Raken Aims for Growth in Mobile App for Construction Site Reporting

When it comes to disrupting an industry, Raken founder and CEO Kyle Slager says it would be hard to find a sector that is more resistant to spending money on new technologies than the construction business. As Slager puts it, even bankers and insurers spend more on technology as a percentage of revenue than building contractors.

But Slager says that’s starting to change as construction companies realize that technology isn’t just an expense; it can represent an investment in money-saving efficiencies. In a recent interview with Xconomy, he said, “We’re seeing this tidal wave that just wasn’t there before.”

After testing his ideas in the building industry for a couple years, Slager started Raken near San Diego in 2014 to create a mobile-first, cloud-based app to replace desktop software used as a workflow management tool on construction projects. In the construction business, he says only about 10 percent of the workforce spends much time behind a desk.

Raken’s mobile app enables project foremen, construction site supervisors, and others to use their smartphones to track material deliveries, sub-contractors’ progress, and other activities that go into the daily reporting on a job site. Raken also enables user groups on a project to share photos, task lists, and weather forecasts, and even to document safety issues and job site accidents.

Slager, 36, said he started thinking about developing cloud-based software that could replace a hodge-podge of disparate systems when he was developing software for Acacia Living, a Scottsdale, AZ-based health and wellness firm catering to the elderly. Before that, Slager worked as a research associate in the investment group at Brandes Investment Partners, a San Diego advisory and money management firm.

After landing Raken’s first customer in 2014, Slager says the Web-based business has grown to just over 2,500 paying customers in 30 countries. Count the customers on Raken’s free introductory “starter” plan, and the number would be about 55,000, according to the company.

In the United States, paying customers includes New York-based Turner Construction, Colorado’s Hensel Phelps Construction, and San Diego’s Davis Reed and Swinerton Builders. In downtown San Francisco, Raken’s software was used by contractors building the new Salesforce office tower. In Atlanta, project managers used Raken to help manage construction of the new $1.6 billion Mercedes-Benz Stadium, which opened earlier this year for the Atlanta Falcons and Atlanta United soccer team.

Since Slager joined forces with Sergey Sundukovskiy in late 2015, he says Raken has tripled the size of its workforce, to 40 people. By next year, Slager says he expects that number will double.

Sundukovskiy, who holds multiple degrees in computer science, organizational management, and data science, initially joined on an advisory basis, and helped Raken make its technology more scalable and robust, Slager said. At the time, Sundukovskiy was head of engineering technology innovation at CapitalOne (the bank holding company acquired his first startup). Sundukovskiy also was working as a mentor at several accelerators, including the Google Launchpad Accelerator, 500 Startups, The Founder’s Institute, and San Diego’s EvoNexus and Startup San Diego.

“I was meeting with a lot of entrepreneurs in Northern California and Southern California,” Sundukovskiy recalled. “I approached Raken as an investor would. I’m looking at the problem and saying there’s a better way, and how do we get that better way into the hands of people? It starts with customer relationship management, and understanding whether you’re focused on a real problem, whether your innovation is a painkiller or a vitamin, and is the solution sustainable? That was the aspect I looked at.”

By the end of 2016, Sundukovskiy had signed on as a co-founder and Raken’s full-time CTO. At about the same time, Raken also raised a $2 million seed round from Rincon Venture Partners, Eniac Ventures, and Spider Capital. As we noted last year, when Raken was named an Xconomy San Diego tech company to watch in 2017, the company also has raised capital from angel investors.

Now, after a year working full-time at Raken, Sundukovskiy says the nature of Raken’s growth is more typical of a business-to-consumer Web business than a business-to-business model, i.e. the contractors that make up Raken’s target market. “If we didn’t do anything at all, we’d still be growing,” he said. Nevertheless, Slager and Sundukovskiy are laying plans to drive Raken’s growth, beginning with raising additional capital through a follow-on growth round early next year.

Slager and Sundukovskiy maintain that their chief competitor is the pen and paper that jobsite supervisors are currently using on paper spreadsheets and printed documents to track deliveries and other daily reporting tasks. But in fact a number of rivals have developed mobile apps for managing various aspects of construction workflow, including San Diego-based eSub Construction Software (which raised $5 million last December), JobFlex, e-Builder, and Autodesk BIM360.

Beyond that, Sundukovskiy sees opportunities for Raken as a primary source of business intelligence for all the personnel at general contractors overseeing a project, including owners, project managers, project engineers, and others. Once data gets generated from the daily reporting done for a particular job site, Sundukovskiy wants to apply analytics that could highlight underlying trends and potential problems before the information gets distributed. “This is what Raken is trying to become,” he says. “A field management company driven by data.”

Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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