Japan construction software supplier gets $8.5m

Mitsui Sumitomo Insurance Venture Capital, SBI Investment, SMBC Venture Capital, Anobaka, Kyogin Lease & Capital, Mynavi Corp, Nanto Capital Partners, and Mint also invested. It follows a seed round of JPY 100m provided by Anobaka, SBI, and Mint last year.

Ballas was founded one year ago by Shono Kimura, who has several years of metals procurement experience with Sojitz Corporation. Kumura also previously headed business development for Catallaxy, a metal custom parts trading platform backed by SMBC and Incubate Fund, one of Mint’s LPs.

The key theme of Kumura’s career is the introduction of digital technologies into traditional construction supply chains, enabling more sustainable and optimal procurement of parts and materials. The idea is to solve problems around stagnant productivity, soaring raw materials prices, and chronic labour shortages.

Ballas has supplied more than 1,500 mostly made-to-order metal parts for various projections, including stores, hotels, and office buildings. The service is said to shorten delivery times and man-hours by up to two months versus conventional procurement processes.

The start-up claims expertise across design, development, and manufacturing. These capacities are supported by partnerships with Mitsubishi Corporation’s MC Data Plus and Sanei Construction. Sales have grown at 39% a month on average, according to a statement.

The plan is to expand the operational footprint and develop the technology with a view to moving into adjacent service areas for the construction industry such as finance, insurance, and human resources. Ballas has also indicated it hope to expand its team.

Construction is a JPY 60trn market in Japan, comprising 500,000 licensed contractors and 5m workers. It is said to account for as much as 15% of national GDP. Procurement is considered a large and particularly inefficient part of the industry.

Previous activity in this space includes The Carlyle Group selling a materials supplier to Lone Star Funds, Orchestra Private Equity acquiring a scaffolding business, Polaris Capital exiting a timber supplier, and Jafco acquiring a construction equipment maker.

Much of the tech-focused activity has concentrated on challenges around staffing, with J-Star having invested training platform Aki-Japan and Rising Japan Equity previously backing contracting services provider Progress. Last year, MPower invested a construction jobs platform called Sukedachi.

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