Last Week in ConTech - 22 April 2024
Weekly intelligence briefings on the state of the construction tech ecosystem
In this issue there are:
15 Startup Fundings
8 Policy and Regulatory Changes
6 New National Infrastructure Projects & Priorities (India, China, US, UK)
0 New investment funds
1 Acquisitions
6 News articles
Reading time: 14 mins
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If you work for a green materials startup, I'd love to chat to you.
I am doing research into how we can adopt more green materials on site. Being a pavements engineer it’s a problem I’ve seen first hand and there are complex risk considerations.
The hope here is to create guidelines / best practice for piloting and scaling the use of as yet untested on site sustainable building materials so that we make changes now, rather than in 10 years.
If you want to chat or are involved in the sector feel free to book a time in my calendly or respond to this email.
Startup Funding
Labour Management
Rivet Work, a Detroit startup, raised $6m in funding led by Brick & Mortar Ventures. They are building a workforce management platform which helps commercial contractors to oversee, plan, schedule and deploy crews through their platform and forecast labor demand into the future. They have initially gained traction in the electrical contractor market. More here.
[Hiring - 1 role in Sales, 1 role in Support, 1 role in Software]
Workflow Management
Condoit, an Alabama startup, raised $4.25m in seed funding. They are building a platform which enables electrical contractors to streamline processes. The platform assists with electrical infrastructure assessments, design and analysis remotely and collaboratively during the bid / project phases and supports during the field stage by allowing electricians to use an app to remotely log data, capture photos and conduct site walks. More here.
[Hiring - 1 role in Sales, 1 role in Support, 1 role in Software, 1 role in Operations]
Advanced Air Mobility
Skyports, a London startup, raised $110m in Series C funding led by ACS Group, the largest construction group in Spain. They have two services, one which owns and operates vertiport infrastructure (Skyport Infrastructure) and the second which provides drone services (Skyports Drone Services) such as linear asset inspections and water quality monitoring. More here.
(thanks Mauricio Tessi Weiss for the tip)
[Hiring - 1 role in Finance, 1 role in Construction, 1 role in Project Management, 2 roles in Operations, 4 roles in Other]
Notes:
When construction firms invest in startups, it is often via a Corporate Venture Capital (CVC) unit or through investment in a Venture fund (as a Limited Partner they receive vetted deals).
These strategic investments can come with the expectation that the startup will involve them in the design / construction process as a partner. This benefits the corporate in two ways:
The firm can build exclusive capability in a new sector and gain a business moat.
It derisks the investment by offsetting part of the initial investment outlay with service fees.
An example of the first point 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 achieves commercial availability, they will be best positioned to win from the resultant government infrastructure spending.
In this case it is unclear if ACS Group will partner with Skyports for design / construction services.
It is evident that they want to closely track the sector and market via the investment. At the least, they believe there is a future where there is widespread use of commercial air taxis and this investment will provide them with an edge and experience in delivering the infrastructure.
Safety
FYLD, a London startup, raised £12m in funding. They provide a platform to improve the safety and efficiency of field teams by transforming video and audio footage into real time workflows, video risk assessments and analytics dashboards to eliminate paperwork, save time and improve safety. More here.
[Hiring - 1 role in Marketing, 1 role in Sales, 2 roles in Support, 1 role in Other]
Inspections & Monitoring
HyLight, a French startup, raised €3.7m in funding. They develop hydrogen powered autonomous airship drones for aerial infrastructure inspection such as power lines and to detect leaks in gas pipelines. More here.
[Hiring - 4 roles in Other]
Notes:
Inspections for energy infrastructure can be difficult and solutions are either:
Costly and polluting - helicopters.
Not precise enough - drone planes and satellites.
Lack flight autonomy - quadcopter drones.
The solution offers the best of an airship (flight time) and drones (manoeuvrability) which improves data collection (LiDAR, thermal, infrared).
Similar solutions have been proposed for large scale or remote progress monitoring of construction sites.
An airship can ‘sit’ over a construction site and complete LiDAR scanning to update models and ensure conformance to schedule.
Iceye, a Finnish startup, raised $93m in funding. They provide synthetic aperture radar satellite operations which allows for persistent aerial monitoring for natural disasters, environment changes and infrastructure. More here.
Notes:
The solution allows for access to near real time actionable data day or night, under any weather condition and even in challenging environments.
A common use case is to provide near real time flooding mapping and analysis supporting community resilience and sustainable development.
Smart Buildings
Kode Labs, a Detroit startup, raised $30m in Series B funding. They are developing a smart building platform which integrates and automates various building systems (over 130) such as fire alarms, elevators, occupations sensors (and more) allowing all the data to be brought in one place, normalized, indexed and then used to build applications on top of. More here.
[Hiring - 6 roles in Software, 1 role in Sales, 2 roles in Other]
Home electrification
Elephant Energy, a Colorado startup, raised $2.38m in seed funding. They provide home electrification services for homeowners offering a phased and guided approach customized to a homeowners needs and budget. More here.
[Hiring - 2 roles in Sales, 1 role in Project Management, 1 role in Software, 1 role in Operations, 1 role in HR, 2 roles in Other]
Notes:
Elephant Energy maintains and grows a trade partner / contractor network who perform the work.
Elephant Energy manages the customer relationship and project management while providing consistent work and defined project scopes to the contractor.
This model benefits the contractors by providing them with a steady stream of standardized work opportunities and assistance with working capital requirements like financing, payments, and change order management, which are handled by Elephant Energy.
This is an example of the cloud installer model (minus ‘radical standardization’) where a company seeks to build guaranteed capacity from a flexible workforce.
