Ferguson Ventures, the corporate venturing subsidiary of US-based plumbing and heating product supplier Ferguson, is concentrating on its portfolio companies in the face of the coronavirus-fuelled downturn, managing director Blake Luse told Global Corporate Venturing.
The unit launched in August 2018 and concentrates on construction and property-related technologies. It has since built up a portfolio including domestic services marketplace Homee and PypeServer, which provides software to manage steel-pipe manufacturing.
“Right now, we are staying very close to our portfolio companies,” Luse said. “We have been on weekly calls and conversations with them, making sure they are keeping their associates safe, making sure they have the cash they need on hand, understanding they need to protect their income statement and look at any costs they could push to a few months down the road until the event passes.
“As far as the investment side goes, we are still looking at deal flow, still looking at opportunities but – as we have been in the past – we will continue to be very selective on the investments we make and really make sure they are strategic to our business.”
Ferguson Ventures is looking to integrate artificial intelligence and computer vision technology into its work and has team members located in an Atlanta-based innovation lab as well as in Virginia, Texas and Washington DC.
The unit is using Microsoft Teams to coordinate, and Luse suggested the change in working practices is something that will be reflected across its target industries, including construction, which has been slower to digitise than some other areas.
“Coming out of this, everybody within the construction and property maintenance industries, even the contractors and the designers, have gone remote,” he said.
“The ones operating in the cloud, that have software that can help their associates best handle remote and virtual work, will continue to onboard and digitise their processes and so will gain more efficiency.
“I really think the industry will continue to adopt software that will allow them to gain more efficiencies and will be open to adopting them coming out of this.”
Although there are many industries suffering from the downturn right now, the lockdown of building sites and stalling of the property market mean demand is set to fall among some of the unit’s target sectors.
However, the decline in business may end up making the technology developed by startups more appealing as companies in the sector strive to increase efficiencies to shave costs.
“Based on the conversations we are having, there is not a major trend we are seeing yet, in terms of a drop off in business,” Luse said.
“It will come, but the portfolio companies we are talking to are preparing for some drop off in demand, and they are making sure they have their income statement ready and are pushing off everything they can into the future to when we have more certainty on the environment.
“As far as using the digital tools to design and construct buildings, and the tools to help maintain a property – those are two things that in my opinion will grow even coming out of this. Because you are going to need to adopt the software to digitise your processes so you can gain inefficiencies, and if you needed to do that before Covid-19, you will still need to do that after Covid-19.
“Where some of the job sites and construction sites may slow down, and some of the residents in a multi-family property might have a hard time paying rent, or some in the hospitality environment might have less people taking vacations, there will be some dip in demand. But coming out of this, I think the companies will make sure they have the tools they need to service their customers.”
