Arena: Market Conditions Before Procore Technologies
Builders and general contractors running multi-company projects · 2002 · United States
Disconnected workflowsHigh setup and upkeep costs
A building project brought together an owner, designers, a general contractor and many trade firms, each a separate company, and information passed between them on paper and was typed in again at each step. NIST put the cost of that re-entry and duplication in US capital facilities at $15.8 billion in 2002, about two thirds of it carried by owners PC31. Construction was close to a tenth of the US economy yet barely used the internet, and job sites had no connection at all PC19 R6. The project software that existed ran on client-server systems a contractor had to buy and maintain, licensed by the seat, so most builders kept coordinating drawings, schedules and changes by hand PC2 R6 PC31.
How each step happened
Step 1 of 5 · 2002–12
One shared record for every company on the job, on a multi-tenant cloud
Procore's innovation was one online record that every company on a building job could open, run as a single shared system instead of a copy per customer. The hosted rivals Courtemanche describes gave each customer its own instance of the code, which he calls "a big boat anchor" on them R6. He wrote Procore as one codebase with "a company ID in front of every database table", so "the incremental cost to bringing them online was next to zero" R6. A record for the whole project team, not only for whoever holds the drawings, later set Procore apart from PlanGrid.
The idea came from building. Courtemanche had trained as a union apprentice carpenter and worked construction before becoming a software engineer R6 PC19. Running the remodel of his own house from a distance, he printed Microsoft Project schedules for weekly meetings with the subcontractors, found "no certainty in the schedule" and put it on the web R6 PC20. Local builders asked to license the tool, and it spread by word of mouth to 250 high-end home builders PC2.
Surviving until the job site went online
Job sites had no internet until 3G and the iPad arrived R6. When the 2008 crash stopped home building, Procore lost nearly every customer and cut to five employees PC6 PC19. It stayed with builders when one investor would back it only "if you did it more like Facebook", and moved to the commercial and mixed-use contractors that survived PC41 PC6. Lemkin's account of his interview with Courtemanche puts the competitors lost in the crash at more than 20; afterward, Courtemanche says, "the landscape was empty" PC6 R6. Revenue was $4.8 million in 2012 PC4.
Rivals PlanGrid was founded in 2011 by construction-management graduates who had worked as job-site engineers, and launched in 2012 as an iPad app for field workers to store and view blueprints PGX-2 PGX-1. It covered drawings and field issues, with no budgeting, scheduling or bidding PGX-6 PC40.
Novel ArchitectureFounder Domain Expertise
Step 2 of 5 · 2008–20
Price the project, not the seat: every partner joins free
This step starts inside step 1's years because the price was settled during the crash; it follows from the shared record, which works only if everyone on the project is in it. Seat licenses were the industry's model, and Courtemanche says he knew they would make customers decide that "Logan doesn't need a license" for a short-term participant, "and then all these workflows would break" R6. Procore charged $95 a month per project instead; in the crash, needing payroll, its one salesperson quoted a prospect $30,000 a year and the model changed on the spot R6. The unit came from an early customer who bought insurance by construction volume; Courtemanche set a rate in basis points of volume to match the roughly $35,000 that customer paid for seat licenses R6.
The 2020 S-1 states the terms: unlimited users, priced by the products bought and the dollar volume of construction the customer runs on Procore each year PC1. Partners on a customer's jobs, called collaborators, use it free: in 2019 each customer invited more than 170 project participants on average, and more than 60% of 1.3 million users were collaborators PC19 PC1. Courtemanche calls the model "wildly unpopular with our customers" PC8, but says "CFOs love it" because they buy only the volume they use R6. A general contractor had no reason to keep any partner off the system.
Rivals PlanGrid sold subscriptions by sheet count: free for a few pages, $19.99 a month for 550 sheets in 2012, and up to $100 a month in 2015 PGX-1 PGX-3; later basic tiers ran about $39 to $49 per user per month PGX-6. Its free tier served one person with a few drawings, not a whole project team.
