Last Week in ConTech - 29 April 2024
Acquisition season
In this issue there are:
14 Startup Fundings
9 Policy and Regulatory Changes
8 New National Infrastructure Projects & Priorities
1 New investment funds
6 Acquisitions
8 News articles
Reading time: 15 mins
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Startup Funding
Building Decarbonization
Infogrid, a London startup, raised $13m in Series B extension funding. They are developing a smart building platform for facilities and building management which integrates sensors and data analytics to monitor and improve energy usage. More here.
[Hiring - 1 role in Support, 1 role in Software, 1 role in Product, 1 role in Other]
Accacia, a Singaporean startup, raised $6.5m in pre-Series A funding. They are building a platform to provide real estate developers, asset managers and owners with key metrics and decisions required to decarbonize their portfolio by integrating with existing property management, energy management and procurement systems to automate real time data capture and tracking. More here.
[Hiring - 1 role in Product, 1 role in Sales, 1 role in Design, 3 roles in Marketing, 4 roles in Other]
Logistics & Supply Chain
Veyor Digital, an Australian startup, raised $2.75m in pre-Series A funding. They provide logistics software for the construction industry and loading docks by aiding construction supervisors and engineers with scheduling deliveries and product handling through driver location tracking, safety procedures, permitting and automated access controls across security systems and boom gates. More here.
Pipedream, a Texas startup, raised $13m in Seed funding. They are constructing an underground logistics network for the delivery of goods to customers quickly and cheaply. More here.
[Hiring - 1 role in Sales, 3 roles in Other]
Notes:
This is the coolest thing I learned this week. Pipedream has a goal to make hyperlogistics, where people in a city can receive things in under 10 minutes for less than a dollar, a reality.
The have successfully piloted a mile long in city test network which delivers goods from a retail store to an office building through an underground pipe.
The funding will be used to begin construction on the first large scale middle mile network in a city.
Roads
10Lines, an Estonian startup, raised €1.5m in funding. They are developing autonomous pavement marking robots. More here.
Notes:
Lines need to be painted more often as this is critical infrastructure for autonomous cars.
This need has led to M&A and consolidation in the road marking industry.
Alternative Power Sources
Exowatt, a Miami startup, raised $20m in Seed funding. They have developed a modular energy platform to power energy intensive data centers. More here.
Notes:
Exowatt’s solution P3 consists of a modular 3 in 1 system with a heat collector, heat battery and heat engine capable of providing dispatchable power and heat throughout the day.
The modules are designed to fit in the space of a standard 40-foot shipping container to be deployed on small and large commercial and industrial projects and can be easily scaled.
This solution could be utilized to provide a source of clean energy for construction sites
Sourcing
Diagon, a San Francisco startup, raised $5.1m in Seed funding. They are developing an equipment sourcing and procurement platform for specialist machinery for the manufacturing industry. More here.
[Hiring - 2 roles in Other]
Notes:
As discussed in this newsletter, a large amount of government funding has been directed towards the onshoring of manufacturing capability to western nations away from China. Key regulation includes the CHIPS Act to grow the local US semiconductor manufacturing sector.
This is resulting in a major amount of work for industrial construction which requires highly skilled labor.
These newly constructed factories require specialist process and automation equipment which are difficult to identify, source and find. Often the sourcing is left to an engineer who will use the equipment but has no background in procurement leading to poor outcomes.
The Diagon platform assists with the buying process for manufacturing factories as well using AI to answer questions such as ‘what infrastructure is required to become a qualified iron-based battery provider in the U.S.?’
This tool could be a valuable add on service for an industrial contractor providing their clients with knowledge, sourcing and procurement of specialist manufacturing equipment and infrastructure.
Monitoring
Radical, a Seattle startup, raised $4.5m in Seed funding. They are developing a high altitude solar powered autonomous aircraft which can be airborne for months and can perform tasks such as high altitude imagery and mapping and providing mobile cellular service. More here.
[Hiring - 1 role in Sales, 5 roles in Other]
Notes:
This solution provides persistent airborne infrastructure.
It is valuable for remote construction sites where a premium is paid for site monitoring and the provision of broadband and mobile connectivity.
Space
PLD Space, a Spanish startup, raised €78m in funding. They develop reusable rockets and will use the funding to construct their own launch site which will be the largest private spacetech infrastructure in Europe. More here.
Notes:
As the race for space begins in earnest, investment in the design and construction of spaceport infrastructure will rise.
