3 reasons why Flyer One Ventures invested in Field Materials

By Elena Mazhuha, partner at F1V

Startup Field Materials, which digitizes material procurement for construction companies, raised $8.15M in seed funding in June 2024.

Investors include Flyer One Ventures, DivcoWest Ventures, Navitas Capital, Zelda Ventures, Blumberg Capital, s16vc, and Zacua Ventures.

Several prominent angel investors also participated in the round, including former vice president of Home Depot, former senior vice president of Lowe’s, general manager of payments at Google, and co-founder of YouTube.

Here are three reasons why F1V invested in Field Materials (twice!).

Reason #1. Co-founders are serial entrepreneurs with exit to PayPal

Field Materials was co-founded in 2022 by Eldar Sadikov and Victor Gane — both successful second-time founders and Stanford alumni with outstanding corporate careers.

Sadikov is a software development expert with over 15 years of experience. Before Field Materials, he founded Jetlore, an AI prediction platform for e-commerce, which was acquired by PayPal in 2018. At Field Materials, he’s the CEO.

Gane has more than 15 years of expertise in developing consumer and enterprise software products. He also held senior roles at leading design and construction firms. At Field Materials, he’s the COO.

In 2012, he founded Remedly, a cloud-based ERP system for optimizing operations at medical clinics. According to CrunchBase, Remedly has raised a total of $10.4 million in funding across five rounds.

The co-founders perfectly complement each other’s expertise. They had been acquainted for more than a decade before launching Field Materials together.

Reason #2. A ‘painkiller’ AI platform saving costs and time for construction companies

To purchase building materials, tens of thousands of U.S. construction companies spend hours every day manually entering data. With Field Materials, they can save 90% of this time.

The startup builds an AI platform that helps contractors and vendors automate material procurement, equipment rentals, and other routine tasks such as accounting and invoicing. Its technology has been trained on tens of thousands of vendor quotes, invoices, and customer packing slips.

All these workflows are still mostly managed using Excel, phone calls, text messages, paper, or outdated systems that haven’t been updated since the 1980s. This often leads to miscommunication between contractors and suppliers, project setbacks, and cost overruns.

Field Materials’s web and mobile apps streamline cooperation and allow users to track deliveries. Contractors can also control their spending with the software: AI identifies vendor billing errors and saves 5-10% on project material costs.

The startup’s traction has been rapidly growing. In the first quarter of 2024, the company tripled its customer base, increased its annual recurring revenue eightfold, and more than doubled its total order volume.

Currently, the company provides its services in eight construction trades and integrates with the top eight software tools for accounting; it has partnered with multiple professional organizations.

Reason #3. Construction is huge industry lacking innovation and digitization

Construction is the second-largest global industry, estimated by McKinsey at $12T and expected to grow by 7% annually. However, it is second to last in digitization, with only agriculture lagging behind.

The industry has low margins and is currently facing increasing economic headwinds, including materials cost inflation. It’s becoming vital for construction companies to implement cost-saving tools and practices.

Meanwhile, the global construction tech software market is projected to reach $20B by 2025, growing at a CAGR of 14%.

Statista reports that building material and supplies dealer sales in the U.S. reached approximately $446B in 2022, nearly $40B more than the previous year. According to the U.S. Census Bureau, monthly sales have increased over 1.5 times in the past decade.

Given the market conditions, investors think tech startups can enhance operations in construction. In 2020–2022, they invested close to $50B in AEC (architecture, engineering, and construction) tech — it’s 85% more than in the previous three years.

For more trends, stats, and insights about the industry in 2024, read the F1V report on construction tech.

If you are an early-stage startup founder building a company that aligns with our investment thesis and seeking to raise funds, you can send your pitch F1V: Use our Typeform. Hope we can work together.

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