We’re delighted to announce our newest investment in Vergo’s $4.1M Seed round led by CRV. Nine Four Ventures is excited to partner with Rich, Einar, the Vergo team, and the investor syndicate to build a category defining digital banking platform for the AEC industry. Here is a bit more about the business, opportunity and why we invested.
Vergo is a digital banking platform for the AEC industry and serves a broad range of customers such as general contractors, subcontractors, interior designers, architects, and home service pros among others. Vergo offers a variety of FinTech products including virtual and physical debit and credit cards that digitize the current paradigm of making payments with cash or check and reconciling payables and receivables manually in Excel. Vergo adds transparency to these historically opaque processes by making it easy to distribute cards to employees or hired contractors and assign cards to specific projects that roll up to a single ledger in the cloud.
Using the rise and success of digital banks across other parts of the economy as a proxy for what could lie ahead, Vergo has a very exciting future product roadmap. Vergo’s aspiration is to allow contractors to pay counterparties and finance and insure purchases digitally and instantly at the click of a button from a single application. By embedding additional products and services within its core platform it will allow Vergo to increase wallet share, reduce churn and become even more engrained within their customers’ critical daily workflows. However, and most importantly, Vergo’s “connective tissue” software results in less paperwork, reduced errors, shorter turnaround times, decreased costs and higher customer satisfaction which will benefit all.
The Nine Four team became familiar with the overlooked and underestimated challenges associated with making payments and managing cash flows offline as we engaged with contractors of all shapes and sizes across the construction ecosystem . We wrote about “Brex for Construction” in our 2020 PropTech Trends and were anxiously looking for someone working on solving this problem. When we learned about Vergo and met Rich, it was clear that we shared a common vision for the future, this was exactly what the industry needed, and he was the best person to build it.
Vergo was born out of Rich’s previous experiences working as a member of JP Morgan’s FinTech Strategy team, where he built internal FinTech products and moonlighted as a furniture company founder where he worked with subcontractors and noticed the pain of bespoke payment workflows first-hand. The number of human errors and shadow costs were expensive and made it easy to lose track of orders and invoices. Rich knew there had to be a better way. That’s when he left JP Morgan, met his CoFounder Einar from BBVA in YC Startup School, and joined Forum Ventures’ accelerator to found Vergo.
Construction finance has been a major focus area for Nine Four Ventures for many years. Early on in Fund I, our LPs at the intersection of banking and construction tipped us off to the historical challenges of sending and receiving payments and managing AR/AP across the landscape. As a result, we’ve been hyper-focused on investing in technologies that are modernizing money movement by condensing those repayment periods and managing cash flow crunches in a secure and compliant way. The goal is to ultimately realign incentives and help complete new projects on time (or faster!) and on budget. This is what led us to invest in Built Technologies, which is digitizing construction loan draw management between “upstream” stakeholders (e.g. banks, developers, and GCs), and OpenSpace, which is creating data to support the construction process and keep more accurate tabs on project progress, and Vergo which is digitizing money movement between “downstream” stakeholders (e.g. GCs, tradesmen and women, and suppliers).
Rich’s vision is big and will require a lot of talented teammates to help make his vision a reality. If you’re interested in revolutionizing how money flows through the construction ecosystem, please consider applying to join the Vergo team.
Congrats Rich, Einar, and the entire team at Vergo. We’re just getting started!