Last Week in ConTech - 19 August 2024
The next phase of AI will be defined more by physical construction than by scientific discovery
Last Week in ConTech is a summary of the most important construction startup funding, news, policy changes and national project investments in the last 7 days. The goal is to provide decision makers with information on technology solutions and macro-economic trends in construction to help drive innovation in the industry.
In this issue there are:
15 Startup Fundings
10 Policy and Regulatory Changes
6 New National Infrastructure Projects & Priorities
0 New investment funds
1 Acquisitions
8 News articles
44 open jobs - view here
Reading time: 14 mins
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Startup Funding
Building Decarbonization
Miru, a Canadian startup, raised $20m in Series A funding. They develop electrochromic windows (eWindows). More here.
[View open jobs - 1 role in Marketing, 1 role in Operations, 2 roles in Other]
Notes:
In the last 30 days, 3 window startups have raised $57m in funding (Aeroshield Materials, Alpen and Miru).
Smart Windows are valuable for building decarbonization as heat gain and heat loss through windows is responsible for 25-30% of residential heating and cooling energy use.
Asset Management / Drainage
ITpipes, a Seattle startup, raised $20m in funding. They develop pipeline inspection software which helps municipalities with the maintenance of underground assets such as sewer and storm systems. More here.
Site Safety
Site 20/20, a Canadian startup, raised funding (undisclosed). They develop hardware and software solutions such as automated traffic control systems which make roadside construction safer. More here.
Construction Materials
Ecopals, a Berlin startup, raised €4m in funding. They have developed a high performance asphalt additive which extends the service life and replaces virgin plastics to reduce the C02 footprint by up to 20%. More here.
[View open jobs - 2 roles in Operations, 1 role in HR, 1 role in Product, 1 role in Other]
Site Security
Actuate, a New York startup, raised $11.5m in funding. They develop computer vision software for remote video guarding enhancing monitoring, threat detection and support site safety. More here.
Notes:
The construction industry loses $400m in equipment theft each year.
This solution can be integrated on site to monitor equipment and provide security.
It can also report on PPE usage and safety threats.
Logistics
FleetPulse, a Chicago startup, raised funding (undisclosed). They are developing a trailer telematics solution which supports end to end visibility of trailers ensuring safety and security. More here.
Notes:
The solution provides 4G tracking and search for individual trailers.
This is valuable as an offering to construction companies as it supports accurate ETA for material delivery.
Renewable Energy
Branch Energy, a Houston startup, raised $10.8m in Series A funding. They have developed demand management software and on-site battery systems for residential and small businesses. More here.
Notes:
Branch Energy installs battery storage systems that charge during low-cost periods and discharge when prices are high.
While the idea is not novel, their delivery mechanism is interesting.
They are vertically integrated, offering free site inspections to determine viability of their solution.
Once the contract is signed, they permit and install the system which is managed by their demand management software.
For the delivery and installation of the system, they utilize an inhouse field services team (subcontractor).
It is another example of the Cloud Installer Model.
In the renewable energy sector, the critical problem appears to be installation and delivery to residential / small business customers at scale.
The solutions which are ‘winning’ in this sector tend to be vertically integrated tech-enabled contractors.
By guaranteeing capacity from a workforce of installers, they are able to lower upfront costs and earn revenue on the long tail (Branch Energy’s contract is 36 months).
Government
Sweetspot, a New York startup, raised $2.2m in funding. They have developed an AI platform for government contracting procurement which mines federal, state and local government contracts making it easier for companies to apply for and track their progress in the government procurement process. More here.
Emissions Tracking
Clearly, a UK startup, raised $4.3m in funding. Their solution gathers emission and energy data for fleet operators on a per trip basis which assists them with decarbonization decisions. More here.
[View open jobs - 1 role in Software, 1 role in Product]
Notes:
Clearly’s solutions helps to track Scope 3 emissions.
These are emissions from supplies and supply chains such as organizations supplying goods and services.
An example is the emissions related to the delivery of material onto a construction site which can be difficult to track.
Scope 3 emission disclosure was proposed under the SEC draft climate rules (and then later dropped) however it is likely that these disclosures will be required in the future.
Virtual Reality / Augmented Reality
ArborXR, an Oklahoma startup, raised $12m in funding. They provide an enterprise platform for companies which are using AR or VR devices to manage and control their devices. More here.
Notes:
Similar to how corporate IT teams have access to all of the employees laptops to remotely manage software, ArborXR does this for AR and VR devices.
The software allows training progress to be monitored, guide employees through virtual experiences, control user settings, limit access and trigger updates and more.
XR devices have been adopted in healthcare and education but yet to meaningfully penetrate the construction sector (though there are some companies which are running pilots and experiments with the Apple Vision Pro).
This software is required to manage and deploy the devices at scale.
Sales
Voiceline, a Munich startup, raised €2.4m in funding. They developed a platform which automatically transcribes and analyzes conversations by voice including identifying industry specific terms and automatically generating automated follow up actions and streamlining admin tasks. More here.
