Last Week in ConTech - 13 May 2024
Are we going to see hydrogen equipment on site?
In this issue there are:
17 Startup Fundings
10 Policy and Regulatory Changes
5 New National Infrastructure Projects & Priorities
1 New investment fund
1 Acquisition
12 News articles
Reading time: 15 mins
If you have any feedback or tips on information I should include in the newsletter, please provide it in this form.
Does the email get cut off by your reading application? You can view the full version online here.
Hi There,
There’s a few new subscribers so here is a quick overview on what the newsletter is.
The goal of the newsletter is to increase the adoption of technology solutions in construction. While we have more startups emerging, software penetration in the industry continues to remain low.
This newsletter aims to achieve this in two ways:
Awareness
Each week we send a newsletter ‘Last Week in ConTech’ which summarizes the most important information in the ConTech ecosystem to help industry professionals stay up to date, be aware of the latest solutions and understand the macro conditions (regulation, national projects) affecting the industry.Education
We aim to provide high quality evergreen educational content (e.g. ConTech best practices series) which helps engineers implement solutions and understand how to increase the absorption of technology within their organizations.
About myself
I’m Bhragan, a civil engineer at AECOM. I’ve been a part of the startup investment team and I’m currently seconded as an Innovation Advisor to HIVE, an innovation incubator in the Level Crossing Removal Project in Australia.
Prior to this I developed applications and MVPs for startups and delivered software education and upskilling programs.
Startup Funding
Sustainable Materials
AlterBiota, a Canadian startup, raised CAD$4m in seed funding. They produce a biographene liquid concrete additive that is 10% to 25% stronger than Portland cement and is made by taking the wood byproduct from sawmills. The funding will be used to upgrade their manufacturing facility. More here.
[Hiring - 1 role in Civil Engineer, 1 role in Mechanical, 1 role in Other]
Materials
Soil Link, a UK startup, raised Seed funding (undisclosed). They are developing a material exchange platform which helps the construction industry reuse and recycle soils and aggregates. More here.
Inspections
Checkfirst, a Portuguese startup, raised $1.5m in funding. They automate the process of remote inspections and audits by offering a tool which helps with compliance and scheduling of inspections. More here.
Xtend, an Israeli startup, raised $40m in funding. Their solution makes it easier for operators to manage and control advanced robots, particularly drones (individually and in groups) which enables the performing of precision tasks and maneuvers in complex indoor and outdoor environments which usually requires highly skilled operators. They have gained interest in the critical infrastructure inspection sector. More here.
[Hiring - 2 roles in Other]
Drones
Dendra Systems, a UK startup, raised £12.5m in Series B funding. They use AI and drones for environmental management, ecological restoration and analysis including using drones to provide aerial seeding services. More here.
Notes:
Drone seeding technology could replace Hydroseeder trucks.
These trucks have mounted booms (cannons) which can spray seeds and water ~100m.
Drones, which can have planned routes, offer a scalable alternative which provides consistent seed coverage.
Lucid Bots, a North Carolina startup, raised $9.1m in Series A funding. They provide and build robots to tackle ‘dirty’ jobs people don’t want to do, including offering a drone to clean windows in tall buildings and a pressure washing robot for sidewalks. More here.
[Hiring - 2 roles in Sales, 1 role in Support, 1 role in Marketing, 1 role in Software, 1 role in Other]
Financials
Outpave, a Texas startup, raised $1.2m in Seed funding. They offer a spend management solution for the trade and construction sectors offering elements to streamline bank connections, track expenses, and provide efficient invoice management. More here.
Building Decarbonization
Pascal, a Massachusetts startup, raised $8m in Seed funding. They develop high-efficiency climate friendly heat pumps, air conditioners and refrigerators which are based on solid refrigerants rather than gaseous and improve energy efficiency while reducing emissions. More here.
Electric Infrastructure
EnviroSpark, an Atlanta startup, raised $50m in funding. They design, install and operate EV charging stations for commercial and public properties. More here.
[Hiring - 8 roles in Sales, 1 role in Construction, 2 roles in Software, 1 role in Finance, 2 roles in Operations, 4 roles in Other]
Related:
NEoT Green Mobility, a Parisian startup, raised €60m in funding. They are a financing partner for e-mobility operators and local authorities looking to switch to electric fleets or infrastructure offering zero emission transportation leasing solutions to public authorities and transport companies. More here.
Notes:
Having initially started with electric fleets, NeOT is starting to offer solutions for the hydrogen sector.
The hydrogen sector is rising as an alternative to electric vehicles due to a number of reasons:
Electrification is applying increasing demand on the grid and impacting power availability (we’re running out of power).
