Why Neon Invested In Merlin

The future of B2B software is easy to use and easy to implement. The future has no place for software that needs certifications, consultants, and training to use. Software will learn what people want rather than people learning what software wants.

And I noticed that this is the exact belief Merlin Co-founders Sneha, Kumar & Ayantika had when I first met them.

The Broken World of Construction Industry

Over the last 6-7 years, Sneha, Co-founder of Merlin, worked with many construction and supply chain companies. She chose the ERP software, trained people on it, customised the ERPs, and worked with consulting firms on it and then the final step of implementation.

She observed that construction companies had to adjust according to how the ERP software works, and not the other way round. And the companies were still not able to achieve the desired results.

She could clearly see that this was super painful for customers. Someone has to build a better solution.

A quick snapshot of this painful process: Today, the implementation of legacy ERPs at construction companies is a long, drawn-out process that takes 6-9 months to implement and costs hundreds of thousands of dollars.

And once the implementation happens, companies not only have to spend money on training their people, but they also have to spend large amounts of money on a recurring basis for changes that happen to that software. And for each of these changes they have to train their people again, and the cycle continues.

It’s because these legacy ERPs cater to so many different industries they’ve all become super bloated and complex. They have a complex user experience, which makes training a necessity and implementation a pain.

While I was talking to some of Merlin’s customers, one customer told me that they see these ERPs as black box software. They do not understand what is happening underneath.

And often after struggling with these softwares for months, customers give up. And then go on to start using different horizontal solutions for each use case. But this is also highly inefficient as these individual solutions don’t talk to each other.

““And because of these inefficiencies, businesses don’t have a full picture of their operations, which affects their bottom line. They almost always end up making a small percentage of the contract value. And in some cases, this problem has been cumulatively so severe that a lot of owners have considered shutting down shops.” Kumar Siddhartha, Co-Founder Merlin explained to me during our first meeting.

Expertise+Empathy -> Make a Solution People Want

To make something people want, you need to deeply understand what they want, and have the technical expertise to build that. The co-founders of Merlin – Sneha, Kumar and Ayantika – have the perfect balance of customer empathy and technical expertise.

Sneha, a domain expert, has spent over six years working with various construction and supply chain companies and Kumar & Ayantika bring the technical expertise having worked at companies like AWS, Rippling, Microsoft & Niyo.

At Merlin, they are building a simple and easy-to-navigate ERP, built with all construction use cases in mind, which leverages AI to automate workflows in different verticals.

Their onboarding process is as simple and efficient as their product. They take just a couple of weeks to do the assessment. And there are no extra costs for training, no extra costs for optimisation or any customizations.

All the modules are deeply integrated with each other so that the companies get to know the true profitability at any given point of time. And with these integrations and AI they have built a system of insights rather than a system of records like the current ERPs.

Whereas customers see legacy ERPs as black boxes, with Merlin they come up with feature requests which are already part of Merlin’s PRD(Product Roadmap).

“In some sense, they’re already seeing the picture as we are also moving with them. So that is actually great feedback for us.”, Ayantika, Co-founder Merlin

Neon is Proud to Back Merlin

The US construction industry is a huge market. It makes up 8-10% of the American GDP and employs millions of people. Despite its size, the industry has been slow to adopt advanced technology. This has created a big gap that Merlin is perfectly positioned to fill.

Merlin is building the future of construction. We are excited to support Merlin on their journey to revolutionise how construction companies manage operations and achieve real profits.

Their AI-first approach to ERP for the construction industry aligns perfectly with Neon’s investment philosophy. By reducing the time spent on manual tasks and bubbling up the insights, Merlin’s solution directly impacts profitability, which makes it a compelling proposition for construction companies.

Merlin has been part of Neon Fund’s incubation program, where Neon led the pre-seed and seed round of the company. Neon works as a founding investor and partner during the incubation period and works actively with the company from -1 to 0 and then 0 to 1 phase. We act as a partner that works closely with our partner companies on everything GTM and fundraising. We believe once you have Neon on your side, we take care of introducing you to your seed and Series – A / B investors, and helping you build the right trajectory for $10M ARR company within 3-4 years of our incubation.