SUMMARY
ProjectHero enables contractors to hire and manage construction workers across multiple categories like carpentry, shuttering, and masons, among others
Since its inception, the startup claims to have boarded 5,00,000 workers, 75,000 sub-contractors, and 25 general contractors
In the next two years, the founders are looking at lapping up sizable revenues in a market, which is anticipated to touch $1.4 Tn by 2025.
Despite being one of the largest construction markets in the world, the highly unorganised nature of the country’s construction sector continues to haunt all its stakeholders equally. This is because it is plagued with the dearth of skilled manpower at different stages of construction. The gap is huge and often leads to project delays or substandard quality of construction.
Facing similar hiccups in their operations, general contractors-turned-startup founders Satya Vyas, Pukhraj Grewal, and Raghu Chopra decided to address this at the onset of the pandemic.
The founders, who were working in the offline setup, found it difficult to get the right set of contractors and skilled workers for their projects.
“Whenever we used to get a project, it was difficult for us to know if we would be able to deploy the project on time because vendor-price discovery was a huge challenge for us,” Vyas said.
Determined to find an effective solution for many contractors like them, they connected with other general contractors to understand common concerns. Many of the general contractors were losing money because subcontractors were not able to execute projects properly due to capital-related issues and the dearth of manpower.
Hence, they finally zeroed in on the mother of all problems – where and how to find a skilled workforce in a highly unorganised and disconnected market efficiently.
It was then the trio decided to create an online platform that identifies the skill sets of construction workers and brings them under one roof, leading to the birth of ProjectHero, a construction workers marketplace, in 2021.
“We wanted to bring all the skilled stakeholders of the construction industry – workers, general contractors, sub-contractors – under a platform to combat the issue of finding them in a highly disorganised market, and, of course, help them fetch better deals in return,” Vyas said.
The cofounder said that the country’s construction market, which is the second largest employment generating sector, after agriculture, was awaiting a disruption for decades.
“We were quick to understand that quality contractors and skilled workers were working in silos in an overly unorganised setup, and, hence, were often difficult to tap,” he added.
Since its inception, the platform claims to have boarded 5,00,000 workers, 75,000 sub-contractors, and 25 general contractors. The impact of the disruption has been such that the platform is growing at a rate of 20% month-on-month in expanding its user base.
While they are aiming to formalise the construction industry, Vyas claimed to have seen a good response from subcontractors and workers until now. The rate of workers finding jobs and the contractors getting new orders is also growing significantly, the cofounder said.
ProjectHero raised $3.2 Mn (INR 25.5 Cr) in a seed funding round led by Ankur Capital and Omidyar Network India last year. To date, the startup has raised $3.6 Mn.
Not Just Another Cog In The Wheel
One may say that the platform competes with the likes of Bandhoo, Vahan and Goodworker in the gig worker and blue collar space; however, unlike these platforms, which manage the overall gig worker market, ProjectHero is solely focused on the construction sector, thereby differentiating it from other players.
There is a close competitor, Bandhu, a digital marketplace for workers, employers, landlords and middlemen, but it operates on a ‘much smaller scale’, according to Vyas.
Speaking about the addressable market for the platform, Vyas said that every year around $160-170 Bn is spent on hiring contractors and skilled workers. “We aim to have a chunk of this market.”
Well, if this is the case then the founders in the next two years could be looking at lapping up sizable revenues in a market, which according to data sourced from InvestIndia, is anticipated to touch $1.4 Tn by 2025.
The founders also have plans to foray into materials and financial services. “The audience we are targeting is completely excluded from the financial market and credit services. Lenders or financial insurers are not very comfortable underwriting the risk either in terms of lending or insurance to workers or contractors as the nature of work is risky and employment is not recorded,” Vyas said.
Hence the startup is planning to foray into the financial services sector in the next few months. However, it wants to venture into the category through partnerships initially. The startup may launch its own products soon.
The startup also offers a management software, which allows contractors to track workers’ attendance, generate daily wage reports and pay salaries online. At the same time, the platform also allows construction workers to track their salaries and avail fintech services such as insurance on a mobile app.
What’s In The Salt Mines?
The startup works on a membership-driven business model. Users join the network, create profiles and then get them verified. ProjectHero verifies the key skills of construction workers, and for subcontractors, it carries out a financial verification.
The revenue model of the startup is based on the subscriptions sold to workers and contractors. “We started monetising in November and we are running multiple experiments at different price points. For now, we have a one-tier subscription that is yearly. Currently, we are experimenting on a weekly basis to understand which price point suits our users the most,” Vyas said.
Since the launch of the subscription model, Vyas claims to have seen 2-2.5X growth in the number of subscribers on the platform every month.
The startup, which has so far raised a total of 3.6 Mn since its inception, has set some ambitious targets for itself in 2023 and beyond. The founders are trying to take the total number of workers on the platform to 1 Mn and the total number of contractors to 5,00,000 during the year. Further, their focus will remain on adding 40,000-50,000 paid subscribers on the platform.
Meanwhile, determined to solve the challenge of finding quality skilled workforce and contractors at competing rates, Vyas envisions making ProjectHero the largest professional network for the construction industry, putting the highly unorganised sector on a more efficient and organised route.
