Last Week in ConTech - 18 March 2024
We’re running out of electricity and the construction labor to build it
In this issue there are:
14 Startup Fundings
9 Policy and Regulatory Changes
0 New investment funds
2 Acquisitions
10 News articles
Reading time: 14mins
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Startup Funding
Non Destructive Testing
GScan, an Estonian startup, raised €3m in Seed funding. They use muon tomography as a form of non destructive testing to provide detailed 3D imagery of an assets internal structure which provides information for infrastructure maintenance. More here.
[Hiring - 3 roles in Software]
Notes:
GScan is working on a maiden project with the UK National Highways, AtkinsRealis, and Jacobs.
It is to assess the integrity of steel components inside a post-tensioned concrete bridge.
With detailed imagery, engineers can make more informed decisions on the remaining service life of the structure and determine possible repairs instead of complete replacement to reduce cost and extent of traffic disruption.
Quality Assurance
Nanonets, a San Francisco startup, raised $29m in Series B funding. They develop AI to automatically process and understand various types of documents and data for businesses. Construction firms use their software to automate data collection from sources such as construction completion certificates reducing manual effort and streamlining review and approval workflows. More here.
[Hiring - 6 roles in Sales, 3 roles in Operations, 1 role in Product, 8 roles in Software, 1 role in Marketing, 1 role in Finance, 2 roles in HR, 2 roles in Support]
Construction Management
Deep Space, an Australian startup, raised seed funding (undisclosed). They are developing a data integration and automation tool to enhance the efficiency and decision making in construction project. More here.
Materials
Furno, a Californian startup, raised 6.5m in Seed funding. They develop super efficient modular kilns for the cement industry. More here.
[Hiring - 1 role in Other]
Notes:
Furno was covered in the 5 February issue however the funding amount was only released this week.
Allium Engineering, a Massachusetts startup, raised $3.3m in seed funding. They produce longer lasting and cheaper steel rebars. More here (paywall).
Notes:
Steel rebars (reinforcement bars) are used in reinforced concrete structures such as bridges or buildings.
Building Decarbonization
Sealed, a New York startup, raised $30m in funding. They provide software and solutions to contractors to help them install more home weatherization and electrification projects by calculating energy savings for their customers, identifying and guaranteeing eligible government rebates and submitting the rebate applications. More here.
[Hiring - 1 role in Software]
Notes:
There is an increasing amount of incentives and rebates for building electrification projects.
It is difficult for contractors to stay up to date with the changing policies and understand the processing requirements for each one.
Aggregation solutions offer value to contractors as it makes it easier for them to gain customers and reduce administrative tasks.
The home retrofitting market is often overlooked by large contractors given the size of each project and customization requirements vs the commercial market.
It offers an opportunity for startups if they can effectively use tech to standardize processes and deliver retrofits at scale to this market.
See more: The Cloud Installer Model by Foundamental.
Niko, a Mexican startup, raised $3.3m in Seed funding. They offer no upfront cost financing and installation of solar panels for home owners and commercial properties and earn money by keeping a portion of the savings from the energy bills. More here.
[Hiring - 2 roles in Sales]
Notes:
In Mexico, small solar installers handle the majority of installation jobs with little standardization and varying skill levels. This creates uneven results and poor solar adoption.
A bottleneck for Niko’s solution is the availability of construction and trade workers who can install the solar panels. To address this they will need to fund training and upskilling programs.
This issue is not unique to Mexico with similar initiatives being undertaken by climate tech startups in Germany (Montamo and VARM).
More and more the problem is the availability of labor and we will see an increase in the number of startups addressing this skills shortage either through training programs to attract new talent or robotics and automation solutions.
Related:
VCs are eagerly funding startups trying to plug the green transition labour gap
America Is Trying to Electrify. There Aren’t Enough Electricians
Ampeers Energy, a German startup, raised strategic investment (undisclosed). They help commercial property owners with the decarbonisation of their portfolio by analyzing their energy use, designing energetic renovations, implementing and installing the selected design and assisting with operation and billing of the new energy flows. More here.
