• Investor targets markets where specific technologies have an edge on the US
• Australia’s compliance regime has nurtured a clutch of workplace safety start-ups
• HammerTech is expected to pursue organic, inorganic expansion in US, Europe

As one of Australia’s earliest unicorns, SafetyCulture is the highest profile of what Jeff Parks, a co-founder and managing partner at Riverwood Capital, describes as a cohort of construction safety start-ups that have emerged from the country. He links it to compliance regulations imposed on local contractors that are so stringent they put the US to shame.

These dynamics prompted Riverwood, a growth-stage technology investor headquartered in Menlo Park, to lead a USD 70m funding round for construction safety software developer HammerTech. It is the firm’s second investment in Australia and part of a worldwide quest for opportunities in segments where US technology lags other markets.

“Sometimes smaller countries adopt technology faster and eventually those ideas make their way to the US. As global investors, we’re always trying to survey these things so that we have a good understanding of what’s to come,” said Parks.

“Regulatory drivers in Australia and New Zealand are stronger, more powerful, and earlier than in the US, but many of the same drivers are visible here too. That’s what creates an interesting growth opportunity and a competitive moat.”

Riverwood, which was established by Parks and fellow KKR alumnus Francisco Alvarez-Demalde in 2008, backed HammerTech through its fourth fund. The vehicle closed last year with USD 1.8bn in commitments and makes investments in the USD 25m-USD 125m range.

Team members are organised thematically – under sub-sectors such as IT, B2B software, and hardware and semiconductors – and source deals globally. North America and Latin America are the two largest markets, and the firm has made selective investments in the likes of Israel, Austria, Singapore, Australia, and India. A spokesperson said the firm would like to do more in Asia.

At present, Riverwood has exposure to cross-border payments specialist Nium and B2C marketing software provider Insider, both based in Singapore. The first Australia deal was the lead role in a USD 41m round for One Model, a human resources technology start-up now headquartered in the US. The investment closed in August 2023.

Riverwood has joined the HammerTech board alongside another US investor, Arrowroot Capital, which led a USD 10m Series A round in 2019. In 2022, the start-up participated in 30×30, an accelerator programme established by the Victorian state government.

Expansion plans

Launched in 2015, HammerTech’s platform digitalises the construction management process, including worker safety training, compilation and monitoring of compliance documentation, and tracking of incident reporting and site inspections. The goal is to provide insights to all stakeholders, from workers to site supervisors to management.

The company claims its solutions are used by 85 of Australia’s top 100 construction companies. It expanded into North America in 2018, New Zealand in 2020, and the UK and Ireland last year. There are now more than 500 clients worldwide, and HammerTech has featured in over 20,000 construction projects involving more than 3.6m workers.

“We don’t necessarily require a company to have a US market opportunity for us to invest. But it might give us an incremental edge if that’s something a company is thinking about, and we do have a lot of expertise around scaling companies, particularly into the American markets,” Parks said.

HammerTech is seen as a good fit for US expansion, through organic and inorganic channels, and part of the proceeds of the latest round will go towards business development in the US and Europe.

Ben Leach, co-founder and CEO of HammerTech, believes the company’s offering is unique because it combines transparency through data with an appreciation of the unique needs of the construction industry. Expansion means addressing local nuance – from regulations to permits to inspections – but these can be integrated into the platform.

“While the US and Canada have different regulatory environments than Australia, there are certain universal issues – job sites are high-risk, workers are getting hurt. Additionally, construction teams struggle with compliance due to repetitive paperwork,” Leach said.

“We improve safety programs by wrapping them in digital infrastructure, giving contractors full compliance visibility and more efficient process management. This helps them focus resources and manage pressing risks, ultimately leading to safer job sites.”

Use cases have evolved over time. Initially, regulation was the main demand driver as construction companies sought guidance on compliance. Then it became risk mitigation and litigation avoidance, and now it is broader efficiency gains.

“Ultimately, this company and its solution are moving up the value curve to ensure the most important resource – human capital – is safe, productive, and deployed in the right way,” Parks said. “HammerTech can tell a customer exactly what every single person is doing and whether they are compliant. That’s a critical objective in the boardroom.”