The use of technology is reshaping the construction industry today just as the introduction of specialized tools did in the past. With so many variables and moving parts in a typical construction, there’s always a risk for delays and these delays can be costly. Swapp is the AI-powered software solution that provides a centralized platform designed for the construction industry to create, manage and refine an end-to-end construction plan as circumstances change. Typical planning for a project can take anywhere between 9 months to a year; Swapp brings this down to a month. One may think that with the pandemic, the construction business would be slow. In fact, it’s been quite the opposite as the drive to automation and AI has led to a 5x increase in inbound interest from developers and contractors that now need to get planning done remotely and manage all those moving parts.
London TechWatch caught up with CEO, Cofounder, and serial entrepreneur Eitan Tsarfati to learn more about how his work at Autodesk Israel inspired this venture, the company’s future plans, latest round of funding, and much, much more.
Who were your investors and how much did you raise?
We raised a $7 million seed round led by Point72 Ventures and Entrée Capital.
Tell us about your product or service.
Swapp is an AI-powered planning company that uses a single-platform for real-estate developers and construction companies to create their entire construction planning, from feasibility assessments and a selection of algorithmically generated planning sets to detailed construction documents plans. Our technology streamlines the entire construction planning phase, which usually takes between 9-12 months, significantly reducing the planning time so work can begin within weeks instead of long months – and even a year.
What inspired the start of Swapp?
Already as a trainee architect, I recognized how flawed, long, and inflexible the construction planning process is. This frustration resurfaced when I learned how disconnected the planning, construction-operations, and operation phases are, when I studied business management at Harvard Business school.
It was then when I turned to technology to find a solution to these problems and formed my first startup which was later acquired by Autodesk, known for its flagship product “Homestyler”, an online home design software, where users can create their home designs in 2D and 3D.
When I became Autodesk Israel’s CEO, I spearheaded the company’s technological developments with the help of Adi Shavit, a leading AI and ML algorithm developer and international speaker. While working with Adi, we realized that creating more tools for architects and planners would not solve the biggest challenges the construction industry is facing, like reducing time wasted on repetitive tasks, high fragmentation, and poor coordination between planners and builders, and lack of data transparency.
We then teamed up with Noam Gat, a big-data expert, 3D programmer, and a serial entrepreneur on his own right, to create a real change in the field. To do that, we established Swapp, the world’s first AI-based construction-planning company that offers an end-to-end planning service through its cloud-based platform.
Our aim was to streamline the entire construction planning phase from automatic design options, financial estimations, detailed construction documents, and more – to allow real estate developers and construction companies to begin construction within weeks rather than long months or even years.
Today, our system is able to create an entire, detailed construction plan in 4-6 weeks, which using traditional methods would take at least 9-12 months. In addition, our data-driven platform is optimizing the results for construction costs and marketability considerations.
How is it different?
The construction value chain includes many different startups and companies who provide solutions for the “pre-design” phase, which takes place before the construction-planning begins and does not cover building code and regulation, and detailed construction drawings.
These companies, which we deeply respect, developed tools for architects and urban designers. Swapp’s solution is not a tool for architects but it works directly with real estate developers and construction companies to offer a complete end-to-end planning service. This service includes an advanced AI-powered platform that generates planning documents and drawings, and allows real estate developers and construction companies to directly control every step of the planning process from acquisition of a site to the moment construction work begins.
What market you are targeting and how big is it?
We target the commercial and residential markets for both ground-up and renovation projects in the US and major countries in Europe, with the UK as a key market. The US alone is estimated at $60B+.
What’s your business model?
Our revenue comes from both planning fees and SaaS usage-based billing.
How has COVID-19 impacted your business?
The pandemic has certainly accelerated the use of AI and automation of workflows. We saw a 500% increase in real estate developers and construction companies who have contacted us since last March.
Before the pandemic, construction planning services were perceived as local projects. The COVID-19 pandemic, which has seen many businesses shifting to remote work, proved that it really does not matter where your architect sits, either across the street or in a different country. Many of these companies have realized that not only can the planning phase be done remotely, but an automated platform like Swapp’s can significantly shorten the planning process, making it more efficient.
Before the pandemic, construction planning services were perceived as local projects. The COVID-19 pandemic, which has seen many businesses shifting to remote work, proved that it really does not matter where your architect sits, either across the street or in a different country. Many of these companies have realized that not only can the planning phase be done remotely, but an automated platform like Swapp’s can significantly shorten the planning process, making it more efficient.
Another phenomenon that stood out was the change in office lease prices. For example, in cities like London, New York, and San Francisco, companies with empty offices, started subleasing part or all of them, sometimes in 30% and 40% off the market price, placing even more pressure on landlords to cut rent. These landlords approached Swapp to re-plan their spaces and create economically sustainable designs that match today’s needs. In some instances, our system results advised to re-purpose the commercial spaces for residential use.
What was the funding process like?
Many prospective investors reached out to us in an oversubscribed round and sadly we could not include all of them.
What are the biggest challenges that you faced while raising capital?
Since my cofounders, like myself, are all serial entrepreneurs, we had the experience and know-how to find a product-market fit before we began the round. I am happy to say that we have not faced any significant challenges so far.
What factors about your business led your investors to write the check?
Our investors were looking for innovative technologies that will transform the construction industry. They were easily convinced once they saw the level of our product, of the highest standards which we created in less than a year. They were also impressed by the fact that the KPIs were clear from the very start and had a clear plan of how we intend to achieve them.
What are the milestones you plan to achieve in the next six months?
We plan to expand our AI capabilities and expand our customer growth mainly in the UK and US.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
Start developing even with little or no funding. Listen to your customers to develop a product-market fit with clear KPIs.
Where do you see the company going now over the near term?
Swapp’s vision is to make construction planning much faster, more efficient, and smarter – these 3 building blocks will present a significant change in the industry and redefine planning and construction in a way that was never done before.
Since day one, we have set a clear plan. We have invested a great deal of time into developing a strong team, a sound business model, cutting-edge technology, and our own proprietary algorithms – all under a bold vision to transform the entire industry. As a successful serial entrepreneur, I am confident that we are on the right path to becoming a unicorn in the next few years.
Swapp’s vision is to make construction planning much faster, more efficient, and smarter – these 3 building blocks will present a significant change in the industry and redefine planning and construction in a way that was never done before.
Since day one, we have set a clear plan. We have invested a great deal of time into developing a strong team, a sound business model, cutting-edge technology, and our own proprietary algorithms – all under a bold vision to transform the entire industry. As a successful serial entrepreneur, I am confident that we are on the right path to become a unicorn in the next few years
What is your favourite restaurant in London?
My favourite restaurant has to be the Coal Office as it’s a place that incorporates two things I love – innovative design and Middle Eastern cuisine. I am really looking forward to dining there again once we return to normality.