With less than two years of operation and a B2B platform for selling construction materials – a business model on the rise following the growth of the construction market in Brazil in the last two years – startup Oico secured a BRL 30 million Seed round led by Valor Capital Group. Also signing the check were Tiger Global, CSN – Inova Ventures, and Jonathan Wasserstrum, CEO at SquareFoot, in addition to the existing investors MAYA Capital and FJ Labs, who had already invested in the pre-Seed round of BRL 8.5 million raised in 2020.
Founded in April 2020 by Pedro Dellagnelo and Pedro Rocha, Oico is a marketplace for construction materials that manages orders, provides a price-and-quote service, makes deliveries and processes payments on a single platform.
The startup‘s value proposal is to put an end to the laborious path that construction companies go through whenever they need to buy supplies for construction projects, a process that, as a rule, involves buying from multiple suppliers, dealing with various delivery deadlines, and different prices and payment conditions. With Oico, construction companies and contractors can buy from several suppliers and put everything in a single order, pay via a platform, and receive everything at once.
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“We started by looking at the problems faced by building material stores, and suppliers. This is a very fragmented market, and in the end, everybody wants to sell more. On the buyers’ side, this process of buying materials has not changed in the last 20 years, there are daily and different demands that are not met by a single store. So the buyer needs to search for better prices in several stores, buy from several suppliers, arrange for deliveries. It is a bureaucracy that makes no sense today,” Dellagnelo told LABS in an interview.
Oico offers two buying options: the customer can buy from a list of building materials, with price, inventory availability and delivery deadline indication; or the customer can request a quotation for a specific order. “With each interaction, we gather data and today we have a database with more than 1,000 suppliers and 100,000 products. This enables us to respond very quickly to customer requests and offer the best budget, the best product mix.”
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The startup also offers a credit product for construction companies, in which Oico pays the supplier and allows its customers to pay the debt directly with the startup in 30, 60 or 90 days.
According to Dellagnelo, credit is a frequent problem in the industry. “Because the companies don’t want to pay in cash for materials for a job that will be delivered within 90 or 120 days. So they need credit to be able to pay for this purchase in installments. But if you deal with 20 suppliers, you can imagine the insane of dealing and getting that credit with all of them.” In the future, the startup plans to offer customized credit products.
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Oico arrived on the market days before the pandemic turned the world upside down. Dellagnelo recalls that, at the time, the business was discredited by some. However, what we saw was a boom in renovations and construction projects, a trend that has not yet slowed down. The startup ended 2021 with more than 100 clients, an average ticket of BRL 4,000, and a 30-fold growth in relation to the previous year, said Dellagnelo.
For Antoine Colaço, managing partner of Valor Capital Group, besides the right timing, Oico’s good performance has to do with the solution offered by the startup to the well-known inefficiencies of the civil construction market in Brazil.
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“Despite all the relevance to the Brazilian economy, the construction market still has inefficiencies in its supply and logistic chain, affecting mainly small and medium-sized construction companies. Oico’s one-stop-shop platform aims to take the friction out of this process and deliver an integrated solution not only for construction companies, but also for building material stores, which will have better liquidity options and access to new customers,” said Colaço.
For now, Oico only operates in São Paulo city and its metropolitan region. The funds recently raised will be invested in technology and logistics infrastructure, to scale up complex operations and automate processes. To this end, part of the money will be allocated to hiring new talents for the operations and technology teams.