Kitchener, Ontario-based online heavy equipment contractor-to-contractor marketplace Dozr has raised a C$2.5 million equity financing seed round, from FairVentures Inc., the innovation investment arm of Fairfax Financial Holdings Ltd., which Dozr will use to help its expansion efforts in the United States.
Bringing the idea of the sharing economy to owners of under-used construction and heavy equipment, Dozr provides a marketplace for owners to earn extra money by matching them with users who can also save approximately 40% of the normal retail rental rate on heavy equipment while also offering renters greater choice in variety of equipment.
Dozr is free to join and offers both construction and agricultural equipment on its platform.
Fairfax has also developed an insurance coverage plan built in to the Dozr platform as part of the investment deal, through its subsidiary, the Federated Insurance Company of Canada, meaning that equipment owners will be protected when their machinery is rented out, making Dozr the first company in Canada in the heavy equipment market to provide insurance through a short-term rental platform.
“Now we can give equipment owners comfort that they are protected if something goes wrong while someone is using their equipment,” said Kevin Forestell, Dozr director and co-founder. “Until now, they just had to keep their fingers crossed because no one else offered insurance, and it was nearly impossible to get through a broker.”
Normally, contractors working with heavy equipment are required to provide their own insurance by the companies renting it out, leaving owners at risk because the policies may or may not cover a third-party renting the equipment.
Fairfax Financial Holdings manages more than USD$36 billion in assets, investing mainly in the restaurant, retail, and travel sectors, but also in insurance.
FairVentures opened an innovation lab at the Communitech Hub in February, where they recently staged an event called Insurance Disrupted, challenging two dozen participating start-ups to brainstorm ways that the insurance industry might innovate.
“We are very pleased for FairVentures to partner with Kevin and the entire entrepreneurial Dozr team to deliver their innovative new service in Canada and globally,” said Paul Rivett, President of Fairfax. “Dozr is a great new Canadian innovator that is transforming the heavy machinery industry, with an outstanding equipment sharing platform developed by Kevin’s team.”
Under-used resources are a special problem in the construction industry, where the cost of ownership is a drag on profitability, which might be eased a little if equipment wasn’t merely sitting idle for long stretches between uses.
With the peer-to-peer Dozr platform, the company takes a commission from a price negotiated between the parties involved in the rental, and Dozr provides standardized contracts, makes the payment method seamless, and also provides a ratings system.
The company plans to add a video component to the platform, so that contractors can post a video of their equipment in action for prospective renters.
Founded in June 2015 by Kevin Forestell, Erin Stephenson and Tim Forestell, has served more than 2,200 customers across Canada, facilitating the short-term rental of over $200 million worth of equipment.
Co-founder Forestell came up with the idea while working as a construction contractor, having built a successful landscaping business in Guelph, and noticing that most bulldozers and excavators sit idle when they’re not out on a job, which made the Dozr model an ideal match for the sharing economy.
Forestell talked the idea over on a beach while vacationing in a short-term rental property with his wife, co-founder Erin Stephenson, realizing that they could apply the same model to heavy equipment.
Stephenson now handles the company’s marketing and Forestell’s brother Tim, also a co-founder, is Dozr’s CCO.
Dozr is currently a company-in-residence at the Communitech startup accelerator in Kitchener, where it recently took top prize at the the Rev Centre Stage competition.
Dozr has gone through both the Communitech Rev program, aimed at product-ready startups that are focused on sales and marketing, and Google for Entrepreneurs.