- Interview with Eliot Hastie of Startup Daily, Aus Biz.
- Varicon expands in Australia following $2.25M funding led by Black Nova VC.
- CEO and co-founder James Baker tells us how Varicon’s software platform will help civil construction firms save billions through cloud-native cost management and real-time analytics.
James Baker was interviewed by Eliot Hastie to talk about Varicon’s recent seed round and how our cost management platform will help civil construction firms save billions. The interview can be watched below.
Eliot: Now construction tech platform, Varicon has closed over 2 million seed round for its construction cost management software. The platform helps address the problems of misquoting and mismanaged spending in construction budgets. And to tell us more, we’re joined now by CEO, James Baker. James, thank you for joining us here in the program. Look, congratulations on the raise. Let’s start with where the funds will be used to help power the platform forward.
James: Yeah. Yeah. Good day, Eliot. Thanks for having me on the show. So where we’re gonna be using this money is mostly in three areas. First is to build up our product team so that we can continue to innovate and provide new functions to our customers. The second is around sales and marketing, and then the third area is around customer success. Cause we really invest in making sure that this is the easiest, most streamlined experience for our customers.
Eliot: Let’s take a step back and look at the history of the platform. You know, you sort of worked in the industry, didn’t you, and you sort of saw these problems come up a lot and there wasn’t really anything to sort of help fix it.
James: Yeah, that’s exactly right, Eliot, so to start with, we didn’t have this grand vision of transforming the way that construction costs were managed. I was in the industry working as a project manager and I was just simply looking for some tools to help deal with my problems, which was that very frontline managing my costs.
James: And through that process, I realised that it just didn’t exist. And so that led me on to doing a bit of exploring and talking to people in the industry. And one of these companies that we spoke to was Delta Group, who are the largest demolition contractor in Australia. And they come to the same conclusion after two years that there just wasn’t anything in the market. And they said to us, look, if you can build this, then we’ll fund you to do it. And that’s really how Varicon came to be.
Eliot: So, you know, in terms of that, what sort of oversight does the platform enable to project managers when they’re taking a look at a budget? .
James: So really the problem that we are addressing is that construction sites are very busy. They’ve got a mixture of their own people and equipment and supplies and subcontractors coming and going. So it’s a really hectic environment. And just keeping on top of all those costs is a huge burden on the people on site. And so what we are doing is through the use of mobile devices, making this just a really simple process for these people on site, which means that management teams can see in real time all of their committed costs before those numbers actually hit their books.
Eliot: And are there any other competitors in this space, James? Or are you really one of the first in the industry of which I can imagine that there is a potential to grow even beyond construction because I’m sure mismanaged budgets and misquoting is not just unique to the construction industry.
James: Yeah, absolutely. Look, it’s a problem that’s existed for the construction industry for forever. I’d say that really our biggest competitor in the market is Excel spreadsheets. So that’s what the majority of companies are using today. There are a series of what we call construction ERP systems that are really built around the management experience, but they just don’t solve that problem for the field based worker. So we are really filling that gap in the market.
Eliot: And are you working with some of the bigger construction businesses to sort of ingrain this into their suite of products that they do use to sort of really try and take over the Excel spreadsheet? Cause I guess the disadvantage of having it on spreadsheets is that you gotta be able to read the spreadsheet, but also you gotta find it.
James: That’s exactly right. And the problem that our customers face, I mean, we have customers ranging from 10 million to 700 million plus turnover. That they have all this information, but when you need it, it’s hard to find it. And what they really need is these real time insights to alert them that there’s actually an issue happening and Excel just can’t do that.
Eliot: Now look, you’re a veteran construction project manager. How different was being a construction project manager to starting a startup?
James: Oh, look, I’m sure that a lot of the startup founders that have spoken to you have told you how challenging a journey this is. I think as a construction project manager, it was very clear what my job was. So I had to deliver my projects on time, on budget and to the right quality. But then with a startup, you just don’t have that roadmap. We are having to build it as we go. And then throw on top of that dealing with COVID and all the stuff that we’ve gone through over the last 18 months. Very different game.
Eliot: And to that end, then I guess, James, what was one of the biggest lessons you learned from that?
James: The biggest lesson that I learnt is that as a startup founder, you need to surround yourself with really good people. For me, this is my first startup. So it’s all new to me, but there are a lot of people in the construction, in the startup ecosystem that have been through this many times before and have mentored people through it. So I think finding the right investors and the right advisors to surround you is just absolutely critical to succeeding in the long term.
Eliot: Well, James, thank you so much for joining us. Good luck with Varicon. I’m sure we’ll be joining you as you continue to raise money and build out the platform.
James: Great. Thanks for having me on the show Eliot.