Note: This post is an excerpt from a larger report being created by Kabri Construction Research. Thanks to ADL Ventures for contributing some of their construction startup data. Over the last 20 years, software and technology startups have become increasingly important and influential (of the 10 most profitable companies on the Fortune 500, 3 are internet startups, with 5 others from earlier tech startup eras.) But it’s unclear to what extent this trend is occurring in construction. On the one hand, stories of construction startups securing huge rounds of venture capital seem to be
Blackhorn Ventures, currently listed as having made nine investments in the built environment space, has actually made more than 20 investments in construction tech companies. Blackhorn has invested in multiple software startups targeting digitization of the construction sector, including Briq, Rhumbix and Drawboard: in FinTech companies targeting the construction sector, including Alpha Ledger and CoFi, In InsurTech startups like Safehub and Foresight, and in capital-efficient, high growth margin pre-fabrication companies, including Modulous in the UK, and Agorus, Toggle and Hyperframe in the US.
Super interesting. Interesting to me that there wasn't any startup funding in the early 2000's boom, prior to the recession. This actually gives me some hope that the new funding is a real shift in potential.
But compared to crypto, it is still frustratingly low. I agree the ADU numbers seem small. (FYI I have seen Boxabl founders tweet that they raised $60 mil. And they just started accepting non-accredited investors.)
This was interesting, and I can appreciate the challenge associated with defining some of these categories. Reading through some of the service descriptions I'm getting memories of the late 90's dot-com craze. My sense is that there isn't much room for disruption on the bricks & mortar front because industry incumbents operate on tight margins already. Software firms probably have the most opportunity because of low overhead and the possibility of getting subscription revenue from construction and A/E firms for a long time---provided their products are effective.
Very interesting data, thank you. Australian 2021 procurement IPO Felix had local start-ups Buildxact, SiteMate, Mastt, Portt and VenderPanel with competing platforms. In the UK Pagabo launched a procurement platform in 2021, mainly for the public sector, using framework agreements for building work valued between £250k to £10m See https://gerard-de-valence.blogspot.com/2021/03/construction-tech-on-move.html.
Good summary, Brian. I might add an investment category of volumetric modular, which is somewhat represented by Blokable, who started out as a more agnostic modular construction solution, then pivoted to developing. I'm thinking FullStack Modular, BoxHaus (YC), Connect Homes, Kasita, and maybe a couple others, all of whom, I believe got to A rounds. But overall, it's indeed a brutal history, a lot of which, as you allude, being driven by unrealistic venture expectations. I'd add startup hubris as a contributing factor, with a lot of well-funded founders coming out of incubators,, believing the TC articles about the construction tech revolution, wholly unaware of the smell of their own sh#t. In every case, that hubris is vanquished when they try to build something and are stopped by rinky-dink local real estate forces, which are backed by billions of patient, low-expectation dollars.
Blackhorn Ventures, currently listed as having made nine investments in the built environment space, has actually made more than 20 investments in construction tech companies. Blackhorn has invested in multiple software startups targeting digitization of the construction sector, including Briq, Rhumbix and Drawboard: in FinTech companies targeting the construction sector, including Alpha Ledger and CoFi, In InsurTech startups like Safehub and Foresight, and in capital-efficient, high growth margin pre-fabrication companies, including Modulous in the UK, and Agorus, Toggle and Hyperframe in the US.
Super interesting. Interesting to me that there wasn't any startup funding in the early 2000's boom, prior to the recession. This actually gives me some hope that the new funding is a real shift in potential.
But compared to crypto, it is still frustratingly low. I agree the ADU numbers seem small. (FYI I have seen Boxabl founders tweet that they raised $60 mil. And they just started accepting non-accredited investors.)
This was interesting, and I can appreciate the challenge associated with defining some of these categories. Reading through some of the service descriptions I'm getting memories of the late 90's dot-com craze. My sense is that there isn't much room for disruption on the bricks & mortar front because industry incumbents operate on tight margins already. Software firms probably have the most opportunity because of low overhead and the possibility of getting subscription revenue from construction and A/E firms for a long time---provided their products are effective.
Very interesting data, thank you. Australian 2021 procurement IPO Felix had local start-ups Buildxact, SiteMate, Mastt, Portt and VenderPanel with competing platforms. In the UK Pagabo launched a procurement platform in 2021, mainly for the public sector, using framework agreements for building work valued between £250k to £10m See https://gerard-de-valence.blogspot.com/2021/03/construction-tech-on-move.html.
Good summary, Brian. I might add an investment category of volumetric modular, which is somewhat represented by Blokable, who started out as a more agnostic modular construction solution, then pivoted to developing. I'm thinking FullStack Modular, BoxHaus (YC), Connect Homes, Kasita, and maybe a couple others, all of whom, I believe got to A rounds. But overall, it's indeed a brutal history, a lot of which, as you allude, being driven by unrealistic venture expectations. I'd add startup hubris as a contributing factor, with a lot of well-funded founders coming out of incubators,, believing the TC articles about the construction tech revolution, wholly unaware of the smell of their own sh#t. In every case, that hubris is vanquished when they try to build something and are stopped by rinky-dink local real estate forces, which are backed by billions of patient, low-expectation dollars.