flexiblefullpage -
billboard - default
interstitial1 - interstitial
Currently Reading

Construction tech is the new investment darling for VC funds

Building Team

Construction tech is the new investment darling for VC funds

In the first half of 2018, venture capital firms invested $1.05 billion in global construction tech startups, setting a record high.


By JLL | July 30, 2018

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. According to the newly released JLL research report, “The State of Construction Technology,” Silicon Valley investors are stepping in to seize that opportunity. Venture capital funds are funneling unprecedented levels of cash into Construction Technology startups’ pockets. 

In the first half of 2018, venture capital firms invested $1.05 billion in global construction tech startups, setting a record high. The 2018 investment volume is already up nearly 30 percent over the 2017 total, with six months still remaining in the year. To date, the Construction Technology sector has found three Unicorns—startups valued at more than $1 billion—in Katerra, Procore and Uptake. 

“The construction sector is on the verge of major disruption as tech start-ups tackle head-on the industry’s biggest pressure points,” says Todd Burns, President, Project and Development Services, JLL. “These startups can provide technology that helps deliver projects faster, cheaper and with fewer resources than ever before, effectively addressing the existing challenges in the industry.”

Emerging technology is opening a significant opportunity for venture capitalists and construction executives. JLL recognized this opportunity early, and last year brought on two Silicon Valley veterans to launch JLL Spark, a global business that identifies and delivers new technology-driven real estate service offerings, including a $100 million global venture fund.

JLL’s research uncovered three primary focus areas of construction tech startups:

1. 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, Clarizen and Flux Factory are utilizing cloud capabilities, mobile platforms and dedicated design software to enable collaboration.

2. 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 to how buildings are built: 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.

3. 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 data pools 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.

Since 2009, investors have closed 478 Construction Technology funding deals totaling $4.34 billion, underscoring the continued volume of construction projects and the recent urgency to innovate and offset industry costs. The huge bump in Construction Technology investment in 2018 is hopeful proof of an impending surge of technology and hardware marvels, promising to optimize the industry.

Related Stories

Multifamily Housing | Aug 17, 2022

California strip mall goes multifamily residential

Tiny Tim Plaza started out as a gas station and a dozen or so stores. Now it’s a thriving mixed-use community, minus the gas station.

| Aug 10, 2022

Gresham Smith Founder, Batey M. Gresham Jr., passes at Age 88

It is with deep sadness that Gresham Smith announces the passing of Batey M. Gresham Jr., AIA—one of the firm’s founders.

Sponsored | | Aug 4, 2022

Brighter vistas: Next-gen tools drive sustainability toward net zero line

New technologies, innovations, and tools are opening doors for building teams interested in better and more socially responsible design. 

Multifamily Housing | Aug 3, 2022

7 tips for designing fitness studios in multifamily housing developments

Cortland’s Karl Smith, aka “Dr Fitness,” offers advice on how to design and operate new and renovated gyms in apartment communities.

Building Materials | Aug 3, 2022

Shawmut CEO Les Hiscoe on coping with a shaky supply chain in construction

BD+C's John Caulfield interviews Les Hiscoe, CEO of Shawmut Design and Construction, about how his firm keeps projects on schedule and budget in the face of shortages, delays, and price volatility.

Green | Jul 26, 2022

Climate tech startup BlocPower looks to electrify, decarbonize the nation's buildings

The New York-based climate technology company electrifies and decarbonizes buildings—more than 1,200 of them so far.

Building Team | Jul 25, 2022

First Ismaili Center in the U.S. combines Islamic design with Texas influences

Construction has begun on the first Ismaili Center in the U.S. in Houston. 

Building Team | Jul 20, 2022

San Francisco overtakes Tokyo as the world’s most expensive city for construction

San Francisco has overtaken Tokyo as the world’s most expensive city for construction, according to a new report from Turner & Townsend.

Libraries | Jul 20, 2022

Canada to open one of the world’s largest library and archive facilities

When it opens in 2026, Ādisōke is expected to be one of the largest library and archive facilities in the world. 

Energy-Efficient Design | Jul 19, 2022

All is not lost: 3 ways architects can respond to the Supreme Court’s EPA ruling

The U.S. Supreme Court’s ruling to limit the Environmental Protection Agency’s power to regulate greenhouse gas (GHG) emissions from power plants dealt a significant blow to our ability to fight the climate crisis with federal policy.

boombox1 - default
boombox2 -
native1 -

More In Category




halfpage1 -

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021

 


Magazine Subscription
Subscribe

Get our Newsletters

Each day, our editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Subscribe

Follow BD+C: