Can AI Rebuild Efficiency in European Construction?

Imagine a world where construction projects are completed on time, within budget, and with minimal errors. That's the vision of Scalera, a Zurich-based ConstructionTech startup that’s just secured €5.7 million in Seed funding to revolutionize public construction procurement. This injection of capital, led by firstminute capital and Speedinvest, marks a significant step forward for Scalera’s mission to “get Europe building again.”

Scalera's Ambitious Mission: Modernizing Construction with AI

Founded in 2023 as an ETH Zürich spin-off by Leonardo Reinhard, Sven Affeltranger, and Federico Gossi, Scalera is tackling a massive problem: the antiquated and inefficient processes that plague the construction industry's procurement landscape. Governments worldwide spend a staggering €11.5 trillion annually on procurement, with the EU alone allocating approximately €1.7 trillion. Scalera believes that AI can drastically improve how these funds are spent.

The Pain Points: A Construction Procurement Crisis

The current state of construction procurement is far from ideal. Manual processes, outdated systems, and mountains of paperwork lead to significant delays, errors, and increased costs. Suppliers and contractors alike face frustration navigating complex bidding procedures, often relying on time-consuming and error-prone methods.

• Time-Consuming Manual Processes: Sifting through thousands of pages of PDFs, manually copying data into spreadsheets, and coordinating with suppliers via email – all contribute to lengthy bidding cycles.
• Increased Risk of Errors: Manual data entry and coordination significantly increase the risk of errors, leading to costly mistakes and project delays.
• Lack of Transparency: Opaque procurement processes can hinder collaboration and create opportunities for inefficiencies and even corruption.
• Missed Opportunities: Smaller and more innovative companies may be excluded from the bidding process due to the complexity and administrative burden.

Leonardo Reinhard, CEO of Scalera, encapsulates the issue: “To win public tenders today, companies still comb through thousand-page PDFs, copy line items into Excel, and email suppliers one by one. We started Scalera to end that madness and get vital projects moving again — faster, more affordably, and with total transparency.”

Scalera's AI-Powered Solution: A Breath of Fresh Air

Scalera offers an AI-powered platform designed to automate the tendering and procurement process. The platform's key features and functionalities include:

• AI-Powered Parsing: Automatically extracts and analyzes data from construction documents, eliminating the need for manual data entry.
• Intelligent Matching: Matches suppliers and contractors based on their capabilities and project requirements, ensuring the right partners are connected.
• Streamlined Coordination: Facilitates seamless communication and collaboration between all stakeholders throughout the procurement process.

By automating these critical tasks, Scalera accelerates bidding cycles, reduces errors, and improves collaboration across the construction supply chain. The platform acts as a central hub, providing transparency and control over the entire procurement process.

Seed Funding: Fueling Growth and Expansion

The €5.7 million Seed funding round is a testament to the potential of Scalera's technology and its vision for the future of construction procurement. The round was led by firstminute capital and Speedinvest, with participation from strategic angel investors. This financial backing will enable Scalera to expand its team, further develop its platform, and accelerate its expansion into new markets.

Investor Perspectives

Sam Endacott, Partner at firstminute capital, shares his excitement: “Public procurement has always been a sector ripe for disruption and we believe Scalera are the team to do it. The combination of their product vision and unique access to data gives them an edge in a huge market.”

Andreas Schwarzenbrunner, Partner at Speedinvest, adds: “Governments worldwide spend an enormous amount of taxpayer money on construction projects every year. Scalera can ensure that these funds are deployed in the most efficient, transparent and collaborative way possible.”

Impact and Benefits: A Win-Win for All

The adoption of Scalera's platform promises a multitude of benefits for governments, builders, and the construction industry as a whole:

• Faster Bidding Cycles: Automating manual tasks significantly reduces the time required for bidding, enabling projects to get underway sooner.
• Reduced Errors: AI-powered data extraction and validation minimize the risk of errors, leading to more accurate bids and fewer costly mistakes.
• Improved Collaboration: The platform facilitates seamless communication and collaboration between all stakeholders, fostering a more transparent and efficient procurement process.
• Cost Savings: Streamlining the procurement process and reducing errors can lead to significant cost savings for governments and builders.
• Increased Transparency: Scalera's platform provides greater transparency into the procurement process, reducing the potential for corruption and inefficiencies.

Market Opportunity: A Trillion-Dollar Industry Ripe for Disruption

The construction procurement market represents a massive opportunity for disruption. With governments worldwide spending €11.5 trillion annually on procurement, even a small improvement in efficiency can translate into significant cost savings. Scalera is uniquely positioned to capitalize on this opportunity, given its innovative technology and its deep understanding of the construction industry.

Expansion Plans: Building a Pan-European Presence

Building upon its success in Switzerland, where it has processed over €2.1 billion in tenders and covers a significant portion of construction contractors, Scalera is now expanding into Germany and Austria. This expansion marks a crucial step towards Scalera's vision of transforming construction procurement across Europe.

The Team: Experts in AI and Construction

Scalera is led by a team of experienced entrepreneurs and technology experts. Leonardo Reinhard (CEO) brings a wealth of knowledge in business strategy and construction. Sven Affeltranger (CCO) focuses on customer relations and market development. Federico Gossi (CTO) leads the technical development of Scalera's AI-powered platform.

Actionable Takeaways: Embracing the Future of Construction

The story of Scalera highlights the importance of embracing AI in the construction industry. By automating manual processes and improving collaboration, AI has the potential to transform construction procurement and unlock significant benefits for governments, builders, and the public. Scalera's platform represents a significant step towards this future, offering a glimpse of what's possible when innovative technology is applied to solve real-world problems. The company's success demonstrates that investing in ConstructionTech can lead to increased efficiency, reduced costs, and a more sustainable future for the construction industry.