An electric vehicle uses 173 kg more minerals than a conventional car. Demand for key battery minerals are rapidly outstripping supply requiring more mining operations.
There is potential (research is occurring) to retrofit existing diesel equipment with hydrogen engines (electric retrofits are possible as well).
My prediction is that in a decade hydrogen will be seen as a viable alternative fuel source.
This is as electrification is creating a critical stress on grid capacity, we can’t build more transmission fast enough, battery mineral supply chains will become stressed and the US Department of Energy is seeking to reduce the cost of hydrogen by 80% in 10 years.
Charge Zone, an Indian startup, raised $19m in funding. They build high speed public charging infrastructure offering Fleet electrification (B2B) and Inter-City Retail EV charging (B2C) solutions as well as a Charging Management System to capture charger utilization and provide fleet management. More here.
[Hiring - 3 roles in Sales, 1 role in Software, 1 role in Support, 1 role in HR]
Notes:
Charge Zone's diverse solution reflects shifting expectations in the EV charging market.
Their B2C solution caters to the expectation of charging at retail locations like restaurants and shopping centers, rather than centralized fuel depots.
The B2B solution highlights that fleet charging will occur at centralized charging locations.
The charging management system underscores that asset owners now demand clear ROI from their EV chargers, moving away from simply building the infrastructure with an expectation that if they do, people will come.
Logistics Decarbonization
Movener, a Chilean startup, raised $2m in Seed funding. They have developed a ‘ePower Kit’ which converts diesel trucks into hybrid electric vehicles. More here.
Mapping
Xona Space Systems, a Californian startup, raised $19m in Series A funding. They are developing a network of Low Earth Orbit satellites which provide high precision navigation services with accuracy down to 2cm. More here.
[Hiring - 3 roles in Software, 1 role in Project Management, 2 roles in Operations, 3 roles in Other]
Renewable Energy
Pine Gate Renewables, a North Carolina startup, raised $650m in equity funding. They develop, finance, construct and operate utility scale solar and energy storage projects with the funding being used to finance an incremental three gigawatts of clean energy infrastructure by 2025. More here.
[Hiring - 2 roles in Finance, 1 role in Construction, 1 role in Other]
Power Grid
ThinkLabs, a startup spun out of General Electric, raised $5m in Seed funding. They are developing a Copilot which uses the physics of the grid to build a digital twin to general real-time models and analytics for utility operators and assist with grid orchestration. More here.
Other
Stonal, a Parisian startup, raised €100m in funding. They provide a platform to manage commercial and residential properties more efficiently by extracting information from documents and blueprints to create an accurate and up to date database on buildings which can be accessed by stakeholders such as property managers, surveyors and insurers. More here.
[Hiring - 2 roles in Software]
everyone energy, a Berlin startup, raised seed funding (undisclosed). They provide a white label solution to provide customized advisory services on renewable energy solutions. More here.
[Hiring - 2 roles in Sales, 1 role in Design]
Notes:
everyone energy’s solution provides online advice which answers questions about solar systems, heat pumps and battery storage including providing an initial assessment of their economic viability.
It addresses the pain point that while more people are aware of the need to retrofit their properties, finding accurate and information relevant to their circumstances is difficult.
This initial consultation is a loss leader for energy service providers who often can’t provide this due to a shortage of skilled labor. This solution could provide filtered deal flow.
My perspective:
These solutions are great as they serve as top of the funnel lead generation and serve to solve a critical pain point and connect solution providers with vetted customers.
Roofer.com is an example of this in the US where they used AI and computer vision to inspect roofs and reduce the initial assessment cost.
In this case, instead of providing filtered leads they purchased a roofing contractor and began to self perform showing that the competitive threat may not be from incumbents but from new technology entrants to the market.
Policy and Regulatory Changes
Federal Contractors Now Required to Use Sustainable Products & Services
The federal government issues a rule “amending the Federal Acquisition Regulation (FAR)” to “implement a requirement for agencies to procure sustainable products and services to the maximum extent practicable.
This means federal contractors have enhanced obligations to provide sustainable products and services as part of their contractual duties owed to the government.
The world’s most advanced economies just agreed to end coal use by 2035 – with a catch
The Group of Seven nations (Canada, France, Germany, Italy, Japan, the U.K., and the U.S.) stated that they would end the use of “unabated” coal by 2035.
By referring to “unabated” coal, the agreement leaves room for countries to use the fossil fuel past 2035 if their carbon pollution is captured before entering the atmosphere.
Notes:
This will increase the investment in renewable energy infrastructure and storage solutions.
