Launched in 2014 by CEO Chase Gilbert, the Nashville-based construction lending startup Built aims to improve the construction loan process for both residential and commercial construction. To that end, the company recently announced a $21M infusion of venture capital from San Francisco’s Index Ventures and Nyca out of New York City.
Built essentially serves as an online platform where all of the parties to the loan draw can collaborate and interact in real time. Construction loans, as you may know (and to which I can certainly attest after spending a couple of years fighting through a commercial mortgage lien foreclosure matter back in my law firm days!) are tricky. Funds are distributed by the lender in a series of draws as the project proceeds (as opposed to one wire for, say, funding a mortgage). They require review and input from the designer, the builder, and other parties who must make sure what’s being funded has actually been constructed in the field.
It’s a tedious and, historically, a mostly manual process, which Built’s product attacks by allowing builders to request reviews for each draw online and inspectors and others to file their reports and paperwork. Lenders, borrowers, builders, and inspectors each have their own specific user portal within Built, which provides them with an overview of a project’s financing and status in real time. So far, the company’s clients are lenders, 35 of whom have closed $6.5B in deals across the U.S. over the last two years through Built. The company makes money by charging lenders a fee for each loan, varying on the size of the bank and the loan.
“[Construction lending] is a trillion dollar industry that affects every single person in this country and yet it’s been extremely underserved by technology, specifically the way construction loans are managed,” Gilbert told The Tennessean in an article reporting on the investment. “We use modern technology to connect everyone involved in the construction process. Everyone can see what is happening at all points in time and can request funds to push the project forward in a much more safe and efficient manner.”
I think Built straddles an interesting intersection between construction and fintech, and I also think we’ll see other efforts that cross a similar line – perhaps insurance – in 2018, as investors and entrepreneurs continue to take aim at the construction industry using ideas and technologies from aligned sectors.
Index Ventures has also invested in Facebook, Etsy, Dropbox, and Slack, among other well-known tech startups.