The construction industry continues to tackle the challenges of rising construction materials costs, a skilled labor shortage and overall lack of productivity improvements, offering an expansive opportunity for disruption. Which means there’s a new darling for venture capitalists as they funnel an unprecedented amount of capital into Construction Technology.
A massive amount–$1.05 Billion—that’s the record number venture capitalists invested in global construction technology (ConTech) startups in the first half of 2018. Investment volumes in 2018 are already up nearly 30 percent over the 2017 total—and there’s still another six months left in the year.
Startups are the name of the game; our research uncovered three primary focus areas:
- Collaboration software. Considering that dozens of professionals can be working on a given construction project at the same time, leveraging cloud-based software to optimize the workflow could profoundly improve collaboration and impact the bottom line. Front-runners such as Procore Technologies, PlanGrid and Flux Factory are utilizing cloud capabilities, mobile platforms and dedicated design software to enable collaboration.
- Offsite construction. As skilled construction labor becomes harder to find and general competition for construction inputs heats up, offsite construction startups are championing a different approach: building component manufacturing. Offsite manufacturing and delivery of finalized components to the construction site equals shorter assembly time and more centralized production to help offset the labor pinch and rising costs. Industry leaders include Katerra, Blu Homes and Project Frog.
- Big data and artificial intelligence (AI). From materials delivery to equipment maintenance, predictive data and automation tools can collect data on nearly every aspect of a construction project, resulting in a significant amount of knowledge at risk of going to waste. Armed with big data and AI software, construction teams can make more informed business decisions to save time and money by extending the life of expensive equipment, reducing worksite risk and automating simple business processes. Top startups in this area include Uptake Technologies, Flux Factory and SmartEquip.
To read the entire report on the state of construction technology, click here.