How Prolo Uses AI to Modernise Construction Purchasing

James Morris-Manuel, CEO & Founder at Prolo, knows the construction industry's pain points from both sides of the site fence.

Growing up in a family of developers, he spent his childhood watching building projects grow up around him – and grew all too familiar with the delays, cashflow crunches and inefficiencies that come with them.

His career took him first into commercial real estate at Cushman & Wakefield, before he founded Virtual Walkthrough in 2009, a digital walkthrough platform likened to "Google Street View for inside buildings". The business was acquired by Matterport in 2016.

That experience, combined with a lifelong front-row seat to the construction industry's challenges, led him to found Prolo – a platform built around what he calls "procurement as a service". By handling sourcing, pricing, logistics and even credit for materials, Prolo aims to tackle three of construction's biggest headaches at once: cashflow constraints, time, and the cost of getting a project over the line.

Following news that the company has raised £4.2m (US$5.6m) in seed funding, James spoke to Procurement Magazine about Prolo's mission, how it is using its latest funding round and the role AI plays in making construction procurement faster and fairer for everyone involved.

You've just had this funding announcement – what do you hope to achieve now?

This latest injection of capital will act as a real catalyst for our next phase of growth, with the funding being strategically deployed across two core pillars of the business.

Firstly, we are significantly scaling our commercial operations.

We plan to accelerate our go-to-market strategy, driving our sales and marketing efforts to onboard new construction firms, whilst simultaneously expanding our network of suppliers and merchants to strengthen both sides of our marketplace.

Secondly, we are making substantial investments in our product and engineering capabilities.

We are incredibly focused on building out robust automations, streamlining complex workflows, and enhancing our data infrastructure to ensure we continue delivering unparalleled value to our clients.

How is your platform going to convince traditional builders' merchants to offer that transparency and that competitive pricing, rather than protecting their usual margins?

We unlock efficiencies in multiple ways without trying to compromise on merchants' margins. For instance, we offer to pay all of our suppliers upfront, so we ease their cash flow.

We eliminate a lot of the administrative burden for them and the working capital risk. And as a result of that, they will often give us more competitive prices.

There are lots of ways of working with traditional merchants and fitting into the way they want to do business.

When materials deliveries are delayed, it causes project friction. Prolo acts as an outsourced procurement team – who holds the contract risk? If a supplier fails to deliver on time, does that fall on your shoulders?

At Prolo, we act as the merchant of record. We serve as the single source of accountability for the project, so it's essentially providing one throat to choke if anything goes wrong.

We take full ownership of the process and the delivery process, and we leverage our relationships to coordinate with all the suppliers and third-party logistics companies to ensure everything is delivered on time.

So we proactively manage the supply chain to ensure that there is minimum friction and minimum delay to any construction site.

You're working to scale up your automation and AI tools, could you tell me a bit more about that?

So one of the great things about AI in today's world is that it's very effective at taking messy, unstructured data and making it structured.

And that's part of how we've created our omnichannel entry point. A customer can communicate with us any way they want,  they can send us an email, a WhatsApp, a text message, or make a phone call.

It doesn't matter how we receive the enquiry, because we're able to use AI to take that unstructured, messy data and turn it into a structured process. So then, once we've got that, we go and run our procurement workflow. 

What has been the early reception to Prolo?

The early reception has been fantastic. We now have more than 50 customers continuously purchasing with us, but what is truly exciting is that these businesses are growing, and we are fundamentally growing alongside them.

Instead of spending hours ringing around different merchants to chase quotes, we take on that entire administrative burden and secure them highly competitive trade rates.

Ultimately, we are saving them a significant amount of time and money, leaving them completely free to focus on what they do best - getting the build done.

Is Prolo acting like a group purchasing organisation by bundling SME orders together to force lower rates, or is the AI finding pricing gaps among merchants? Tell us a bit more about your role there.

There are many, many ways to achieve the best prices, such as splitting orders so that the right products go to the right merchants.

For example, if we get a big basket of materials to purchase, there might be a big chunk of timber that would go to a timber merchant, and then there might be a big chunk of aggregates, which would go to an aggregates merchant. 

We're very effective at finding hidden prices and gaps between merchants that have the best availability at a particular time. Those are just two examples: splitting of orders and finding those hidden gaps.