Last Week in ConTech - 4 March 2024
Zacua Ventures raises a new construction tech fund
In this issue there are:
20 Startup Fundings
9 Policy and Regulatory Changes
1 New investment funds
2 Acquisitions
9 News articles
Reading time: 13 mins
If you have any feedback or tips on information I should include in the newsletter, please provide it in this form. Thanks Omar Zhan for the idea.
Startup Funding
Mapping & Surveying
Exodigo, an Israeli startup, raised $105m in Series A funding. They use ground penetrating radar and sensors to create detailed underground maps for utility companies, transportation and construction companies and city planners. More here.
[Hiring - 2 role in Operations, 1 role in Finance, 2 roles in Sales, 3 roles in HR, 1 role in Support, 2 roles in Software, 4 roles in Other]
Procurement
Parspec, a Californian startup, raised $11.5m in Seed funding. They streamline the procurement process for construction materials with their platform assisting with product selection, quoting, submittal preparation and use AI to identify specification compliant products. They have initially focused on lighting and electrical products. More here.
[Hiring - 1 role in Sales]
Bandhoo, an Indian startup, raised ~885k in funding. They support large contractors with procurement and project reporting, small contractors with winning work and laborers with finding new jobs based on their location and wage preferences. More here.
Digital Twin
Looq AI, a Californian startup, raised $2.6m in Seed funding. They develop AI enabled digital twin technology for critical infrastructure digitization and diagnosis. The solution helps surveyors, engineers, contractors and asset owners map physical infrastructure with survey grade accuracy. More here.
Training
Moonhub, a London startup, raised $1.4m in funding. They are developing a virtual reality based interactive training solution and platform to support employee upskilling and environment preparation. More here.
Notes:
VR based training solutions are considered a key way of upskilling for the construction industry and enhancing safety onsite by simulating the construction environment.
This funding round included Pi Labs, a VC firm which invests in solutions for the built environment, indicating that the company is exploring this sector.
This is Pi Labs investment memo from when they first invested in Moonhub 1 year ago.
Heat Geek, a UK startup, raised $4.6m in Seed funding. They operate a community of heating engineers and developed a digital platform providing training, digital surveying and system design process. More here.
[Hiring - 1 role in Software, 1 role in Design, 1 role in Support]
Notes:
Heat Geek run an active heating engineer community and a youtube channel with ~50k subscribers.
This is a trend across industries. Companies build niche and specialized professional communities which monetise via education and training courses.
Another example is Nexus Labs, a community for Smart Building professionals.
This community playbook can be applied to many design specialties in the industry.
Monitoring
AiDash, a Californian startup, raised $50m in Series C funding. They provide a satellite platform for infrastructure operations and maintenance using AI to spot fire and weather risks to increase infrastructure climate resiliency. More here.
World View, an Arizona startup, raised an undisclosed amount of Series D funding. They provide remote sensing and Earth observation capabilities using remotely navigated stratospheric high-altitude platforms to observe an area for up to 45 days. More here.
[Hiring - 11 roles in Other]
Note:
This solution flies 5x closer to Earth than a satellite capturing high resolution imagery in greater detail.
It can persist over an area for weeks at a time providing a clearer picture of changes on the ground vs a satellite which flies over an area at the same time every day.
There are applications for this solution for construction progress monitoring for remote and longer term observation.
Connected, a Portuguese startup, raised $2.2m in funding. They use satellites to provide internet connectivity in remote areas focusing on providing affordable NarrowBand Internet of Things (NB-IoT) connectivity. More here.
[Hiring - 1 role in Software, 4 roles in Other]
Notes:
IoT refers to the network of physical objects - ‘things’ (such as infrastructure/buildings) - that are embedded with sensors or software with the purpose of connecting and exchanging data with other devices and systems over the internet.
NB-IoT has been developed specifically for IoT, especially for long-term low-energy, relatively low-speed use cases. It provides the ‘connection’ layer.
