Briq, the next building block in tech’s reconstruction of the construction business, raises $3 million

Bassem Hamdy has been in the construction business for a long time.

He spent the last few years at the construction software business Procore, now a $3 billion company developing technology for the construction industry, and now Hamdy is ready to unveil his next act as chief executive and co-founder of Briq, a new software service for the industry.

Hamdy started Briq with his own cash, amassed through secondary sales as Procore climbed the ranks of startups to reach its status as a construction industry unicorn. And the company has just raised $3 million in financing to fund its expansion.

“With enough secondaries you can afford to make your own decisions,” Hamdy says. 

His experience in construction dates back to his earliest days. Hailing from a family of construction engineers, Hamdy describes himself as a black sheep who went into the financial services industry — but construction kept pulling him back.

Beginning in the late nineties with CMIC, which was construction enterprise resource planning, and continuing through to Procore, Hamdy has had success after success in the business, but Briq is the culmination of all of that experience, he says. 

“As much as data entry helps people it’s data intelligence software that changes things,” says Hamdy. 

Briq chief executive Bassem Hamdy

The Santa Barbara, Calif.-based company is part of a growing number of Southern California technology startups building businesses to service large swaths of specific industries — specifically real estate and construction.

Already, Procore is a $3 billion behemoth, and ServiceTitan has become a billion-dollar company as well, with its software and services for air conditioning and appliance repairmen.

Now Hamdy’s Briq, with backing from Eniac Ventures and MetaProp NYC, is hoping to join their ranks.

“Bassem built and helped run the most successful construction software businesses in the world. It is rare and humbling to have an opportunity to help build a company from the ground up with an industry legend,” says Tim Young, founding general partner at Eniac Ventures . “The technology Bassem and his team are building will do something the industry has never seen before: break down data silos to leverage information in real time. Bassem has built and run the most successful construction software businesses in the world, and his knowledge of the construction space and the data space is second to none.”

The company, formerly called Brickschain, uses a combination of a blockchain-based immutable ledger and machine learning tools to provide strategic insights into buildings and project developments.

Briq’s software can predict things like the success of individual projects, where demand for new projects is likely to occur and how to connect data around construction processes.

Briq has two main offerings, according to Hamdy. ProjectIQ, which monitors and manages individual projects and workflows — providing data around different vendors involved in a construction project; and MarketIQ, which provides market intelligence around where potential projects are likely to occur and which projects will be met with the most demand and success.

Joining Hamdy in the creation of Briq is Ron Goldschmidt, an experienced developer of quantitative-based trading strategies for several businesses. Hamdy, a former Wall Streeter himself, has long realized the power of data in the construction business. And with the new tools at his disposal — including the blockchain-based ledger system that forms the backbone of Briq’s project management software, Hamdy thinks he has developed the next big evolution in technology for the industry.

Briq already counts Webcore, a major contractor and developer, as one of its clients, along with Kobayashi, Probuild, Hunter Roberts OEG and Gartner Builders. In all, the company has contracts with nearly 12 developers and contractors.

All of the insights that Briq can provide through its immutable ledger can add up to big savings for developers. Hamdy estimates that there’s roughly $1 trillion in waste in the construction industry.

Briq relies on IBM’s Hyperledger for its blockchain backbone and through that, the company has a window into all of the decisions made on a project. That ledger forms the scaffolding on which Briq can build out its projections and models of how much a building will cost, and how could conceivably be made on a project.

“Construction and infrastructure are integral to society, but the decision-making process behind how, when, where, and why we build is no longer working,” said Hamdy, in a statement. “We aren’t just solving a construction problem, we are solving a societal problem. If we are to meet the infrastructure needs of both the developed and developing world, we must improve our decision-making and analysis around the data we have. We are thrilled to have the support of Eniac Ventures as we enter the next phase of our journey.”

Briq, the next building block in tech’s reconstruction of the construction business, raises $3 million

Bassem Hamdy has been in the construction business for a long time.

He spent the last few years at the construction software business Procore, now a $3 billion company developing technology for the construction industry, and now Hamdy is ready to unveil his next act as chief executive and co-founder of Briq, a new software service for the industry.

Hamdy started Briq with his own cash, amassed through secondary sales as Procore climbed the ranks of startups to reach its status as a construction industry unicorn. And the company has just raised $3 million in financing to fund its expansion.

“With enough secondaries you can afford to make your own decisions,” Hamdy says. 

