When facilities maintenance software attracts a $100 million investment, you know enterprise software is hot. Don’t get me wrong, facilities management software is a fairly interesting space (nerd alert), but I did not expect this level of love from PE firms!
Warburg Pincus announced yesterday that it will invest up to $100 million in Dude Solutions, the NC-based owner of SchoolDude and FacilityDude, SaaS platforms for facility maintenance. (I’m not making up the Dude name or theme.) There is some hype in the $100 million figure, but Warburg also owns another property in the space, Facility Source, which, in turn, bought a service company called Ascential. A logical guess will be that they will combine companies, though this is not stated in the press release.
Warburg is by no means the only PE Firm in the space. Vista Equity spent the last few years buying 4 or 5 companies in facility software to build Accruent. TA Associates recently bought a majority interest in Accruent while Vista maintains a stake. Wind River Holdings owns First Service Networks and FM Facility Maintenance, two services players in the space as well. There are other examples, but you get the point.
IBM (Tririga), Oracle (Skire, Primavera) and others (Textura) have already invested in the “glamour” end of the real estate business–construction. But once, those construction projects are completed someone has to maintain those buildings. It’s literally the dirty work. Facilities maintenance spend is:
- complex
- recurring (unlike construction)
- involves large numbers of transactions and
- thousands of tiny suppliers
In short, it is a procurement nightmare, but a SaaS dream. It’s the kind of management challenge that lends itself to automation and/or outsourcing. It was only a matter of time before procurement and SaaS technology caught up with this challenge and that time appears to be now.
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