National Interest Electric Transmission Corridor Designation Process (US)
The Energy department has taken a step to unlocking federal financing for transmission projects.
The Secretary of Energy is able to designate a geographic areas a National Interest Electric Transmission Corridor (NIETC) if they find consumers are harmed by a lack of transmission in the area and that the development of new transmission would advance important national interests in that area, such as increased reliability and reduced consumer costs.
A NIETC designation unlocks federal financing tools, specifically public-private partnerships through the $2.5 billion Transmission Facilitation Program and the $2 billion Transmission Facility Financing Program.
A initial list of 10 corridors (covering 3,500 miles) has been proposed
DOE aims to move "FASST" on AI with sweeping new initiative
The DOE has secured $455m for its Frontiers in Artificial Intelligence for Science, Security and Technology (FASST) initiative.
The aim is to use AI to solve mission critical challenges the private sector won’t invest in or can’t invest based on specific US government interests.
It involves developing models tailored to specific applications around science, energy and national security.
The DOE, in partnership with Microsoft, was able to design a new battery material which used 70% less lithium. It served as a proof-of-concept of using AI to speed the discovery process.
Notes:
A number of startups are using AI to enhance the sustainable construction material discovery process.
This initiative emphasizes producing scientific data which helps to develop next-generation AI models which can solve specific problems and scientific challenges.
Record amount invested in bicycle 'highways' (Belgium)
€450 million was invested in the construction and improvement of bicycle highways in Flanders.
This spending is driven by demand from the rapid rise of cyclists on Belgian roads during the pandemic requiring spending to improve safety, policies and infrastructure.
‘Reliable’ coastal resilience funds needed from federal government, NYC mayor says
NYC Mayor is calling for the federal government to create a regular source of funding for coastal infrastructure and resilience projects.
These projects are becoming more important due to the effects of climate change.
This call came as NYC initiated a $200m project to protect lower Manhattan from sea-level rise by elevating Battery Park’s wharf promenade.
EPA offers $41M to fortify stormwater, sewer infrastructure
The US Environmental Protection Agency is offering funds to prepare local stormwater collection systems to handle increasingly intense rain events driven by climate change and prevent polluted runoff from entering natural water systems.
DOE doubles down on $1/kg clean hydrogen, sets sights on additional hydrogen cost targets
The DOE will focus on research, development and demonstration projects which improve the efficiency, durability and cost effectiveness of clean hydrogen production systems.
The plan centers on theDOE’s “Hydrogen Shot” goal of cutting the cost of clean hydrogen production to $1 per kilogram by 2031. It also aims to cut the cost of electrolyzer systems to $250-500/kW, the cost of fuel cell systems for heavy duty transportation to $80/kW, and the final dispensed cost of hydrogen fuel to less than $7/kg.
Notes:
If these goals are achieved hydrogen vehicles will become an alternative to electric vehicles especially in heavy duty transportation (including construction material transportation).
State Budget Approves Elimination of 12 FAR Cap in New York City
Floor Area Ratio” (FAR) is the ratio between the floor area of a building and the “zoning lot” on which it is situated.
The 12 FAR cap is a relic of the 1960s and was instituted when the scale of housing construction in NYC resulted in concerns it would limit development of commercial and mixed-use buildings.
Under certain circumstances (listed in the article), the FAR for residential uses on a zoning lot could exceed 12.
Allow slow-speed minicars on Toronto streets — but not e-scooters (Canada)
Electric scooters are banned in Toronto. As an alternative city staff debted the legalization of ‘low speed vehicles.’
These are four wheeled cars or trucks carrying two to four passengers at speeds up to 40 km/h.
National Infrastructure Projects & Priorities
Mexico
How Mexico’s Presidential Candidates Expect to Leverage Nearshoring
Nearshoring refers to the practice of relocating business operations to a nearby country.
This is benefitting Mexico as US companies are nearshoring their supply chain in response to US-China tensions.
Mexico is recognising this opportunity for economic growth and proposing infrastructure development and policy changes to attract investment.
In another signal, M placed tariffs on steel, plastic imports from countries which they do not have a trade agreement with. This is seen as a response to US concern about Chinese steel and other goods entering the North American country.
Notes:
Global power competition focused on supply chain resiliency and supporting alternative manufacturing capacity is a major tailwind for infrastructure and industrial construction spending.
Related:
Chinese manufacturers have been sending goods to Mexico to maintain access to the US market
China’s containerised exports to Mexico rose 60% in January.
The port of Laredo (on the Mexican border) has overtaken LA in US import volume.