Traffic Management
Fotokite, a Swiss startup, raised CHF$10m in Series B funding. They provide drones for emergency, disaster and public safety response such as traffic management and traffic flow control including bottleneck identification and prevention as well remote infrastructure security monitoring. More here.
[Hiring - 3 roles in Software, 2 roles in Support, 1 role in Operations, 1 role in Other]
Electrification
Camion, a London startup, raised €2.7m in pre-seed funding. They are developing a data and analytics platform for real estate owners and infrastructure developers to discover and develop EV charging locations by indexing properties based on their readiness and potential for electrification. More here.
[Hiring - 4 roles in Software]
Grid Infrastructure
Texture, a New York startup, raised $7.5m in Seed funding. They are building a data collection and sharing platform for renewable energy by developing and connecting APIs to distributed energy networks (chargers, generators, batteries) to assist with monitoring and maintenance plans and virtual power plants. More here.
[Hiring - 2 roles in Software, 1 role in Design]
Notes:
A focus in the energy transition has been the delivery of new infrastructure to the energy grid such as solar, batteries, chargers etc.
While we have made delivery cheaper and affordable, to unlock the benefits we must aggregate the energy sources and integrate them into the wider energy network.
This platform simplifies communication between the variety of new infrastructure which has been built by different manufacturers who often have not incorporated API access into their systems.
Parking
Outpost, an Austin startup, raised $12.5m in Series A funding. They manage secure parking facilities for semi-trucks and trailers across the US including fleet positioning and drop yard services. More here.
Notes:
There is currently only 1 parking space for every 11 trucks on the road with drivers spending up to 1hr a day to find parking.
In 2023 the company opened 10 new fleet yards and is expected to double the number of properties under management in 2024 with anticipated growth to be fueled by direct acquisition of real estate.
This is interesting because Outpost are in some areas a real estate developer, designing and constructing parking spaces and placing a software layer on top to assist with parking management.
This allows existing freight companies to use Outposts transportation infrastructure as a flexible and scalable part of their existing network.
Other
Halcyon, a San Francisco startup, raised $10.8m in seed funding. They are building a new data intelligence and AI powered search service for energy transition work to help professionals find valuable new sources, understand shifting market dynamics and answer complex questions quickly. More here.
Notes:
The Halcyon platform is designed to provide an unprecedented amount of market intelligence.
An example use case is the ability to sort through unstructured information such as public utility commissions and energy regulator releases.
This is important as having access to better and higher quality information sources creates an opportunity for innovation, new insights and improved decision making as data aggregation platforms can shape our access to information.
For contrarian opinions, for new entrepreneurial ideas, we need easier access to unique data sources which allows for novel insights and diverse perspectives.
One way of doing so is by accessing and aggregating new datasets using AI.
Policy and Regulatory Changes
Biden Bans the Use of Fossil Fuels in New Federal Buildings (US)
Fossil fuel use will be banned in new federal buildings starting in 2030.
New federal buildings constructed between 2025 and 2029 must achieve a 90% decrease in fossil fuel consumption, relative to 2003 levels
Those built or substantially renovated from 2030 onward must have no on-site fossil fuel use.
DOE sets 2-year deadline for federal transmission permitting, cutting average timelines in half (US)
It currently takes 4 years to get new transmission lines approved and built.
The new Coordinated Interagency Authorizations and Permits program (CITAP) will streamline coordination across agencies and make the DOE the lead agency between developers and the government.
CITAP sets a binding 2 year time limit for agencies issuing authorizations and permits and is aimed at achieving the Biden administration’s goal of upgrading 100,000 miles of transmission lines in the next five years
Related:
The Bureau of Land Management adopts categorical exclusions to expedite geothermal energy permitting (US)
Two existing categorical exclusions have been adopted by the agency to expedite the review and approval of geothermal exploration proposals.
Under the National Environmental Policy Act (NEPA), categorical exclusions define activities that as a whole have been determined to pose no significant risk to the quality of the human environment.
These exclusions can alleviate the need to prepare an environmental assessment as part of the permitting process and only apply to exploration operations on public land.
New York Secures First US Rebates for Energy-Efficient Appliances (US)
The US DOE has approved the provision of rebates for heat pumps and other climate friendly appliances for New Yorkers.
Low and moderate-income households with earnings under 150% of their area’s median annual income are eligible for up to $14,000 in rebates.
The U.S. just changed how it manages a tenth of its land (US)
The Bureau of Land Management (BLM) will auction restoration leases and mitigation leases to entities with plans to restore or conserve public lands.