[View open jobs - 2 roles in Software, 2 roles in Support, 2 roles in Sales]
Notes:
For those selling to the construction industry, sales are still primarily driven by in person workshops or live demonstrations as they need to understand their customers’ requirements on-site.
These sales people are usually disconnected from their office environment in which they complete admin tasks.
Due to this and their schedule, key data on follow ups tends to be pushed till the end of the day / week.
This causes delays in the follow up processes to move a sale forward.
Voiceline allows users to record interactions by voice and uses AI to convert this into follow up processes in the CRM which can be followed up by the home office team.
Fusion Technology / Future Energy
General Fusion, a Canadian startup, raised $14.6m. They are developing a fusion reactor and will be using the funds to build a demonstration plant. More here.
[View open jobs - 3 roles in Other]
Notes:
Nuclear and fusion is becoming an important part of the energy mix conversation.
Nuclear involves the process of splitting atoms to generate energy while fusion involves fusing atoms together to release energy.
Neither technique releases carbon emissions, promising a source of clean energy which we desperately require.
Excitement over fusion technology has been growing as in 2022 a US laboratory triggered a reaction which created more energy than it took to set it off.
This funding came from the Canadian government and there is interest from the US.
For contractors / designers in the energy markets, staying abreast of research innovations and building capability in construction of demonstration plants can be valuable.
The reason is, if proven feasible, they are very likely to be rapidly deployed throughout the world (and will be complex buildouts where proven track record of delivery would be highly regarded).
Real Estate
Probis, a Germany startup, raised funding (undisclosed). They offer a platform which provides financial control of development projects and enhances cost and revenue management which provides access to data for planning, controlling and optimizing small, medium and large construction projects and entire project portfolios. More here.
Parking
Wemolo, a German startup, raised debt financing. They have developed a digital parking lot solution using GDPR compliant license plate recognition technology which automates the process of billing and provides detailed insights into space utilization and peak times. More here.
[View open jobs - 2 roles in Marketing, 7 roles in Sales, 6 roles in Operations, 4 roles in Support, 4 roles in Software, 1 role in Product]
Other
DeCarice, an Australian startup, raised funding (undisclosed). They have developed a solution which enables heavy duty diesel engines to run up to 90% hydrogen which reduces carbon emissions by up to 85% without compromising performance aiming to decarbonize hard to electrify sectors such as heavy transport or mining. More here.
Notes:
This solution allows a ‘dual fuel’ direct injection system which operates alongside the existing diesel injection system.
It is expected to be used in industries such as heavy transportation, ports, mining and stationary power generators.
It can also be applied to the construction industry where generators and equipment tend to use diesel.
Policy and Regulatory Changes
Americans tapped $8 billion in tax credits on home energy upgrades
American taxpayers claimed more than $8 billion in credits on their 2023 returns for making climate-friendly upgrades to their homes under the Inflation Reduction Act.
This was more than double the government projection of $2.4b in the first year and then $4b per year for the next 2 years.
The data shows 3m households claimed $6b in credits for solar panel installation and $2b for home improvements such as new windows and air-conditioning systems.
Related:
18 House Republicans ask Johnson not to target IRA clean energy tax credits if the GOP maintains or expands its House majority next year.
China sets rules to lure private investment in infrastructure
China has placed rules to protect private investors and expand opportunities in infrastructure and utility projects which have previously been off limits.
Contracts would be based on build-operate-transfer (BOT) models.
The government will encourage banks to provide syndicated loans for such franchise projects, and let policy banks offer "differentiated" credit support, including loans of up to 30 years.
Notes:
Private investment is encouraged in infrastructure as local governments have heavy debts largely run up during a massive state-led stimulus implemented after the global financial crisis.
Democrats’ VP pick Tim Walz welcomed as climate champion by green advocates
The Democrat VP pick has a strong climate record which includes energy permitting reform and plans for 100% clean energy by 2040 in Minnesota.
If elected, he could be a strong driver for renewable energy investment.
India Committed To Becoming A Global Leader In Semiconductor Production
Modi stated that the government is working to reduce dependency on imports and enhance technological self sufficiency.
The prime minister pitched for transforming India into a global manufacturing hub by leveraging its vast resources and skilled workforce.
Notes:
There is increasing foreign investment in developing manufacturing capability in India as an alternative to China.
This will grow manufacturing construction however logistics efficiency continues to lag other Asian economies and could be an inhibitor on success (i.e transportation from factory to port).
Italy cuts red tape on green energy, clamps down on illegal plants
The legislation will streamline approval for renewable energy projects by reducing the number of procedures required for plant approvals.
The government has committed to increase solar energy capacity by ~50 GW by 2030.
Small plants such as solar projects with a capacity below 10 MW won’t need a permit.
This thread details how public transport combined with autonomous vehicles within a public station, is being used to optimize retail delivery.
This pilot started in 2023 to deliver sensitive freight in cities during off peak periods via metro systems.
Massachusetts dishes out $53M to decarbonize affordable housing
This will be used to allow affordable housing operators to complete energy efficiency retrofits.