His experience in construction dates back to his earliest days. Hailing from a family of construction engineers, Hamdy describes himself as a black sheep who went into the financial services industry — but construction kept pulling him back.

Beginning in the late nineties with CMIC, which was construction enterprise resource planning, and continuing through to Procore, Hamdy has had success after success in the business, but Briq is the culmination of all of that experience, he says. 

“As much as data entry helps people it’s data intelligence software that changes things,” says Hamdy. 

Briq chief executive Bassem Hamdy

The Santa Barbara, Calif.-based company is part of a growing number of Southern California technology startups building businesses to service large swaths of specific industries — specifically real estate and construction.

Already, Procore is a $3 billion behemoth, and ServiceTitan has become a billion-dollar company as well, with its software and services for air conditioning and appliance repairmen.

Now Hamdy’s Briq, with backing from Eniac Ventures and MetaProp NYC, is hoping to join their ranks.

“Bassem built and helped run the most successful construction software businesses in the world. It is rare and humbling to have an opportunity to help build a company from the ground up with an industry legend,” says Tim Young, founding general partner at Eniac Ventures . “The technology Bassem and his team are building will do something the industry has never seen before: break down data silos to leverage information in real time. Bassem has built and run the most successful construction software businesses in the world, and his knowledge of the construction space and the data space is second to none.”

The company, formerly called Brickschain, uses a combination of a blockchain-based immutable ledger and machine learning tools to provide strategic insights into buildings and project developments.

Briq’s software can predict things like the success of individual projects, where demand for new projects is likely to occur and how to connect data around construction processes.

Briq has two main offerings, according to Hamdy. ProjectIQ, which monitors and manages individual projects and workflows — providing data around different vendors involved in a construction project; and MarketIQ, which provides market intelligence around where potential projects are likely to occur and which projects will be met with the most demand and success.

Joining Hamdy in the creation of Briq is Ron Goldschmidt, an experienced developer of quantitative-based trading strategies for several businesses. Hamdy, a former Wall Streeter himself, has long realized the power of data in the construction business. And with the new tools at his disposal — including the blockchain-based ledger system that forms the backbone of Briq’s project management software, Hamdy thinks he has developed the next big evolution in technology for the industry.

Briq already counts Webcore, a major contractor and developer, as one of its clients, along with Kobayashi, Probuild, Hunter Roberts OEG and Gartner Builders. In all, the company has contracts with nearly 12 developers and contractors.

All of the insights that Briq can provide through its immutable ledger can add up to big savings for developers. Hamdy estimates that there’s roughly $1 trillion in waste in the construction industry.

Briq relies on IBM’s Hyperledger for its blockchain backbone and through that, the company has a window into all of the decisions made on a project. That ledger forms the scaffolding on which Briq can build out its projections and models of how much a building will cost, and how could conceivably be made on a project.

“Construction and infrastructure are integral to society, but the decision-making process behind how, when, where, and why we build is no longer working,” said Hamdy, in a statement. “We aren’t just solving a construction problem, we are solving a societal problem. If we are to meet the infrastructure needs of both the developed and developing world, we must improve our decision-making and analysis around the data we have. We are thrilled to have the support of Eniac Ventures as we enter the next phase of our journey.”

Investors are still failing to back founders from diverse backgrounds

The large majority of venture dollars are invested in companies run by white men with a university degree, according to a new report by RateMyInvestor and Diversity VC.

This new data reveals that despite the lip service investors have paid to backing founders from diverse backgrounds, much, much, more work needs to be done to actually achieve the industry’s stated goals. It also shows the vast gulf that separates the meritocratic myth that Silicon Valley has created for itself from the hard truths of its natural nepotistic state.

In 2017, venture capital investment reached $84.24 billion, a height not seen since the dot-com bubble of the early 2000s. The data from RateMyInvestor and Diversity VC covers a survey of the seed to Series D investments made during that year from what the two organizations selected as the top 135 firms by deal activity. Those firms invested in 4,475 companies, which collectively included 9,874 co-founders, according to the report.

Of those co-founders only 9 percent were women, while 17 percent identified as Asian American, 2.4 percent identified as Middle Eastern, 1.9 percent identified as Latinx and 1 percent identified as black.

