8% of global emissions arising from human activity comes from the cement industry. Cement along with sand and gravel are the primary components of concrete. Most concrete formulations have been overdesigned with excess cement for their intended applications. Concrete-AI uses data science machine learning to help cement and concrete manufacturers develop the ideal formulations, leading to cost efficiencies and improvement in carbon emissions. The company is already in pilot with some of the largest companies in the space and initial results have shown cost savings of up to 10% and carbon footprint reductions of up to 50%. Offered as a SaaS solution, Concrete-AI targets the $652B global cement and concrete market that’s expected to exceed $1T by 2030.
LA TechWatch caught up with Concrete-AI CEO Alex Hall to learn more about the concrete and cement industry and its impact on the environment, the company’s strategic plans, recent round of funding, and much, much more…
Who were your investors and how much did you raise?
$2M. The Grantham Foundation for the Protection of the Environment, a prominent family office, and other marquee investors participated in the Seed round.
Tell us about your product or service.
Concrete-AI’s pioneering data science platform that uses artificial intelligence (AI) and machine learning (ML) to optimize supply chains and materials selection to bring new efficiencies to the design, proportioning, and production of concrete mixtures. Concrete-AI’s platform delivers unparalleled reductions in the cost and embodied carbon of ready mixed and precast concrete used in construction, without any changes in their method of production, the materials used or anything else.
What inspired the start of Concrete-AI?
Traditionally, because it has been difficult to predict how the constituents of a concrete mixture will affect its performance, concrete formulations have been overdesigned such that they contain excess cement. In the U.S. alone, this overdesign costs the industry more than $1 billion annually and results in 10 million tonnes of incremental carbon dioxide (CO2) emissions associated with cement production. We set out to fix this using artificial intelligence and machine learning.
How is it different?
It’s really the first software platform that can accurately forecast the optimal formulation of concrete for any given project. During pre-commercial piloting with several of the largest cement, concrete, and chemical admixtures manufacturers, including Summit Materials (NYSE: SUM), U.S. Concrete, a Vulcan Materials Company, and Votorantim Cimentos (Prairie Material), Concrete-AI’s platform has been shown to reduce the material costs and embodied carbon footprint of ready-mixed concrete (RMC) by up to 10 percent, and up to 50 percent, respectively.
What market you are targeting and how big is it?
We are targeting the multi-billion-dollar concrete industry. The US total Readymix market is around $45B, globally it’s over $1T. Material are typically 55-60% of the cost. On the carbon side, the US has the potential to generate around 10M tons of CO2 offsets. Globally that number is closer to 500 million tons. We consume around 110M tons of cement in the US, the world produces more than 4B tons annually.
What’s your business model?
It is a Software as a Service (SaaS) model.
What are your post-COVID office plans?
We were born in the virtual world of COVID. Like many companies, we expect to have a hybrid approach to work going forward.
What was the funding process like?
We were very pleased with the response from the venture capital community. Our commonsense approach to reducing the carbon footprint of the concrete industry (just use less of it!) was attractive to them.
What are the biggest challenges that you faced while raising capital?
Probably the biggest challenge was just the challenge of being able to meet with people in person.
What factors about your business led your investors to write the check?
Our investors want to back companies that can make a difference in the world by reducing CO2 emissions. The fact that our platform enables companies to not only reduce emissions but also reduce waste and lower costs for customers was attractive to them.
What are the milestones you plan to achieve in the next six months?
It’s all about product. We are taking the lessons learned from our pilot clients and ensuring we deliver real value. Looking to have a fully developed optimization offering within Q2 with the offset credit tracking tool in place during Q3.
We anticipate converting LOIs into commercial contracts by the end of Q1 and expect the consequent revenue during Q2.
Finally, we will be taking on 3-4 new hires during Q2 to help with scaling and interface development into the existing quality control and batching systems.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
The quickest path to capital is to have a product that solves a real problem for customers. I tell entrepreneurs all the time – solve a problem for the customer and the capital will follow.
Where do you see the company going now over the near term?
Our focus is on our pilot clients and their success. We expect to be in at least 50 locations in the US by the end of July. From there, the rate we scale is totally dependent on how quickly we can grow the team.
What is your favorite restaurant in LA?
Farmshop in Brentwood. Consistently great food, Chef Brian is a legend and the best host in LA – Kyle Jones.