Sensors can connect and exchange data using NB-IoT in remote areas, inside builds and underground facilitating monitoring of assets in remote or challenging areas traditional terrestrial networks do not cover.
Examples of use cases for NB-IoT are underground sensors for water management.
Building decarbonization
AtmosZero, a Colorado startup, raised $21m in Series A funding. They make modular electric boilers which take the heat in the air that’s already there and turn it into decarbonized steam which is used across the built environment and industries. More here.
[Hiring - 1 role in Finance, 4 roles in Other]
Alternative site energy systems
GeoPura, a UK startup, raised £56m in funding. They sell green hydrogen powered generators to customers that require power at temporary sites, long term backup, off-grid power, and energy supply to augment existing grids and have found traction in the construction and events industry. More here.
[Hiring - 7 roles in Other]
Construction Robots
RobCo, a German startup, raised $42.5m in Series B Funding. They develop robot automation solutions for repetitive tasks using a vertically integrated hardware and software platform to easily configure and manage robots remotely. More here.
Notes:
RobCo develops modular robot arms (made up of 7 or 8 pieces) with each piece providing varying payload capacities and ranges.
These pieces can be assembled as required for the task at hand (think lego blocks).
They have developed a ‘low code’ software platform which allows operators to program the robot arms without needing to write code.
It makes it easy for operators to reconfigure and reprogram the robot for a new task as requirements shift allowing maximum utilization of the arm.
The solution has found strong traction in the manufacturing sector specifically for small/medium sized enterprises which cannot afford specialized robots.
The flexibility and configurability of the solution (can be rebuilt and repurposed easily) means it could be used in construction for a variety of repeatable tasks.
Project Management
Xergy, a Scottish startup, raised $3.9m in Series A funding. They are building an end to end project management solution for complex projects which is used by the energy and engineering industry. More here.
[Hiring - 3 roles in Sales, 1 role in Product, 1 role in Operations, 1 role in Software, 3 roles in Other]
BoondManager, a French startup, raised €32m in funding. They provide a project management tool which helps consulting and engineering companies manage projects, track invoices, handle prospecting and monitor expenses. More here.
Safety
Intenseye, a New York startup, raised $64m in Series B funding. They provide workplace safety software using AI and computer vision to provide safety alerts to prevent accidents for a range of industries including building materials. More here.
[Hiring - 2 roles in Sales, 2 roles in Software, 3 roles in Support]
Materials
QuickBlock, a Scottish startup, raised €1.3m in funding. They develop recycled plastic construction blocks. More here.
[Hiring - 1 role in Sales]
Generative Design
Collov AI, a Californian startup, raised $10m in Series A funding. They are building a generative design tool for cabinets able to generate bespoke designs in seconds. More here.
Permit/Rebate Applications
Pronto Housing, a New York startup, raised $3m in funding. They streamline the resident qualification process for affordable housing making it easier to apply for a new building and complete the annual recertification process. More here.
Other
Flexnode, a Maryland startup, raised $9m in Seed funding led by Zacua Ventures. They build and operate high performance, AI ready data centers using liquid cooling technology to reduce energy use and carbon footprint using a kit of parts approach. More here.
Related:
Logan Energy, a Scottish startup, raised £5m. They design, build and install hydrogen production and refueling stations. More here.
Notes:
As noted in previous issues, a large amount of startup funding is allocated towards the design and delivery of electric charging infrastructure.
This company is the first I have seen applying this approach to hydrogen charging stations.
Related:
Policy and Regulatory Changes
Superfund sites are locations polluted with hazardous materials.
Thousands of contaminated sites exist due to hazardous waste being dumped, left out in the open or improperly managed.
The funding has allowed the EPA to initiate clean ups at every single Superfund site where construction is ready to begin.
In addition to funding cleanup construction work, the investment allows the EPA to increase funding for and accelerate essential work needed to prepare sites for construction.
