This is Runway by Whitepaper, a weekly newsletter covering Latin America’s vibrant startups shaping tomorrow’s business landscape. If you haven’t subscribed, do so to get this content directly in your inbox:
In 2022, Mexico's construction industry decelerated by 15%. However, this year, it’s anticipated to recover fully, with construction companies benefitting from outside investment in the residential and industrial sectors.
Let's dive in.
- You work as a purchasing agent at a construction company.
- Every day, you check in with dozens of suppliers for the latest quotes and the status of your orders.
- Scarcity of materials is common. You have to check with several distributors to see availability and pricing.
- Often, you need to find new suppliers to meet your company’s demands.
- With the help of an online platform that has thousands of construction suppliers where you can quote, your job is much easier.
Explain it like I'm five
Sourcing materials is a significant challenge in the construction industry, stemming from limited supplier information and the difficulty of guaranteeing material quality. This lack of transparency and predictability complicates procurement, affecting project timelines and budgets.
- With Construex, suppliers can upload their full product catalog online.
- Buyers can easily quote from various suppliers in one place.
- Construex withholds payment to the supplier until they have successfully delivered the order.
According to Forbes, construction companies in Mexico have been slow to digitalize; only around 20% have adopted technology to automate processes and simplify their daily operations. With an estimated value of $185 billion dollars, there is room for entrepreneurs to digitize and simplify processes in the industry.
Construex is a B2B marketplace that connects construction businesses with materials and home decor suppliers.
- Industries: Construction, marketplace
- Headquarters: Quito, Ecuador
- Operations Started: 2019
- Team Size: 50
- Raised: $4.6 million dollars
- Investors: Zacua Ventures, Fifth Wall, ABSeed & Terracotta Ventures
- Business Model: B2B, transactions fees on orders
What we like:
- Profitable: Founders told us they achieved profitability early on. As they began to recognize the demand for their platform in neighboring countries, they understood the need for additional capital to fuel their expansion.
- Growth: Having successfully established a strong presence in Ecuador, Chile, Argentina, Bolivia, and Guatemala, Contruex is poised for further growth in Mexico, which has the largest construction market in Latin America. It already has over 150 active clients.
- Digital: Suppliers can display their full product catalog on Construex, making it easier for companies to add a digital sales channel. Their approach also reduces suppliers’ need for additional investment in digital infrastructure.
- Offering: Originally focusing on construction materials, Contruex realized that home decor suppliers were facing similar issues—leading to their inclusion on the platform. As a result, Contruex claims a network of over 74,689 suppliers in Mexico and 137,350 across Latin America.
- Markets: Every Latin American country operates business differently. One of the challenges Construex founders are facing is understanding the needs of each of their clients and suppliers and then adapting the platform to the needs of each country.
- Bypassing: Construex’s revenue is generated through transaction fees applied to orders made on their platform. Some businesses may bypass Construex and directly engage with suppliers to avoid these fees, as buyers have direct contact on orders with suppliers.
- Adoption: Even with the growing popularity of online marketplaces, convincing traditional suppliers and businesses to join in can be tough. These businesses are used to their usual way of doing things and might be hesitant to switch to an online platform. Construex also needs to reach out to both suppliers and customers to make it work.
- Roberto Arroyo, Co-Founder & CEO.
- Nicolás Arroyo, Co-Founder & COO.
- Carolina Arroyo, Co-Founder & CSO.
- Sven Gloor, Co-Founder & CMO.
Request intro with founders by sending an email to firstname.lastname@example.org
- Hey, a Mexican neobank will be splitting from Banregio to operate independently (Expansion).
- Owner.com, a startup helping restaurants manage their online presence, raised $33 million dollars in funding (Techcrunch).
- Yume, a startup helping manufacturers turn potential food waste into money, raised $1.3 million dollars in funding (Capitalbrief).
- Kore.ai, a startup building conversational AI for enterprises, raised $150 million dollars in funding (Techcrunch).
The best tools and resources we came across this week.
- A framework to make better hires.
- The story of Airbnb by Paul Graham.
- Why consumer brands may grow in the next few years.
Building in latam? Send us your pitch deck for the opportunity to be featured in Runway.
Runway´s Job Board
- Somos Foods: An authentic Mexican food company spicing things up in the US market is looking for a talented SENIOR ACCOUNTANT to join their Monterrey team. Ready to join the flavor revolution? Apply here.