“VCs should make more of a deliberate effort to spend quality time with communities of color that are otherwise unfamiliar,” said Suzy Ryoo, a venture partner and vice president of technology at Cross Culture Ventures . “Another tactical suggestion would be to co-host salon dinners community events with the growing group of early-stage venture funds managed by diverse investors, such as Cross Culture Ventures, Backstage Capital, Precursor Ventures, etc.”

The data compiled by Diversity VC and RateMyInvestor contains some other staggering statistics. Ivy League-educated founders captured 27 percent of all the dollars invested in venture capital startups, while all graduates from all other universities across the U.S. represented 50 percent of venture funding. Founders who graduated from international institutions had nearly 16 percent of venture funding. Founders without a university degree accounted for around 6 percent of the total capital invested.

Finally, investors are still wildly reluctant to leave Silicon Valley to look for new deals, according to the survey. This despite skyrocketing prices for real estate and talent and the emergence of big technology ecosystems in cities across the U.S.

“Silicon Valley has done a poor job of fostering diversity of all forms, especially diversity of thought,” said DCM partner Kyle Lui. “VCs and founders tend to back/hire people who are in their existing network who most likely share the same views as them, went to the same school as them, and shared similar life experiences as them.”

Investors are still failing to back founders from diverse backgrounds

The large majority of venture dollars are invested in companies run by white men with a university degree, according to a new report by RateMyInvestor and Diversity VC.

This new data reveals that despite the lip service investors have paid to backing founders from diverse backgrounds, much, much, more work needs to be done to actually achieve the industry’s stated goals. It also shows the vast gulf that separates the meritocratic myth that Silicon Valley has created for itself from the hard truths of its natural nepotistic state.

In 2017, venture capital investment reached $84.24 billion, a height not seen since the dot-com bubble of the early 2000s. The data from RateMyInvestor and Diversity VC covers a survey of the seed to Series D investments made during that year from what the two organizations selected as the top 135 firms by deal activity. Those firms invested in 4,475 companies, which collectively included 9,874 co-founders, according to the report.

Of those co-founders only 9 percent were women, while 17 percent identified as Asian American, 2.4 percent identified as Middle Eastern, 1.9 percent identified as Latinx and 1 percent identified as black.

“VCs should make more of a deliberate effort to spend quality time with communities of color that are otherwise unfamiliar,” said Suzy Ryoo, a venture partner and vice president of technology at Cross Culture Ventures . “Another tactical suggestion would be to co-host salon dinners community events with the growing group of early-stage venture funds managed by diverse investors, such as Cross Culture Ventures, Backstage Capital, Precursor Ventures, etc.”

The data compiled by Diversity VC and RateMyInvestor contains some other staggering statistics. Ivy League-educated founders captured 27 percent of all the dollars invested in venture capital startups, while all graduates from all other universities across the U.S. represented 50 percent of venture funding. Founders who graduated from international institutions had nearly 16 percent of venture funding. Founders without a university degree accounted for around 6 percent of the total capital invested.

Finally, investors are still wildly reluctant to leave Silicon Valley to look for new deals, according to the survey. This despite skyrocketing prices for real estate and talent and the emergence of big technology ecosystems in cities across the U.S.

“Silicon Valley has done a poor job of fostering diversity of all forms, especially diversity of thought,” said DCM partner Kyle Lui. “VCs and founders tend to back/hire people who are in their existing network who most likely share the same views as them, went to the same school as them, and shared similar life experiences as them.”

One-year-old Ribbon raises $225M to remove the biggest stress of home buying

Big problems require big war chests. Ribbon wants the biggest chest of them all.

The startup, which was founded just about a year ago by ex-LendingClub head of strategic development Shaival Shah and ex-Twitter/TellApart engineer Jian Wei Gan (who, full disclosure, is married to TechCrunch columnist Joyce Yang), wants to replace the incredible stress of securing a mortgage during the home buying process with a Ribbon Offer: If a buyer can’t secure a mortgage in time for close, Ribbon will pay for the house itself and give the buyer extra time to get financing.

It’s a simple premise, but potentially revolutionary in its effect on home buying in the United States, and Ribbon’s investors have taken notice. After raising a small seed earlier this year, the company announced today that it has raised $225 million in a combination of debt and Series A equity financing. (The company refused to go on the record about the breakdown of debt and equity.) The equity portion was led by its existing seed investors Bain Capital Ventures, Greylock, NFX and NYCA.