Work is being completed to improve railway infrastructure and connectivity at Mexican ports.
US
Air Conditioning and AI Are Demanding More of the World’s Power—Renewables Can’t Keep Up
In response Big Tech is securing power purchase agreements for to be constructed solar and wind farms to power their data centers.
Microft’s offtake agreement is to develop over 10.5 GW is the largest corporate level PPA, 8x larger than any previous.
Notes:
As electricity demand continues to outstrip supply and governments are unable to invest in construction quickly enough, corporates will continue to step in via offtake agreements.
It remains to be seen if large corporations will consider becoming an asset owner (e.g. Google owns their data centers as it is critical for operations) of renewable energy infrastructure as it becomes critical for data center growth.
Related:
More subsea cables bypass China as Sino-U.S. tensions grow
Growing geopolitical tensions between the U.S. and China have begun to affect the flow of global data due to an expected sharp fall in new undersea cables linking China.
No new projects will connect the country after 2025 as focus shifts to Southeast Asia.
Subsea cables form the backbone of the internet, carrying 99% of the world's data traffic. Roughly 140,000 kilometers of such cables will be completed this year.
In 2020, the US adopted the Clean Network initiative to freeze Chinese businesses out of telecom infrastructure projects.
Oman
Oman’s Hydrom secures $11 billion worth of contracts for green hydrogen projects
With these new contracts, the country’s hydrogen production capacity reaches 1.38 million tons/year.
The funding will be used to develop two projects, one of which will power a single ammonia plant using 4.5 GW of solar and wind energy to deploy an electrolyzer with a capacity of 2.5 GW — surpassing today’s global green hydrogen capacity of 1.5 MW.
Notes:
Oman has been seeking to capitalize on its early entry advantage in the global hydrogen industry.
They sit in a strategic location between two demand centers of Europe and Asia.
This agreement points to a wider strategy in the Middle East and North Africa of offsetting natural gas industry declines with hydrogen production.
A second order effect is increasing spending on hydrogen infrastructure and logistics networks to support the transition.
Australia
Neoen’s Collie battery to be Australia’s biggest after winning new contract to flatten solar duck
Tesla has won a $650m contract to build the largest battery energy storage system in Australia which is one of the largest systems in the world.
Investment funds
Germany is considering launching a €1bn fund for companies which are building first of a kind facilities (FOAKs). More here.
Startups struggle to finance capital intensive infrastructure projects such as direct air capture, energy storage systems or low carbon cement factories.
This is as they often don’t have revenue or are too risky to receive venture funding. Banks are reluctant to offer debt funding unless the tech is proven to work at scale.
Acquisitions
Trimble, an American software, hardware, and services technology company servicing the building and construction industry (amongst others), acquired Flashtract, an Atlanta company which provides technology to streamline payment flows and compliance information between GCs and subcontractors. More here.
News
Why I Changed My Mind About Hydrogen Vehicles
Hydrogen fuel cells make sense in long-haul, heavy trucking and will likely ‘push aside’ electric vehicles.
It makes sense in this context as far fewer fueling stations are required compared to passenger cars.
The state of California estimates it would only need 60 hydrogen stations to meet the needs of long-haul truckers and there is money from the Inflation Reduction Act to pay for it.
Notes
Instead of considering an EV only future it is likely that different types of fuel cells will gain adoption in particular transportation modes.
Trains, ships and planes could all possibly be candidate for hydrogen fuel.
Cemex Ventures kicks off the Construction Startup Competition 2024
EllisDon has announced the launch of applications for their ConTech Accelerator for 2024. More here.
12 types of technology that can make job sites safer (Construction Dive)
Green concrete: Building a solid future
Why Are Heat Pump Sales Decreasing?
In 2023 total U.S. shipments of heat pumps decreased 16%.
In the EU heat pump sales fell last year in 14 countries.
High electricity prices, low natural gas prices and high interest rates are seen as contributors.
AI for Energy: Opportunities for a Modern Grid and Clean Energy Economy (US Department of Energy)
JLL Says AI Demand Turns Data Centers Into ‘Hottest Asset Class’
Uninsurable America: Climate change hits the insurance industry
Two major insurers are stopping offering new homeowner's policies in California highlight the growing portion of America that's becoming close to uninsurable.
This is as the threat of climate change related disasters is driving up consumer costs and putting insurers out of business.
Related:
New Regulations and Incentives Make Green Roofs a Staple in Class A Development Playbook
Will Stone Replace Steel and Concrete? (Construction Physics)
Potential Benefits and Risks of Artificial Intelligence for Critical Energy Infrastructure (US Department of Energy)
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.