Massachusetts has a goal of becoming carbon-neutral by 2050 with buildings contributing 35% of the state’s carbon emissions.
The DOE is providing funds to four heat pump manufacturers to accelerate manufacturing of electric heat pumps.
Biden-Harris Administration invests US$566m in modernizing US airports
296 grants were made in 47 states to modernize airports.
Florida Law Speeds Up Building Permits, Secures Rights For Developers
Senate Bill 812 allows developers to acquire up to 50% of the residential building permits for a residential subdivision or planned community.
It does so by requiring certain cities and counties to create an expedited review process.
It also creates a mechanism for developers to have a vested right in an approved preliminary plat.
National Infrastructure Projects & Priorities
US
Construction’s manufacturing boom: Mapping the biggest facilities underway in the US
Since the CHIPS act ($52b), over $898b in private investments has been made in US manufacturing facilities.
This has increased manufacturing construction spending by 20%.
It has also attracted all 5 of the world’s leading semiconductor manufacturers to build plants in the US.
Brookfield commences permitting for Oregon 4GWh hybrid BESS facility
Brookfield Renewable US has entered the permitting process for a hybrid solar and BESS facility which would be among the biggest in the world to date in terms of battery capacity.
China
How China Built Tech Prowess: Chemistry Classes and Research Labs
China is outpacing other countries in research fields like battery chemistry, crucial to its lead in electric vehicles.
This is driven by education as a considerably larger share of Chinese students major in science, math and engineering than students in other big countries do.
This, tied with government subsidies and policies that have helped fuel the factory boom have left many other countries wary of buying more of China’s exports.
Notes:
China has built world leading expertise in battery technology through tight coordination between the public and private sectors.
The US and EU are trying to catch up by applying tariffs and providing subsidies to spur domestic capability and manufacturing.
This coordinated approach is reminiscent of cold war era US policy to stimulate innovation and ‘win’ in global power competition.
Having visibly lost the lead in batteries, other sectors such as AI, semiconductors and cheap energy are becoming focus areas.
We are beginning to see strong coordination of US government policy in these ‘critical’ technologies areas.
Examples include the CHIPS act (semiconductors) and Advance Act (nuclear).
UK
Electricity ‘superhighway’ between Scotland and England to go ahead
A £4.3bn subsea cable will transmit renewable electricity from Scottish wind farms to 2m homes in England.
This will be the longest in Great Britain and is the large investment in the grid to date.
The new government has a plan to create a net zero electricity system by 2030.
Google
Project Green Light’s work to reduce urban emissions using AI
The project uses AI and Google Maps driving trends to model traffic patterns and make recommendations for optimizing the existing traffic light plans.
It helps cities to improve traffic flow at intersections and reduce stop-and-go emissions.
Notes:
With the access to data that google has, they could provide consulting services to governments in various business lines such as transportation or energy.
Egypt
Egypt to Host First Hydrogen-Powered Skyscraper in Africa
The 50-story Forbes International Tower is a $1 billion project set to begin construction in early 2025 and be completed by 2030.
Acquisitions
Align Technologies, a Colorado construction operations solutions provider, acquired FleetWatcher, an Indianapolis fleet and materials management software for the heavy civil construction sector. More here.
News
Delivering on construction productivity is no longer optional (McKinsey)
Global construction spending is projected to escalate from $13 trillion in 2023 to $22 trillion in 2040.
The industry will need to double its growth rate to deliver on these projections.
Delays hit 40% of Biden’s major IRA manufacturing projects
The Inflation Reduction Act and Chips and Science Act offered more than $400b in tax credits, loans and grants to spur development of a US cleantech and semiconductor supply chain.
Of the projects worth more than $100mn, a total of $84bn have been delayed for between two months and several years, or paused indefinitely.
Steel, Servers and Power: What it Takes to Win the Next Phase of AI (Sequoia)
The next phase of AI will be defined more by physical construction than by scientific discovery.
Up until now, you could fit your training cluster into an existing data center via colocation or retrofit.
This is changing as model size is the number one driver of performance.
The next generation of models are aiming for a 10x increase in model scale to 300k GPUs which requires an entire new data center.
That means you need to add 18 to 24 months of construction time before you can actually start training the new model.
Related:
How will driverless car impact the future of real estate (Fifth Wall)
The demand for parking will decrease significantly at home and in downtown areas—changing the design of urban spaces.
People will tolerate longer commutes and be able to work while traveling in a driverless car.
Cities will be more enjoyable and livable without an abundance of space dedicated to parking.
New, tech-enabled real estate asset classes could emerge to service, store, and charge these fleets of autonomous vehicles.
Why Californians Have Some of the Highest Power Bills in the U.S.
Utilities are investing billions to upgrade infrastructure and build out green energy.
These costs are being passed on to consumers.
Electricity prices in the state have nearly doubled during the past decade and are now higher than those of anywhere but Hawaii.
The Perfect Storm: Understanding the Current State of Home Insurance
1 billion birds die annually in the US from colliding with buildings, study says
In the AI era, DOE sees itself as a data center liaison
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.