During the first half of 2018, venture capital firms invested a record $1.05 billion in construction technology startup companies, or nearly 30% more than during the same period in 2017, according to a new report from JLL.
Since 2009, VCs have funded 478 ConTech deals totaling $4.34 billion. “The construction sector is on the verge of major disruption, as tech startups tackle head-on the industry’s biggest pressure points,” says Todd Burns, President of Project and Development Services for JLL.
Indeed, JLL put its money where its mouth is when it brought on two Silicon Valley veterans last year to launch JLL Spark, a business that includes a $100 million global venture fund, and is set up identify and deliver new technology driven real estate service offerings.
Its report calls out three areas where ConTech startups are focusing their efforts:
- Collaborative software, and especially leveraging cloud-based solutions to optimize workflow. Some of the frontrunning startups in this category include Procore Technologies, Flux Factory, PlanGrid, and Clarizen.
- Offsite construction. The building industry can no longer ignore prefabrication and modular solutions at a time when skilled labor is getting harder to hire. Among the new leaders in this category is Katerra—into which Soft Bank has invested $865 million—which is building several new prefab factories, and in recent months has acquired the design firms Michael Green Architecture and Lord Aeck Sargent.
- Big data and artificial intelligence. Predictive data and automation tools are helping construction teams make better-informed decisions to save time and money by extending the work life of equipment, reducing jobsite risk, and automating simple processes. Uptake Technologies is among the startups in this category’s vanguard.