[Hiring - 4 roles in Sales, 3 roles in Software, 1 role in Support, 1 role in Other]
Autonomous Construction Sites
Applied Intuition, a Californian startup raised $250m in Series E funding. Their software helps companies test advanced driver-assistance systems and automated driving technology more quickly and safely. More here.
Notes:
As we deploy autonomous vehicles and equipment on construction sites, we need to rigorously test the safety of the system and account for edge cases.
As construction is a changing and diverse environment, some edge cases can be difficult to test or are rarely observed on site.
This solution is used by construction and mining firms to reduce reliance on real world testing and allows for the simulation and analysis of thousands of scenarios providing information to expedite the deployment of autonomous equipment on site and inform safety guidelines.
Risk
First Street, a New York startup, raised $33.5m in funding. They have developed a platform to provide detailed insights into the physical climate risks associated with properties including quantifying risk to adjacent infrastructure such as roads or social facilities. More here.
[Hiring - 1 role in Software, 9 roles in Other]
Notes:
Governments usually use consultants to gauge climate risk (e.g. flooding) to existing infrastructure and to develop resilience and mitigation strategies.
Alternative site energy systems
Suiso, a UK startup, raised £3m in funding. They are developing a green hydrogen generator the size of a shipping container which can be placed on site to provide clean energy for factories, hospitals and warehouses. More here.
Notes:
As the composition of the power grid continues to evolve, it is becoming more common for critical infrastructure, (large factories, military bases, data centers and cement plants) to have localized energy producing assets.
These distributed energy assets can also be placed on construction sites to support decarbonization.
Diesel machinery and petrol generators are still commonplace on site (construction machinery emits as much emissions as global aviation).
Hydrogen is a viable clean alternative with diesel-to-hydrogen conversion of existing equipment possible.
A barrier to hydrogen use has been the lack of refuelling infrastructure, however as the industry matures, these solutions will become more commonplace.
Related:
They aim to cut the cost of clean hydrogen to $1/kg by 2031.
Mapping
Fused, a Californian startup, raised $1m in pre-seed funding. They are a geospatial data infrastructure company which cleans data taken from satellites to make it easier to create visual representations of things like weather, deforestation or crop data and integrate it with common applications such as Excel, Airtable or Notion. More here.
Notes:
Accurate, usable and high quality mapping data is valuable for civil design firms.
A common workflow is to use tools such as Nearmap for preliminary design or desktop investigations and ArcGIS to create custom maps and analyze georeferenced data.
By providing access to high quality previously unusable data, the solution is a middleware layer that supports the creation of applications which can process geospatial data faster and more efficiently than before to provide unique insights.
An example is the ability to determine crop yields and the amount of wheat produced by a US state or any geographical area defined by a user.
Given the amount of satellite coverage another example use case could be traffic counts or public transport infrastructure desktop studies (often conducted using google maps) to inform maintenance and upgrade works for governments.
Note: I have not used the software or API and can’t gauge the depth / complexity of the data provided.
Building Operations
ProSentry, a New York startup, raised $3.2m in funding. They provide a monitoring platform for buildings providing real time information, detection and alerts such as water leak detection and mechanical and environmental monitoring. More here.
[Hiring - 1 role in Sales]
Other
Sunfire, a German startup, raised €215m in Series E funding. They develop electrolysis technologies to produce renewable hydrogen and syngas from renewable electricity, water steam and captured CO2. More here.
Notes:
Cemex, a global building materials company and parent company of CEMEX Ventures, a ConTech venture investor is launching ‘Concrete Chemicals’ with Sunfire - a new hydrogen project to decarbonize the cement industry.
The project (pending funding) involves the construction of a demonstration plant at Cemex’s Rüdersdorf cement plant, which is one of Germany’s biggest cement production sites.
The plant will produce 5000t of green hydrocarbons using CO2 captured on-site from the cement plant and green hydrogen produced by a co-located Sunfire-electrolyzer.
The project offers a blueprint for the cement industry by demonstrating the possibilities to turn CO2 into a usable product.
Policy and Regulatory Changes
Member states to restore 16% of poor buildings by 2030 under new law
The European Parliament has voted to adopt the negotiated text on the revised Energy Performance of Buildings Directive (EPBD).
