay for a product or service and providers can match or improve on the price.
The company intends to make money by taking a small percentage of all transactions.
However, Build-online.com will face the challenge of attracting the highly traditional construction industry online and convincing it to change its business models. Build-online.com intended to target Europe not as a single market but as a series of regional markets, said Mr Suster. The typical European regional market - and Ireland would itself be considered a region - served five million people and had an $11.75 billion total construction market of which $4.7 million was building products, said Build-online's chief executive, Mr Brian Moran.
In Ireland, Build-online.com had attracted 1,000 of an estimated 3,500 participants, said Mr Suster, and was offering its services free of charge for a trial period.
