CutStruct, a Nigerian construction procurement platform, had funded $600,000 to address one of the industry’s most pressing issues: material procurement.
The investment was led by Zedcrest Capital, DFS Lab, and LoftyInc Capital, with angel investors like Kola Aina, Founding Partner of Ventures Platform, participating.
Investors appear to have been drawn in because of the founders’ previous experiences in the real estate sector, which span 30 years and have taught them about the complexities of the building material procurement process.
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A Look At What The Startup Does
CutStruct, founded in 2019 by John Oamen and Tayo Odunsi, is a platform that connects building material sellers and contractors, streamlining the material procurement process for both parties.
The quotations are automatically created once the RFQ is sent, as the vendors also have a dashboard where they can input prices and product details.
“You’ll receive the quotations in your portal, where you can sort by price and see vendors from the cheapest to the most expensive. You can also sort by delivery time and see the earliest to latest delivery.”
Following the selection, the platform features an automated email tool that notifies other vendors.
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CutStruct earns money through a take rate or a transaction fee. Take rates, he claims, are standard in the construction sector, with vendors offering 2% to 10% depending on the supplies and the arrangement.
CutStruct, on the other hand, charges a 0.9% take rate that includes goods-in-transit insurance.
Another distinct selling point for CutStruct is its insurance layer. Oamen revealed that the goods-in-transit insurance plan is not cheap, but the addition could assist vendors and contractors in receiving all of their materials if there is a loss in transit.
Odunsi went on to say that if a vendor is not insured and materials are lost in transit, it can result in huge losses for both the vendor and the contractor. In collaboration with AXA Mansard, CutStruct has provided insurance coverage at a discounted bulk rate.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh