If anyone has an inside peek at how the nation’s construction industry is performing, it’s Scott Cannon.
He’s the chief executive of Irvine-based BigRentz Inc., which calls itself the nation’s biggest online marketplace for contractors to rent construction equipment, like how Expedia sells airplane tickets.
When asked how business is nowadays, Cannon replied “mixed results.”
“We’re acquiring new customers at the fastest pace in the last five to six years,” he told the Business Journal.
The company’s customers include 4,000 rental companies, who control about 11,000 yards with equipment to rent.
BigRentz this year will facilitate about 62,000 to 64,000 rentals, almost double the 35,000 rentals it booked in 2019.
The CEO expects his 95 employees will generate about $65 million in sales this year.
Still, Cannon is facing a conundrum.
While construction was going gangbusters this summer, his customers struggled with logistics, materials and inflation. When jobs didn’t get completed on time, backlogs would begin and the equipment wouldn’t move, causing rental rates to skyrocket.
“People are holding onto rentals longer, so utilization is at an all-time high,” Cannon said.
He said utilization isn’t a great indicator of future business and he expects this metric to come down as construction slows in the coming months.
More than anything, his customers are looking for employees.
“It’s hard to find talented people—the labor pool is short, especially in skilled positions,” Cannon said.
Marketing Arm
BigRentz was started by Dallas Imbimbo and Nick Kovacevich, both of whom remain on the company’s board; Imbimbo’s wife, Neda Imbimbo, is chief financial officer.
Among its private equity investors are St. Cloud Capital LLC, a Los Angeles-based private investment firm that provides growth capital to the lower middle market throughout the U.S., and Itochu Corp. (OTC: ITOCF), a Tokyo-based Global Fortune 500 company with assets totaling over $90 billion.
The company’s last reported funding round was in 2020, when it raised $15 million.
BigRentz acts as the sales and marketing arm for small rental companies. The magazine Equipment World compared BigRentz to the Google of heavy equipment rentals, where anyone can find the machine they need to rent.
The company facilitates the rental of anything from a 30-foot boom lift (starting at $210 a day) to bulldozers (starting at $433 a day) to a 30-ton carry deck crane (price quote available).
It also provides market data to suppliers, who previously often used word of mouth to determine local needs.
In May, BigRentz earned what it called “an uncommon achievement in the industry”—ISO 9001 certification, which focuses on quality assurance principles such as customer service.
“I’m incredibly proud of this achievement for our company and of the hard work of our team,” Cannon said. “The commitment and discipline required to achieve and maintain ISO Certification are qualities we regard highly in our company culture.”
The OC Bubble
The original plan in 2019 was for BigRentz to grow to $500 million in annual sales by 2030 and possibly expand to $1 billion—with the right acquisitions.
However, valuations on acquisitions were “out of control” until late last year, Cannon said.
A plan to go public has been placed on hold until markets are more favorable, he said.
“It’s not a robust market for what we do,” he said.
In homebuilding, “the sentiment is terrible” because of rising interest rates.
“People think we’re in a recession,” Cannon said, predicting “a downturn in real estate construction in the next 12 to 18 months.”
Other industries that should be doing well are facing constraints on their supplies, such as conveyer belt companies that cannot find ball bearings.
“Some customers are significantly down year-over-year,” Cannon said. “It’s really hard from where I sit.”
Ironically, his local neighborhood of Newport Beach “has never been busier.”
“We do live in a bit of a bubble that will likely continue in Orange County.”