Biden administration taps $366M to fund clean energy for Native American tribes and rural areas
The plan will fund solar, battery storage and hydropower projects in sparsely populated regions where electricity can be costly and unreliable.
Board trims 610,000 words from Ohio building regulations
When the new building, mechanical and plumbing regulations go into effect, builders will deal with 15,000 fewer regulatory restrictions.
The reduction was part of the initiative announced in January 2023 to eliminate a third of the Ohio Administrative Code by identifying sections that are unnecessary, no longer used or duplicated.
Related:
Brian Potter (Construction Physics) spoke with Derek Thompson (The Atlantic) on why it’s so expensive to build stuff in America.
“At a very high level, it’s basically a case of we’ve steadily made it more and more difficult to build things in the U.S. with rules and regulations, and have not had commensurate technology and productivity increases that have been able to offset that.”
AI solves nuclear fusion puzzle for near-limitless clean energy
Type One Energy, a commercial fusion energy developer, has announced it’s building its first prototype in Tennessee.
The company plans to invest $233m with construction starting next year.
Notes:
It is important for construction executives to track the progress of new and speculative infrastructure such as fusion reactors.
If the infrastructure achieves commercial viability, funding and investment will rise leading to new project opportunities and business units i.e. unit for the delivery of fusion reactors.
This tracking function is usually facilitated by a Corporate Venture Capital (CVC) unit or through investment in a Venture fund (become a Limited Partner).
It is not uncommon for a designer or contractor to place a strategic investment in an infrastructure startup with the expectation that the startup will involve them in the design / construction process as a partner.
It allows the firm to build exclusive capability in a new sector, gain a business moat and earn revenue from the design / construction work (this also allows the investment to be de-risked and can offset part of the initial investment outlay).
An example is AECOM building capability in hyperloop infrastructure delivery through pilot projects with SpaceX and Virgin One (unclear if they invested in these companies).
If Hyperloop had achieved commercial viability, they would have been best positioned to win further Hyperloop projects. The amount of interest and government funding would have made this a lucrative business opportunity.
Similar opportunities exist with electric and hydrogen charging infrastructure, green manufacturing plants and carbon capture projects.
Florida House Votes to Ease Limits on Teens Working Construction
Florida approved the bill HB 917.
Many jobs in construction are considered hazardous and barred to minors with exceptions for students of government-approved student learner programs or apprenticeships.
The bill is intended to open a pathway for older teens who don’t plan on going to college and wish to pursue work in the trades.
US regulator drops some emissions disclosure requirements from draft climate rules
The SEC has dropped a requirement for U.S.-listed companies to disclose Scope 3 emissions. As a review on the emission scopes:
Scope 1 refers to direct greenhouse from sources controlled or owned by a company.
Scope 2 refers to indirect emissions such as electricity, heating and cooling.
Scope 3 refers to emissions from supplies and supply chains such as organizations supplying goods and services.
Scope 3 disclosures were included in the draft rules published in March 2022.
For most businesses, Scope 3 emissions represent more than 70% of their carbon footprint.
Scope 3 emissions can be quite difficult to measure and understand for organizations (especially in construction) and there has been a rise in investment in solutions in this area.
Toronto rewarded for exceeding provincial housing target by 51 per cent
The Ontario government is providing $114 million to the City of Toronto through the Building Faster Fund as a reward for breaking ground on a total of 31,656 new housing units last year, exceeding its 2023 target by 51 per cent.
To achieve this Toronto has:
Sped up approval times resulting in a reduction of 200 days from the typical process.
Removed the need to preliminary reports.
Set earlier community consultation meetings.
Staff provide comments on application files in 14 days (rather than months/years)
Created specialized teams to approve condo registrations as quickly as in an hour.
Energy Department launches $24M training initiative
The U.S. Department of Energy is launching a $24m initiative to establish new Industrial Assessment Centers.
These centers will train individuals for careers in clean energy, energy efficiency and advanced manufacturing that do not require a four-year degree.