Understanding Ribbon requires understanding the immense difficulties of consumer home buying. Home ownership remains a dream for most Americans, but actually purchasing a home in the United States remains incredibly challenging. From finding a home to negotiating with a seller and handling hundreds of pages of paperwork — all of it together can create one of the most stressful periods of anyone’s life.

And it is getting even more intense. For consumers buying homes, their competitors are often not their fellow humans, but rather large investment firms that come with all-cash offers and guarantees to close. As The Wall Street Journal noted last year in a deep dive on the practice, “All told, big investors have spent some $40 billion buying about 200,000 houses, renovating them and building rental-management businesses, estimates real-estate research firm Green Street Advisors LLC.”

That has made mortgage financing — necessary for most buyers — an increasingly common no-go for home sellers. To solve for this, Ribbon wants to give every consumer the leverage of an all-cash offer while eliminating the mortgage contingency in home buying.

Ribbon’s app allows home buyers to find houses and determine Ribbon Offer prices (Photo from Ribbon)

When purchasing a home, buyers who need mortgage financing will include a clause in the home purchase contract stating that if they are unable to get a mortgage in time for closing, they are able to walk away from a deal, generally without financial penalty. This is known as a mortgage contingency.

That clause puts sellers in a bind: move forward with such a buyer, and their creditworthiness will determine whether a transaction is completed. Yet, sellers don’t really know their buyers, and they have very little visibility into a buyer’s ability to get a mortgage. Pre-approved mortgages help here, when they are available, but are a poor substitute for cash.

Ribbon takes on home buyers as clients and assesses their likelihood of securing a mortgage using data science. If convinced that a buyer will get a mortgage, it then offers a Ribbon guarantee to the seller that if financing falls through, it will offer the cash needed to close the transaction.

“We guarantee a close and we guarantee a move in,” explained Shah, who is CEO. He emphasized that “we are not just providing a cash offer, but a guarantee to close … which creates certainty in the real estate process.”

One of Ribbon’s early purchases was this home (Photo from Ribbon)

Ribbon is free for buyers, and the company charges a 1.95 percent fee at closing from sellers. It is not uncommon for home sellers to discount their home price for all-cash offers due to the greater certainty of close, and Ribbon believes the same pattern will hold true for its Ribbon Offer. “Our view is that if discounts are going to exist because of the cash guarantee … let that discount flow through to the consumer ecosystem,” Shah explained.

If a mortgage falls through at the last minute, Ribbon will buy the home and wait for the buyer to secure a different mortgage. That process can sometimes be just a few days, which means that Ribbon doesn’t need to hold substantial housing inventory or take on macroeconomic risk, and can turn over its debt quite rapidly.

The company launched in Charlotte, North Carolina and has been in the market for about six months. Shah said that the company “tripled” transaction volume from Q2 to Q3, although demurred on deeper details of the company’s revenues. Charlotte was chosen both because home prices are cheaper than in major global cities like New York City and San Francisco, and because the percentage of cash offers locally has hovered slightly above one-third in recent years, according to company data, due to a surge in corporate buying.

Ribbon wants to be “Switzerland” according to Shah, which means working with existing realtors and existing mortgage lenders in a neutral and non-competitive way. He doesn’t see a world in which the company would offer its own mortgage products (at least, not yet), and instead wants to focus on perfecting the data models that underwrite its guarantee.

Home buying startups have been heavily financed by venture capitalists, including Opendoor, which has raised $1 billion, and others like Perch and Knock. Shah says that his competitors primarily focus on sellers rather than buyers, and Ribbon wants to do the opposite.

The company intends to expand to 10 new markets in the coming year, and has already grown organically through realtor referrals to expand to Asheville and Cary, North Carolina.

Rentlogic lands millions to grade NYC real estate for renters and landlords

A company called Rentlogic has raised $2.4 million to take the guesswork out of determining whether that cheap, beautiful New York apartment is actually a deathtrap wrapped in a brownstone’s clothing.

Renting in New York is murder already, but using Rentlogic, apartment hunters can figure out if their new housing situation could actually kill them (or put them at significant risk of bodily or property harm… or even minor inconveniences).

Investors in the company’s seed round include the Urban-X accelerator (which is a partnership between Urban.US and Mini); Urban.Us, an investor in urban technologies; the millennial-entrepreneur-focused investment firm, Kairos; and Seagram beverage company scion Edgar Bronfman, Jr.

