by Scott Denne
Autodesk tops off a blockbuster year in construction software with the $875m acquisition of PlanGrid, a maker of project management applications. In acquiring the SaaS startup, Autodesk inks its largest deal and provides the latest indicator of the construction industry’s status as a maturing software market.
PlanGrid should augment the design and modeling focus of Autodesk’s construction and workflow software with the its more document-based approach. The acquirer also gets a new path to market. Where Autodesk typically sells subscriptions to IT departments of architectural firms, general contractors and the like, PlanGrid mainly sells its software on a by-project basis.
The construction market is propelling the topline at both firms – PlanGrid’s ARR expanded about 50% over the past year to roughly $65m, while Autodesk’s construction unit (its biggest) grew 28% in the most recent quarter, compared with 22% for the overall business. Autodesk’s peers and competitors have been equally eager to capture their share of that growth.
In 2018, purchases of construction-related technology vendors spiked to $4.2bn, more than the combined total deal value for 2017 and 2016. According to 451 Research’s M&A KnowledgeBase, three of the four largest transactions in that category were announced this year and all four in the past 12 months (Oracle disclosed its $1.2bn pickup of Aconex in the closing days of 2017.) Like Autodesk with PlanGrid, Trimble made its largest acquisition on record with the $1.2bn purchase of construction software provider Viewpoint in April.