As part of the EPBD, EU countries will target 16% of their worst-performing non-residential buildings for renovation by 2030 and 26% by 2033.
All new buildings should be zero-emission by 2030, while new buildings occupied or owned by public authorities should be zero-emission by 2028.
Between 2026 and 2030, member states will need to progressively equip roofs of non-residential buildings with solar installations.
The member states must ensure that a sufficient number of workers are available and properly trained to carry out these renovations and installations.
Lawmakers have also agreed on an indicative phase-out date of 2040 for the use of fossil fuels in heating and cooling systems.
Notes:
More than 220 million buildings, comprising approximately 85% of the non-residential EU building stock, were constructed before 2001 and are expected to remain standing in 2050.
Therefore the focus is on retrofitting the existing building stock to meet emissions targets.
To complete these renovations the EU needs to drastically increase the amount of construction labor available.
As a result of this law, VC funding in Europe will further increase in areas of energetic renovations (VARM), heat pumps, labor force training solutions (Smalt and Montamo) and robotics and automation.
I expect that the models which work will be copied by US startups as local legislation begins to mirror the EU.
S.E.C. Approves New Climate Rules Far Weaker Than Originally Proposed (alternate no paywall)
On Wednesday, the SEC approved new rules on how and if public companies should disclose climate risks and how much greenhouse gas emissions they produce.
The rules have fewer demands than when proposed 2 years ago including:
The SEC has dropped a requirement for U.S.-listed companies to disclose Scope 3 emissions. The focus is on Scope 1 & 2. 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.
The original rules would have required all publicly traded corporations to disclose their direct emissions, thousands of small businesses are exempt.
Large public companies will only be required to disclose climate-related risks that are deemed to have a “material” impact or significant importance to their bottom line (i.e information an investor would want to know when making a decision).
Notes:
Large construction companies could fall under the purview of this law.
New York City bill would mandate solar panels on public buildings
The proposed bill would require 100 MW of solar systems to be installed on the roofs of city owned buildings by 2025
By 2030, 150 MV is to be installed on city buildings and other properties such as parking lots and industrial areas.
Independent contractor rule takes effect
As discussed in the 15th January issue the new rule makes it more difficult for employers to classify workers as independent contractors has gone into effect.
This has an impact on the earnings a construction worker could receive.
The 6 factors used to determine if a worker is an employee or contractor are:
The degree to which the employer controls how the work is done.
The worker’s opportunity for profit or loss.
The amount of skill and initiative required for the work.
The degree of permanence of the working relationship.
The worker’s investment in equipment or materials required for the task.
The extent to which the service rendered is an integral part of the employer’s business.
Building code reform moves forward in Virginia
Most state and city building codes (including Virginia’s) require apartment and condo buildings to have multiple exit stairways for buildings over 3 to 5 stories.
Legislators have introduced 2 bills to evaluate allowing single stair multifamily construction up to 6 stories.
This allows buildings to be built with more efficient designs which are easier to build on small or irregular shaped lots (these are common in the US).
Biden Budget Seeks Heavy Spending for DOT, Corps Construction
Biden has sent a budget request to congress.
Two key construction agencies, the U.S. Department of Transportation and U.S. Army Corps of Engineers have a focus on heavy infrastructure spending.
The Federal Transit Administration disbursed $4b in its Capital Investment Grants program, which funds new rail and bus rapid transit start.
A five year, $8b program to upgrade Federal Aviation Administration towers, other facilities and radar systems is proposed.
For the Corps of Engineers civil works program, the budget proposes $7.22 billion.
The article provides a breakdown of natural gas restrictions across the US.
New York has become the first state to pass legislation imposing statewide natural gas restrictions.
Local governments in 7 states have passed ordinances for natural gas restrictions.
The reason for these changes is to reduce emissions.
The courts are beginning to weigh in on the legality of local ordinances that restrict natural gas use with one ban ‘California Restaurant Ass'n v. City of Berkeley’ overturned.
On the other side, 25 states have passed laws to prohibit local governments from restricting natural gas use.
Notes:
This article provides a detailed overview of natural gas restrictions in the US.