Rentlogic already provides a grade for every building in New York — more than 1 million properties — but has added an inspection feature that it charges landlords for so that they can display a rating outside of their building. It’s like the city’s scoring grades for restaurants in neighborhoods.

“We grade every single property in New York,” says Yale Fox, the company’s founder and chief executive. “We have inspected 103 properties. Everybody is really happy with it and everybody is going to re-sign and we’re going to start scaling this out to every property in New York.”

Rentlogic scores buildings on a combination of around 150 different variables, including the ability to provide continuous heat and hot water, and whether or not a building has evidence of bed bugs or rodents.

The looks of the building doesn’t matter, Fox says. It’s more about the conditions of the building.

“It’s the same way a building would get LEED-certified,” says Fox. “It’s a good way for one landlord to differentiate their property as higher quality than a competitor’s in the same neighborhood.”

Launched initially in 2013, Rentlogic was born out of Fox’s own tragic experience as a new renter in New York. The Canadian transplant (and the son of a family of real estate professionals and small scale landlords) had come to the city for a new job and was looking at an apartment in the West Village.

After shelling out a $12,000 deposit for first month’s rent, last month’s rent and a security deposit, Fox settled into his abode in the tree-lined luxury of one of Manhattan’s most sought-after neighborhoods. The love affair with the building didn’t last long.

Unexpectedly, Fox started to become sick. Several visits to the doctor couldn’t identify a cause for his illness, until, finally, his physician suggested a mold-related illness.

“I asked the landlord to fix it and I wound up having to take the landlord to court,” says Fox.

By the time the court date arrived, Fox had paid to fix the mold problem himself and had little in the way of solid evidence to show a judge. So he built an app that would track the public complaints filed against the landlord and the public assessments that had been done on the building.

“I went to court and I showed the judge this model that I had put together and he said, ‘Welcome to New York and I’m sorry this happened to you… and you should definitely build an app, because New York City needs this.’”

Rentlogic founder Yale Fox

Fox, already enrolled in the TED Fellows program, built the app, initially called “RentCheck” and began marketing it to landlords and renters. “It was just a hobby because I was so angry about how things had happened to me,” says Fox. “We didn’t want to charge renters fees to the site. We thought having equal access to information could prevent this from happening in the future.”

Things continued as a nonprofit for a while until last year Fox hit on a business model. He designed a ratings card for the building based on the data his company had collected and showed it to his current landlord. “She said, ‘How much would you charge for it?’” Fox recalled.

Thus RentCheck became Rentlogic and a business was born. Fox charges landlords for assessments and to display a ratings placard that indicates the building’s grade.

Renters are willing to pay up to an additional $45 per month, according to a white paper, to sign a lease in a building that’s been independently certified. “People are willing to pay a little bit more just to not deal with the constant headaches that happen in certain kinds of buildings,” he said.

Fox appears to have launched Rentlogic at the right time. The market for housing in New York has softened as luxury apartments flood the market and demand softens, meaning that rents are coming down across the board.

But beyond being more competitive there’s a defensive aspect to getting rated in a market filled with demanding, complaint-prone consumers that have no qualms savaging any business, from landlords to local restaurants (although oftentimes the landlords and restaurants deserve it).

“A lot of times landlords are purchasing this because there’s no way to prove they’re not a one-star landlord,” Fox says. “This is accessible for big landlords and small landlords. In a zero-transparency and low-accountability marketplace, there’s no incentive for bad actors to improve their behavior, but with Rentlogic there is.”

The company is already making institutional moves. Fox has inked a deal with Blackstone about providing ratings for their $5.5 billion Stuyvesant Town acquisition on the Lower East Side, according to Fox. In addition, the company has partnered with a number of real estate brokers and roommate-hunting services like Nooklyn and Roomi to use its ratings.

While Rentlogic is scrupulous about using data to train its algorithm, it’s also transparent about how the algorithm works, according to Fox.

“Algorithms control so much what’s going on in the world and people just don’t understand them,” he says. So in the interest of full transparency, the company is putting together a building simulator where users can add problems and see how it affects a building’s rating on the Rentlogic site. The company also has an algorithmic review committee that reviews the results coming from the building assessments.

And while Rentlogic is starting in New York, the company has plans to use its machine learning system to hoover up publicly available data and provide grades for real estate across the United States.

Ultimately, Fox just wants to help improve the tenant-landlord relationship, he says. “I was in a terrible situation with a landlord who went to jail… I launched this site so no one would have to go through what I went through.”