Construction tech startup CoFi lands $7 million in seed funding to secure the best construction financing for builders
The global construction industry is expected to reach an estimated $10.5 trillion by 2023. With the recently approved US Senate’s approved $1.2 trillion infrastructure bill, the construction industry is going to see the inflow of billions of dollars in additional spending, thereby pushing the industry to a new height. However, contractors and builders in the construction industry face a major challenge–getting funding to start off the projects.
Enter CoFi, a Salt Lake City-based construction tech startup that empowers contractors to get project funding backed by on-demand payments. By engaging multiple partner lenders, CoFi can ensure the best rates and terms for construction loans. Using CoFi allows both builders and developers to seamlessly streamline cash to the job site so everyone gets paid fast.
Today, CoFi announced it has raised $7 million in seed funding to deliver the best construction financing experience from more lenders to more customers across the country. The round was led by Blackhorn Ventures, Metaprop, and Tenacity,
CoFi will also use the fresh capital infusion to process billions of dollars in active loan requests nationwide. With the new funding, CoFi will help builders address the country’s housing supply crisis, first by getting projects financed faster and second by getting subcontractors paid in as little as four days – a huge improvement from the 74 days they might have to wait without CoFi.
Founded in 2018 by Mike Lacey and Cam Harris,CoFi offers builders a much better experience by engaging multiple partner lenders in a hand-picked, strategically grown lender pool, CoFi can ensure the best rates and terms for construction loans. CoFi is the only construction loan marketplace with lenders that specialize in acquisition, development, and vertical construction so builders can spend their time focusing on what they do best: building.
“America is facing a housing crisis unlike any other, which has created an even greater urgency for the construction financing process to run as efficiently as possible,” said Dr. Raymond Levitt, operating partner at Blackhorn Ventures. “CoFi is accelerating financing for both builders and developers from start to finish – something many of their peers have struggled to do at scale. It’s thrilling to see how quickly CoFi has been able to match builders with lenders – even in new markets – and the sheer volume of financing they’re helping to place. This advancement will help propel the construction industry forward at a critical time.”
Construction technology funding reached a whopping $2.1 billion last year – a 100% increase over 2020. What’s more, the construction industry represents 6.3% of the U.S. GDP, with millions of contractors and workers on job sites every single day.
“CoFi is at the junction of construction and fintech, which creates incredible growth potential,” said Ben Narasin, founder & general partner of Tenacity Venture Capital. “There’s competition in both industries, but CoFi is the only company doing both a lending marketplace and industry-specific SaaS payment software. With billions of dollars in loans through their platform in under a year, the opportunity is unbounded.”
CoFi co-founders Mike Lacey and Cam Harris were some of those contractors and developers, and after years of frustration with the process, they decided to do something about it. CoFi was created to turn the manual, time-intensive financing process into one that’s on-demand, fast, easy and transparent.
Construction has one of the highest failure rates of any industry, and the number one cause is slow payments. Subcontractors and suppliers live on cash flow and getting them paid fast gives builders leverage, loyalty, and sets them apart in the industry. By providing an in-house, networked inspection strategy, CoFi allows builders to seamlessly streamline cash to the job site so everyone can get paid quickly.
“At CoFi, we go to bat for our builders and developers. We’ve seen firsthand how frustrating it can be to spend precious time and energy applying for loans and jumping through legal hoops to get our teams paid quickly,” said Mike Lacey, co-founder of CoFi. “We built CoFi into the kind of tool I wish I’d had as a builder – one where we’ve replaced sending inspectors out to a job site with tech-driven remote inspections to capture project progress and allow developers to sign off on the distribution of funds. This flexible payment schedule wildly improves upon the industry standard of a 74-day pay cycle, and it can mean all the difference for a builder who might otherwise lose good workers because they can’t get paid quickly enough.”