Kitchener-Waterloo-based startup Dozr, which offers an online marketplace for heavy equipment rentals, has raised $27.5 million CAD in Series B funding.
The company’s all-equity round, which closed last month, was co-led by Silicon Valley’s Builders VC, and BDC Capital’s Growth Venture Co-Investment Fund, with participation from BaseCamp Equity Partners, which led Dozr’s $14 million Series A round in 2019.
“We’re just seeing a huge amount of growth in all of the [US] construction sectors … It makes a lot of sense to be in the United States.”
-Kevin Forestell, Dozr
According to Dozr, the startup’s Series B round consisted “mostly” of primary capital, but also involved “some secondary.” The company declined to disclose the exact breakdown to BetaKit, along with who sold shares as part of the round. The fresh capital brings Dozr’s total funding to $44 million.
With the funding, Dozr aims to build on its recent growth, which has been fuelled in part by a pandemic-driven rise in construction activity, supply chain issues, and manufacturing delays that have hampered access to heavy equipment.
After establishing a presence in Florida, Dozr plans to use the fresh capital to “replicate” this playbook in other markets across the United States (US), where it sees a lot of opportunity to grow.
“We’re just seeing a huge amount of growth in all of the [US] construction sectors, a huge amount of opportunity,” Dozr co-founder and CEO Kevin Forestell told BetaKit in an interview. “We’re just paying attention to which states to pick up next and grow into but it’s the opportunity size. It makes a lot of sense to be in the United States.”
Founded in 2015 by a group of construction and tech veterans, Dozr describes itself as “the world’s first comprehensive online search for heavy equipment.” The Kitchener-Waterloo startup connects contractors to 15,000 equipment rental company suppliers from across North America through its transparent digital marketplace.
In addition to this marketplace, Dozr also provides other solutions like WebStores, a white-labelled software product that allows rental companies to integrate Dozr’s e-commerce capabilities into their existing website and ERP systems.
According to Forestell, Dozr has seen “tremendous growth” over the past 18 to 24 months, including three-times revenue growth last year. “18 months ago, we achieved network effects, we kicked off that flywheel,” said Forestell, who added that pandemic-related factors like the increase in construction activity and supply issues have impacted demand for heavy equipment.
Amid these conditions, Forestell said there is “a huge amount of demand for rental equipment” right now. “We’ve seen a massive increase in online transactions and the demand to rent equipment online is at an all-time high.”
“We always knew that contractors wanted to get online,” said the CEO. “They were just about ready. And COVID has obviously pushed e-commerce forward five to 10 years [in] every industry, [including] the heavy equipment rental industry.”
Forestell describes Dozr’s core markets as Ontario and Florida. The CEO said the startup chose to focus on Florida in part because it “loves the seasonality component”—as construction work can continue non-stop, year-round because the ground doesn’t freeze, unlike in Ontario. He said the company also benefited from “a strong early set of partners” with a presence in the state.
“Using that Florida playbook, last year, we started to replicate that in California, Texas, Georgia, and the Carolinas,” said Forestell. “That’s exactly what we’re looking to do this year, is to continue on that momentum, continue to scale out those geographies.”
The company has also identified a list of other US markets it plans to expand to in 2022, including Arizona, Washington, Nevada, Colorado, and Tennessee.
Dozr is the latest in line of Canadian construction tech startups to see growth and raise funding during the pandemic, following Montréal-based RenoRun’s recent $181 million CAD Series B round.
Heavy equipment rental transactions are typically completed over the phone or in person, and involve a contractor working with a sales representative at a rental company. This process traditionally requires contractors to set up accounts with individual rental companies.
With Dozr, contractors can set up a single account and gain access to its broad network of equipment providers.
“The $56 billion equipment rental market is extremely fragmented,” Builders VC General Partner Mark Blackwell told BetaKit. “77 percent of the market is spread across [more than] 20,000 suppliers that are all looking to lead a massive shift from analog to digital transaction management.”
Blackwell, who is joining Dozr’s board as part of the round, described Dozr as “a complimentary and enabling solution for the over 20,000 suppliers in the space.”
“We see DOZR becoming the Kayak for rentals, providing a solution (without owning any of the assets themselves) that provides optionality and price transparency for users while consolidating supply in one portal to easily compare when selecting across suppliers,” he said.
“We see DOZR becoming the Kayak for rentals.”
-Mark Blackwell, Builders VC
For Builders VC, the investment in Dozr represents the firm’s “first major Canadian investment” from its recently announced $250 million USD second fund. As with Builders VC’s first fund, the firm plans to invest some of this capital in Canadian tech startups.
Alongside Blackwell, Jack Fraser, partner at BDC Capital’s Growth Venture Co-Investment Fund is also joining the startup’s board of directors.
Fraser argues that Dozr’s approach, which combines an integrated booking platform with data-driven products designed to optimize construction project efficiency “will provide a superior experience to the contractor community.”
Dozr currently has about 65 employees. Forestell said the company plans to grow its headcount to 130 by the end of the year, as it looks to scale out its engineering team, build more features for its rental company and contractor clients, and support its expansion into new US markets.
Feature image of Dozr co-founders Erin Stephenson, Kevin Forestell, and Tim Forestell, courtesy Dozr via company website.