TestFit Inc. has become the latest entrant in the fast-growing real estate and construction technology market to attract significant financing.
The Dallas-based company today announced a $20 million Series A funding round to develop its real estate feasibility software. That brings total funding for the six-year-old venture to $22 million.
TestFit’s building configurator helps real estate developers, architects and others involved in real estate planning to quickly generate plans for basic structures such as multi-family, commercial and industrial buildings. As a result, feasibility studies can be carried out more quickly.
Co-founder and Chief Executive Clifton Harness said he got the idea for the application while working in real estate development. “As an architect, I hated drawing parking lots by hand and I thought the industry spent millions every year on that one task,” he said. He noted that architecture, engineering construction and real estate teams are typically not very integrated, saying, “our goal is to make the process more collaborative.”
Go/no-go decision
Commodity buildings are evaluated according to formula metrics such as return on investment, Harness said. “The more profitable it is, the more likely it is to be built,” he said. “Our technology is designed to help design, construction and sales teams understand a project from every possible angle. Now this is mainly done with paper and e-mail.”
TestFit’s technology can take into account elements such as the size of a parking stall or kitchen and build algorithms that predict capacity and fit. “They enable the generation of a building design in five seconds compared to two weeks and optimized around things like number of units or square feet.”
The software is not used for design but for feasibility analysis. “Once there’s a site, we can generate the spatial layout,” Harness said. “We don’t know if it will last. We will check pro forma whether it is worth building.”
TestFit has brought in about 200 commercial customers with just the initial $2 million round of funding. The company plans to use the new funds to extend the product’s functionality to include property management, construction planning and design technologies in a single platform and expand into sectors other than housing.
thriving market
Real estate development has been a booming market in recent years, especially for multi-family and light industrial properties. CBRE Group Inc. estimates that multi-family investment in the US will hit a record in 2021 and surpass that figure this year with total production of about 300,000 units, which is still 200,000 short of demand. The company also anticipates that the demand for warehouse and logistics space needed to meet the proliferation of e-commerce is expected to exceed 300 million square feet per year in the coming years.
Seed-round investor Parkway Venture Capital LLC led the financing. The company specializes in simulation and artificial intelligence technologies. Managing Partner Jesse Coors-Blankenship previously founded Frustum Inc. op, an early developer of computer-aided design software based on generative design, in which artificial intelligence algorithms generate hundreds of models for evaluation. Managing Partner Gregg Hill served on the board of Frustum, which was sold to PTC Inc in 2018. for $70 million.
Hill called TestFit a “disruptor,” noting that its approach “allows teams to quickly end bad real estate deals.”
Image: TestFit
Show your support for our mission by joining our Cube Club and Cube Event Community of experts. Join the community that includes Amazon Web Services and Amazon.com CEO Andy Jassy, Dell Technologies Founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more celebrities and experts.
.