YC Alum/Construction Disruptor PlanGrid Nails $1.1M Seed Funding From Box, 500 Startups, And More

One more Y Combinator startup from the March 2012 class has bagged a seed round of funding. PlanGrid, which has created a groundbreaking app for the construction industry, has raised $1.1 million from a notable list of backers. They include Suleman Ali, founder and CEO of TinyCo; Sam Altman, founder of Loopt; Paul Buchheit, the creator of Gmail; Matt Cutts, the head of Google’s Webspam team, and Ray Levitt, Director of Stanford University’s Construction Engineering department; 500 Startups; and Y Combinator itself.

Plus, here’s a twist: the funding marks the first investment in a startup (outside of acquisitions) by the cloud-services company Box, as part of its /bin Box Innovation Network initiative.

Ryan Sutton-Gee, one of the co-founders and CEO of PlanGrid, tells me that the motivation for Box is to foster cloud-based enterprise apps. “Box and PlanGrid initially started talking simply to discuss possible integration,” but they were impressed enough with the product and team, and so they offered to help with fundraising, he said. Since launching its first app in March, PlanGrid’s customer base has shot up. Sutton-Gee says that it is now being used by over 2,900 construction projects worldwide.

The app, which we detailed in length we first covered PlanGrid, in its basic concept is aimed at taking away some of the pain points and costs in creating blueprints for construction workers, in itself, $5 billion industry, Sutton-Gee says. The idea: transfer the whole “analog” process of printing out and distributing costly blueprint sheets into a slick and easy-to-update iPad app. (And expensive/inefficient it is indeed: for every $1,000,000 in building costs, there are $3,500 of printing costs, Sutton-Gee says.)

The funding will be used to expand PlanGrid’s team, add more features to the app. “Raising this round is a major milestone for us, and it will add a lot of fuel to our fire in bridging the gap between good, intuitive software and the construction industry,” says Sutton-Gee.

At the time of the launch, I wondered aloud whether the construction industry would be a challenging market — the iPad doesn’t seem like the most rugged of gadgets — but PlanGrid’s calculations that their product would be a game-changer have borne out:

Apart from the fact that their customer base is growing, it seems like PlanGrid is actually changing user perception. “Customer feedback has continued to be really great, especially from our in-field users,” says Sutton-Gee. “We’ve had many customers tell us that PlanGrid is the reason they decided to buy iPads, and that we are the killer tablet app for the construction industry. We’ve even had a couple customers tell us they were going to buy Android-based tablets until they found us, and decided to change their IT strategy to incorporate our product.”

And there will be more features to make PlanGrid even more sticky: since launching Sutton-Gee says his team has added several new features, including the ability to pin photos taken with the iPad to blueprints (“finally a sensible use for the iPad camera!” he quips), the ability to attach any .pdf to individual blueprint sheets, and adding retina support for the new iPad (“which makes blueprints look really fantastic”), in addition to a redesign of the UI of the app.

He notes that a new version of the app is now with Apple with more enhancements. Users will be able to share markups across iPads and back up to the web (similar to Google Docs sharing, he says). Plus photos taken with the camera will automatically upload to the PlanGrid cloud (“a la Instagram”). Users will also be able to build an automatic archive, and PlanGrid has created a web-based version of its .pdf renderer to keep track of everyone’s documents.

Sutton-Gee says that in terms of take up, PlanGrid is seeing the most usage in California, Texas and Massachusetts in the U.S., “but have paying users in pretty much every state, and we also have paying users in Australia, Mexico and Canada.” The app is being used on a wide variety of projects, he says, with the biggest on large buildings such as hospitals and manufacturing facilities.