This will allow developers or users to offset impacts their activities have on public lands managed by the BLM.
This makes it easier to deliver energy infrastructure on public land.
Notes:
An example use of this lease is ‘if a proposed transmission line across public lands would impact imperiled bird species.’
Here, the BLM could consider an application for a mitigation lease to conserve the bird’s habitat on public lands.
The lease would identify conservation measures that address the unavoidable impacts to the bird species and would help ensure that these measures remain effective for the duration of the transmission line’s impact.
How to get a Net-Zero Building Stock: Q&As on the Recast Energy Performance of Buildings Directive (EU)
This article is a great breakdown on the Recast Energy Performance of Buildings Directive by the EU and what each of the terms means.
New OSHA Rule Allows Union Reps on Non-Union Job Site Inspections (US)
The new rule taking effect on May 32 will allow union representatives to accompany federal safety inspectors on non-union employers’ job sites.
The rule is designed to clarify workers’ rights to have representation during OSHA (Occupational Safety and Health Administration) inspections on all job sites, whether they are union or non-union.
Workers may authorize another employee to serve as their rep or a non-employee third party. That third-party rep has been expanded to include a rep of a labor union, an attorney or someone else of the employee’s choosing.
Colorado and Denver sued for allegedly violating federal laws on large-building energy standards (US)
Both states have implemented energy standards for large buildings which reduce emissions.
The lawsuits argue that they have violated federal laws prohibiting states and cities from setting more stringent energy use standards for appliances and building equipment than those set by the federal government.
Notes:
Building emission reduction regulation is increasingly being litigated in the US.
It has forced states and cities to be thoughtful in how they apply the regulation (hard target, performance standards, bans etc) to ensure compliance with federal / state laws and avoid litigation.
It is unclear yet what the best methodology for applying regulation and minimizing lawsuits is.
DOL will raise overtime salary threshold to $44K in July, $59K next year
The US Department of Labor will increase the minimum annual salary threshold for overtime pay eligibility.
Starting July 1, the threshold will increase from $35,568 to $43,888 per year
On Jan 1 2025 it will increase to $58,656.
The threshold will then automatically update every three years using current wage data
This change will expand overtime pay eligibility to millions of U.S. workers and the regulatory change must be considered by construction employers.
National Infrastructure Projects & Priorities
Global
Record year for wind energy shows momentum but highlights need for policy-driven action
Total installation of 117GW of Wind energy capacity in 2023 represents a 50% year-on-year increase from 2022.
54 countries built new wind power with the top 5 markets being China, US, Brazil, Germany and India.
The wind industry must triple its annual growth from a level of 117 GW in 2023 to at least 320 GW by 2030 to meet the COP28 and 1.5C degree pathway targets.
Related:
US
Materials Supplier Ferguson Seeks Faster Path to Construction Market
Ferguson, one the largest plumbing and heating materials distributors, is adding 3 warehouses in the US.
This will enhance its ability for rapid delivery to professional contractors.
Notes:
This news is a reflection of shifting demand across the construction industry sectors of residential, commercial, infrastructure and industrial construction.
Overall US construction spending has risen over the last 3 years due to companies building manufacturing plants and data centers (industrial sector).
On the other side, residential construction has slowed due to higher interest rates affecting buyers and commercial construction (offices) has been impacted by WFH.
Material distribution firms are now targeting the industry and infrastructure market where the firms manage larger projects (dissimilar to the residential sector).
To serve this new customer, Ferguson is restructuring its supply chain, opening smaller (350,000 to 750,000 square feet), highly automated warehouses closer to population centers to fill orders for pickup and delivery on a tight turnaround.
These market distribution centers carry more inventory than stores and include lockers where customers can pick up their orders at any time of day or night.
Related:
Home Depot is buying a Roofing Distributor in Deal Valued at $18 Billion Including Debt
This is aimed at bringing in more business from big contractors and construction firms.
Interior unveils plans for up to 12 offshore wind lease sales through 2028
The US Department of the Interior has unveiled a 5 year offshore wind leasing schedule.
There are plans for the Bureau of Ocean Energy Management to host up to twelve sales in the Atlantic, Gulf of Mexico, Pacific, and waters offshore U.S. territories.
$12B Vegas-to-California rail project breaks ground
Construction has begun on the Brightline West high-speed passenger rail line between Las Vegas and the Los Angeles area.
The train will reach 200 miles per hour which will be the first high speed rail line in the US.
The project was awarded $3b in funding from Biden’s Infrastructure Bill.
