OMERS Ventures’ Principal Michelle Killoran has long been looking for a construction tech startup to invest in. The space is intriguing to her, but so far, she has not come across a company whose model has been compelling enough to convince her to pull out her checkbook.
Meanwhile, Jim Barrett, chief innovation officer at Turner Construction, was facing a similar challenge. There were many companies out there attempting to solve various problems within the construction industry, but not necessarily the ones his company was facing. For context, Turner is one of the largest contractors in the U.S. Founded in 1902, it notched a reported $14.4 billion in revenue in 2020. Toronto, Ontario-based OMERS Ventures is the VC arm of OMERS, the pension plan for Ontario’s municipal employees. Founded in 2011, the firm presently has about $1.6 billion in assets under management.
A few years ago, Killoran and Barrett were introduced to each other and worked together to evaluate various construction tech startups.
But early last year, in one of their regular meetings, a new idea — born out of their mutual frustration — came up.
The pair asked themselves why they just couldn’t engineer a successful software startup by designing and building one from scratch.
“We all knew the variables that contribute to success or failure — so we asked ourselves ‘why don’t we just control for them ourselves and put a program together that doesn’t guarantee success but dramatically improves probability that a company survives the early stages and matures into a dominant force in the contech software industry?’” Barrett said.
The result? An Entrepreneur-in-Residence program that would serve as an incubator for founders to prepare them to launch their new software companies.
Working together, OMERS and Turner decided they would select the candidates and then over a three- to six-month period, they’d use Turner “as an avenue to explore the opportunity landscape,” Barrett said.
“We would insert them inside Turner to go wherever they like and interview whomever they want, from our employees or our global network of clients, architects, engineers and subcontractors,” he added.
Barrett emphasizes that the program is not about building a software company that is “captive to Turner” or only solves its problems.
“We are simply a learning lab for the founders,” he told TC. “Ultimately, the goal over time is that we keep repeating this and this program becomes a foundry for successful startups that deliver superior technological solutions that delight customers, change our industry, and advance innovation.”
For OMERS’ Killoran, the opportunity to build a company alongside Turner seemed like the ideal way to counteract some of the major challenges that early-stage businesses in the construction tech space face.
In particular, Killoran sees “a massive opportunity” for technology to change the construction industry by improving productivity, streamlining regulatory processes, collaborating on design and making payments more predictable.
She added: “But there is a big challenge in this space — customer adoption. It is an industry steeped in tradition where paper still plays a significant role, and technology adoption is relatively low. Couple that with the fact that the construction industry is complex.”
The premise behind the new program, Barrett said, is that founders are the most important factor for the success of a startup. And that founder, Killoran said, does not necessarily have to have a background in construction. In fact, she considers a construction background a “nice to have,” rather than a “must have.”
“We can help EIR candidates get up to speed on the lay of the land in construction. There’s something to be said about coming into this with a clean set of eyes,” she told TC. “Experience in technology startups is more important…The most important criteria is an entrepreneurial spirit — someone who wants to dive into this space or who has a passion for automating workflows and making processes more efficient.”