Freemium ModelUsage-Based Pricing
Step 3 of 5 · 2014–23
Collaborators become customers, who invite the next project team
Free collaborators turned each paying customer into a source of the next ones. A collaborator uses Procore for the life of a project, logging in about 100 times on product chief Wyatt Jenkins's example, and some then buy and invite their own partners PC11. In the first half of 2023 roughly 40% of new customers had been collaborators on a Procore project before they paid PC11. The loop carried Procore from mid-market general contractors to owners and specialty contractors PC9.
People carried it too. Project managers moved between construction firms and brought Procore with them: "Our best salespeople have always been our customers," Courtemanche told Lemkin PC6. After Bessemer's first institutional round in 2014 PC19, Procore built an outbound sales team of salespeople it taught construction PC45 PC6. Bessemer wrote in 2015 that it was "selling to construction companies who never bought software before" PC38. Customers grew from 4,310 at the end of 2017 to 8,506 two years later PC1.
Rivals PlanGrid grew through App Store search, a free trial and a sales call the same afternoon, and had 10,000 paying customers and 200,000 projects by May 2015 PGX-4 PGX-3. Each sale added one customer; its CEO Tracy Young later described PlanGrid as the number two, about a third of Procore's size PGX-4.
Growth LoopCustomer Referrals
Step 4 of 5 · 2016–25
One project record from bid to payment
With no seat or project fees, Procore could grow an account only through more construction volume or more products PC13. It waited until 2016 and 2017 to pursue more products seriously, building only what customers asked for PC6. The line grew from four products in 2017 to 13 in early 2020 PC1. Honest Buildings (2019) brought construction financials and Levelset ($500 million, 2021) lien-rights management PC37 PC21.
Each product put another part of the project into the same record: budgets, commitments, invoices, lien waivers. Procore Pay carries it to the payment itself, from subcontract through invoice and owner approval, and one pricing option charges subcontractors nothing, since they are already in the record as collaborators PC11; it had about 250 customers in early 2025 PC35. By mid-2023, 44% of customers used four or more products and that group produced 70% of ARR PC15; customers paying more than $100,000 a year rose from 655 in 2019 to 2,710 in 2025 PC1 PC22.
Rivals PlanGrid stayed a drawings and field tool PGX-6. Young wrote that it hit a wall with small and mid-market firms and needed to reach enterprise buyers, where two larger rivals were ready and it was not PGX-5. Autodesk bought it in November 2018 for $875 million, expecting about $100 million of ARR in its fiscal 2020 PC32.
Multi-ProductEmbedded FinanceData Gravity
Step 5 of 5 · 2019–26
Switching costs, reinforced by partners already in the record
The record built in step 4 is what makes Procore hard to leave. Budgets, commitments, invoices and years of project documents sit in one system, and Procore's Geoff Lewis told investors that customers who connect its financials to their accounting are especially sticky PC11. Okland Construction's move to Autodesk meant rebuilding its takeoff and cost-coding workflows PC25. The partners from step 3 add weight: customers' directories listed 716,000 construction companies in 2024 PC43, and CEO Ajei Gopal describes owners mandating Procore for their general contractors, who then bring their subcontractors PC28. A contractor that switches must move its partners too.
Gross revenue retention was 95% in 2025, and Procore reports winning more than 60% of contests against its top rivals PC24 PC16. The limit on the barrier is price, and it comes from step 2: the volume fee grows with a contractor's work. Some contractors moved to cheaper products in 2022 PC37; a Georgia general contractor left for a cheaper product in 2024, came back in 2025 and expanded PC28. As growth slowed from 55% in 2019 to 15% in 2025, Procore named a new CEO and moved to bundled packages PC1 PC24 PC14 PC22. The free seat from step 2 put the partners in the record; the volume fee behind it is what cost-focused customers push against.
Rivals PlanGrid did not reach this stage on its own. Inside Autodesk about 40% of its team left within 18 months PGX-5, it was merged with BIM 360 into Autodesk Build in February 2021 PCX-3, and the PlanGrid name was phased out PC40. Autodesk's product needs an invited partner to hold its own subscription or be assigned one PC42.
Switching costsCollaboration & exchange network effects