Europe
EU lawmakers back law to boost domestic clean tech production
The Net Zero Industry act ensures that the EU produces 40% of its renewable energy, fuel cell and other green technology needs within its borders.
This is to help Europe’s industry compete with the US and China.
The act proposes streamlining the granting of permits for projects that boost EU manufacturing, ensuring most are issued within six to nine months.
Notes:
As discussed in this issue there is a growing onshoring of manufacturing capability.
Countries are supporting this by introducing regulation to protect domestic companies from overseas competition and using sustainability as a lever.
This is resulting in an increase in the deployment of industrial infrastructure with companies in this sector receiving increased work.
India
India’s 1st bullet train set to run in 2026
The objective is to develop a high frequency mass transportation system through construction of a high speed rail between Mumbai and Ahmedabad using Japan’s Shinkansen technology.
Investing in Tamil Nadu: Manufacturing Outlook and Opportunities
Tamil Nadu is expanding electronics manufacturing capabilities and aiming to become the “Electric Vehicle” capital of the country.
Hyundai, Ola Electric, VinFast are investing in the state with construction starting on factories.
'Construction Cost In India Expected To Go Up By 6% In 2024': JLL
Overall construction cost in India is expected to increase by 6% with Mumbai to be the most expensive.
The high costs are attributed to increased prices of essential construction materials like cement, reinforcement steel, structural steel, and stones.
New Funds
Startup Wise Guys in partnership with SEEDRA Ventures and sponsored by the National Technology Development Program (NTDP), has announced the launch of the first Construction Tech Specialized Fund and Accelerator Program in Saudi Arabia. More here.
Acquisitions
Schneider Electric, a global specialist in energy management and automation, is in talks to acquire Bentley Systems, a company which develops and sells computer software and services for the design, construction, and operation of infrastructure. More here.
Notes:
There has been much commentary on this deal and what this means for the construction tech sector. One of the highlights include notes from Patric Hellerman (Partner at Foundamental) which you can listen to here or read his overview here.
As he stated, if the deal goes through it will combine a leading hardware and services provider with the top software player and would be one of the largest AEC software acquisitions in history.
Bentley provides software for infrastructure and industrial construction sectors both of which have seen growing investment in terms of onshoring and construction of manufacturing plants and investment in infrastructure. For example:
The US is providing $1.2t of funding via the Infrastructure Investment and Jobs Act.
India is spending $150B on infrastructure in 2024 and 2025.
The EU is planning a NextGenerationEU recovery plan.
Due to this Bentley’s products will become increasingly necessary as technology is required to build modern infrastructure projects.
One Click LCA, a Finnish startup which conducts life cycle assessments of materials in construction, is acquiring Buildrz, a French startup which provides a generative AI platform for prospection and feasibility studies for real estate. More here.
ParkHub, a North American provider of parking management software and payments solutions, is merging with JustPark, one of the UK’s leading app-based parking reservations technology and payments platforms. More here.
CoStar Group, a real estate information provider, will acquire Matterport, a provider of digital twins and 3D imaging which can be used for virtual tours of properties and construction progress monitoring, for $1.6b. More here.
Accurant International, a technology consulting and investment firm in the energy, power and climate tech sector is acquiring Sentient Energy, a provider of grid solutions including line sensors and analytics software for fault and predictive failure detection and outage prevention. More here.
Quanex Building Products, a manufacturer of engineered materials, components and systems for building products, agreed to acquire Tyman, a UK manufacturer of building products for $976m. More here.
News
How Green Building Regulations Are Shaking Up the French Construction Industry (BCG)
New York’s First Electric Skyscraper Promises Luxury With Lower Emissions (Bloomberg)
Ecuador rations electricity as drought persists in the northern Andes
The drought has depleted reservoirs at hydroelectric plants which produce 75% of power.
Eliminating 'parking minimums' helped U.S. cities. Could it work here? (Canada)
Why are American roads so dangerous?
The ambitions of China’s BYD stretch well beyond electric vehicles
BYD has vertically integrated its supply chain for guaranteeing mineral supply, software development and semiconductor fabrication.
They also run a construction subsidiary which builds new factories.
Blackstone to Buy Britishvolt Site for Massive QTS Data Center
Blackstone’s investments in data centers have increased 10x reaching $100b.
AI is a massive driver of data center demand however power supply continues to be a major barrier to data center development.
Power supply is a major barrier to data center development, constraining new facilities despite soaring demand driven by the AI boom.
Related:
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.