It is valuable as it highlights the power of municipalities in championing policies to reduce emissions.
Additionally it shows that policy makers must be thoughtful in how they implement policies to reduce emissions. While having targets to reduce emissions is important, implementation has legal challenges.
FHWA wants to drop Buy America waiver for manufactured products
The Federal Highway Administration announced a proposal to discontinue its 40 year waiver on Buy America requirements for manufactured products used in federally funded highway projects
The goal is to bolster domestic manufacturing and supply chains and also to stimulate jobs.
As part of the proposal the administration would create standards to apply to manufactured products covered under Buy America requirements.
$205bn high-speed rail Bill published by Democrat lawmakers
Legislation was introduced to invest $205b in high speed rail over 5 years.
This would involve $41b being invested annually via grants.
A goal is to transition passenger transit from aviation to rail by prioritizing high-speed rail grants for regions not serviced by the aviation industry or where the government subsidizes aviation routes.
Acquisitions
Lennar, a US home builder, is considering a $4b spinoff of its land holdings. More here.
Partners Group, a Swiss PE firm, is considering a sale of infrastructure assets worth $5b. More here.
Notes:
Demand for infrastructure is rising with investors viewing the asset class as helping the world transition to more carbon-friendly sources of energy.
News
Sustainably Intelligent: AI for a greener built world (Report by Pi Labs)
Tackling Construction Safety: A Multifaceted Approach (GS Futures)
Excellence in A.I. - Recap (and other A.I. musings) (Linkedin Article by Karl Sorensen)
Data Centre Flexibility: A call to action (White paper by Sidewalk Infrastructure Partners)
Demand for data centers is increasing while the US electricity grid is at breaking point.
By 2030, data center capacity is expected to triple, driven by the rising demand for compute and further accelerated by AI’s power density, growing to represent up to 7.5% of projected electricity demand.
The aim of the white paper is to catalyze collaboration between data center developers and grid operators in order to support a more sustainable deployment of digital infrastructure in the US.
Notes:
Sidewalk Infrastructure Partners (SIP) is an Alphabet (google) spinout that focuses on building and backing new approaches to complicated infrastructure problems.
They have also just launched their latest project, a new concept for more flexible data center energy management called Verrus.
Ramboll launches open access carbon database for buildings
It allows users to explore data on carbon emissions across 130 buildings in 6 countries.
AWS acquires Talen’s nuclear data center campus in Pennsylvania
Amazon Web Services (AWS) has acquired Talen Energy’s data center campus at a nuclear power station in Pennsylvania.
The campus draws power from Talen Energy’s neighboring 2.5GW nuclear power station in Luzerne County
As part of the deal, Talen will also supply AWS with energy via a 10-year Power Purchase Agreement (PPA).
Notes:
Data centers have growing energy demand requirements.
Countries are limiting data center construction due to concerns about power availability.
Singapore and China have imposed rules on new server farms due to energy usage fears.
Ireland has been rejecting permits as Data Centres are predicted to consume 32% of national energy by 2026.
Germany has recently introduced curbs that include limiting permits for data centers in residential areas, or requiring them to contribute renewable energy to the grid.
As a result it is becoming increasingly important for companies to secure clean energy sources when constructing data centers.
Related:
Data centers curbed as pressure grows on electricity grids (Financial Times)
AI has a construction problem - we are running out of energy (My latest LinkedIn Post)
Supply chain headaches persist 4 years into pandemic
Construction input costs have increased ~38% since February 2020.
The prices of unprocessed energy materials, natural gas and iron and steel have risen more than 50%.
Relatedly, the demand for construction equipment continues to rise with 135k new pieces financed in the US in 2023 (up 2.7%).
These continued high costs make it difficult for companies to open manufacturing factories in the US.
TSMC stated it is 4x more expensive to set up a semiconductor plant in the US vs Taiwan.
A wooden utility pole which appeared to be decayed toppled during high winds.
The issue highlights the importance of infrastructure maintenance and asset management.
Brooklyn Scores With the First All-Electric Building in New York City
Concrete Is One of the World’s Worst Pollutants. Making It Green Is a Booming Business (Wall Street Journal)
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.