Related:
As discussed in this issue, skilled labor shortages continue to affect the construction industry.
Hands-on climate tech companies are seeking to address the worker shortage by expanding into training and developing climate workers in roles such as construction, solar panel installation and heat pump installation.
Examples are Montamo and VARM
Bike friendly Downtown: See $100 million plan to swap road lanes for pedestrian passages
Columbus is proposing a two mile bike and pedestrian path through the downtown.
The pathway would replace what is now street space inducing parking lanes.
New Funds
Zacua Ventures, a construction tech focused venture capital firm has raised $56m in funding. More here.
In 2023 Zacua was one of the most active early stage investors in the ConTech ecosystem.
Their Limited Partners (companies which contribute capital) include 19 global companies with construction sector ties. This includes Procore, Volvo and Cemex.
Zacua is focusing on startups which target one of their investment themes of productivity, sustainability, and urbanization.
They are looking for startups in these themes that are:enhancing efficiency in the construction industry.
reducing the carbon footprint of construction and building operations more broadly.
contributing to the development of resilient, intelligent structures that are ideally equipped to serve the cities of the future.
Acquisitions
Direct Capital, a PE firm, has acquired Hiway Group, a road rehabilitation company. More here.
Summit Partners, a PE firm, acquired a majority stake in Insurcomm, a Maine provider of commercial and residential restoration services. More here.
News
NoTraffic V2X tech gets US patent approval
NoTraffic, an AI-powered traffic signal platform, has been granted a patent approval for their Vehicle to Everything (V2X) connectivity technology.
V2X technology enables communication between cars and their surroundings including other vehicles, infrastructure, pedestrians and other connected devices.
By enabling communication, V2X technology can be used to provide critical warnings to drivers.
This approval comes at a strategic moment as the US DoT intends to deploy V2X technology across 25% of signalized intersections in major cities within the next two years and 50% within four years to reduce the number of fatalities on US roads.
How To Build A Unicorn In Construction Tech | Patric Hellerman | Construction tech unicorn (Bricks & Bytes Podcast)
Highly recommend this podcast, it is incredibly information dense and my notes took up pages.
Quick highlights included:
Construction accounts for ~10% of the global GDP. In 2019 it accounted for 0.15% of total VC funding and now accounts for 0.4%. This growth should continue with more funding being routed into construction.
The market currently has 17 Construction Tech unicorns (startups valued at over $1b by the private market). This is likely 5-10x less than what the market could sustain.
Before starting Foundamental in 2019, the team did 1 year of diligence. They explored other sectors such as Fintech, Logistics tech and Proptech. Each of these sectors has had large success in terms of capital allocation and founder exits.
They analyzed each sector in terms of how long it took from $5b to $10b in VC funding then to $50b. The pattern was consistent with it taking 6-8 years to go from $5b in cumulative VC funding to $50b.
In 2019 Construction was at $4.5b in funding. Now we are at $30b.
Other valuable topics of conversation included:
The model of existing unicorns in ConTech
The future model of unicorns in ConTech
How you deal with failing companies (orphans)
The brutality of needing to being profitable fast
Climate risk planning portal from Argonne National Lab gets new features
The Argonne National Laboratory updated their portal to allow users to generate reports on how climate hazards could impact vulnerable populations or infrastructure.
It makes it easier to create climate hazard maps, charts and other visualizations.
The NYC Building Makeover Being Watched Around the Country (Wall Street Journal)
UK Housebuilders could be fined a combined £2.5bn if found guilty of anti-competitive behavior
US Cities Could Be Capturing Billions of Gallons of Rain a Day
Comparing Differences in Building Life Cycle Assessment Methodologies
This discusses the variances on LCA methodologies across geographical regions and impact on the comparability and accuracy of environmental assessments in the building sector.
The single biggest mistake that many #aec firms are making with their innovation strategy (Linkedin Post by KP Reddy)
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.