Hometree, a London startup, received debt funding (undisclosed). They are a residential energy services company which completes renewable energy installations such as changing from gas boilers to heat pumps. More here.
[Hiring - 3 roles in Operations, 2 roles in Sales, 1 role in Product, 1 role in Finance, 2 roles in Software, 1 role in Other]
Notes:
Hometree has been buying up independent energy installers across the UK (7 in total).
The acquisitions allow Hometree to grow its engineering force and retrain them in renewable installations (over 5,000 engineers).
Quilt, a Californian startup, raised $33m in Series A funding. They develop advanced, ductless heat pump systems which are controlled by AI allowing room by room control, occupancy awareness and predictive technology. More here.
Electricity Grid
GridBeyond, an Irish startup, raised €52.3m in Series C funding. They are developing a platform for distributed energy management which optimizes demand response, storage and renewables to support grid operators and local utilities. More here.
Notes:
As discussed in this newsletter, as we transition to renewable infrastructure, energy assets are now highly decentralized with local/community energy assets like home battery storage and rooftop solar panels.
This is in contrast to the traditional system which has been designed for a centralized energy system based on power plants.
As a result grid tech and electricity infrastructure is an area of increasing funding and interest.
Related:
Renewable Energy
Nexamp, a New York startup, raised $520m in funding. They are a community solar developer who manage all aspects of a project including development, engineering and construction to operations and customer engagement. More here.
[Hiring - 2 roles in Construction, 5 roles in Project Management, 4 roles in Project Developer]
Related:
Community Solar Basics - Office of Energy Efficiency & Renewable Energy
zolar, a Berlin startup, raised $109m in debt funding. They provide solar panels and installation services to consumers while offering flexible instalment loans for financing. More here.
[Hiring - 4 roles in Operations, 1 role in Product, 2 roles in Marketing, 2 roles in Sales, 1 role in Other]
Notes:
It is notable that zolar has chosen to raise debt funding. The chosen debt vehicle is an asset backed security.
When a customer signs the contract, zolar receives the contract upfront from the debt facility and the loan will be paid to BNP Paribas.
This is becoming an increasingly common approach for climate tech companies selling hardware.
Other
Renterra, a Chicago startup, raised $3m in funding. They provide a modern software platform for the equipment rental industry streamlining all aspects of equipment rental, from inventory management and customer relations to analytics and operational efficiency. More here.
Notes:
Renterra appears to focus on construction equipment rental companies.
They offer a guided onboarding flow, setting up companies' systems for them using a ‘white glove’ service.
They then offer personalized training sessions for employees to increase uptake and adoption of the software.
This onboarding approach should be copied by construction tech startups.
Construction software sales are incredibly sticky and if a customer is successfully onboarded and utilizing the software (loss leader is the upfront training cost) they will likely use it for years without switching.
GovDash, a San Francisco startup, raised $10m in funding (SEC filing). They help small businesses secure US government contracts by automatically finding contracts relevant to a business, reading the request for proposals and using generative AI to write proposals. More here.
Notes:
This funding was originally included in the 5th February issue.
Policy and Regulatory Changes
America’s roads and bridges to get $830 million for a climate makeover
The US Department of Transportation (USDOT) is offering $830 million in grants to 80 projects aimed at strengthening US infrastructure against climate change.
These grants are the first of their kind dedicated to transportation infrastructure resilience.
Notes:
The number of billion dollar weather disasters reached a record high in 2023.
Climate change is intensifying risks to infrastructure and investment is required to make it more resilient.
Towards zero-emission buildings by 2050: Council adopts rules to improve energy performance (EU)
The EU has adopted a revised directive on the energy performance of buildings.
By 2030 all new buildings should be zero emission and by 2050 all of the buildings in the EU should be zero emission.
For non residential buildings, they must not exceed the specified maximum amount of primary or final energy they can use per m2 annually.
By 2030, all non residential buildings will be above the 16% worst performing buildings.
By 2033, they will be above the 26% worst performing.
The average primary energy use of residential buildings will be reduced by 16% in 2030 and by 20-22% in 2035. At least 55% of the energy reduction will be achieved through renovation of the 43% worst performing residential buildings.
Member states will have two years to incorporate the provisions of the directive into their national legislation.
The Mass Timber Federal Buildings Act has been introduced to create an incentive for use of mass timber building materials in federal building projects and military construction.
It creates a two tier contractor preference for mass timber and contains a reporting requirement for a whole building life cycle assessment to provide additional evidence of the carbon sequestration benefits of mass timber buildings.
Everything you need to know about the new building safety gateway regime (UK)
Building Safety Act 2022 (BSA) brought in a new building-control regime for higher-risk buildings (HRBs).
Under the new regime, the Building Safety Regulator (BSR) is responsible for building-control approval for works to new and existing HRBs.
There are three gateways that form the new building-control approval process:
Gateway one: Planning permission – need to show fire safety is incorporated into the proposals (been in force since August 2021).
Gateway two: Preconstruction – the BSR needs to be satisfied that the design meets building regulations before construction commences.
Gateway three: Completion – the BSR needs to be satisfied that the design and construction meets Building Regulations before the building can be occupied.
The article provides a breakdown on the system.
New Florida law imposes warranty requirements on Florida builders starting in 2025
The legislation taking effect on July 1 2025 will require Florida builders to provide a one-year warranty for all newly constructed homes “for all construction defects of equipment, material, or workmanship furnished by the builder or any subcontractor or supplier resulting in a material violation of the Florida Building Code.”
There are exclusions which builders are not required to warrant such as normal wear and tear (discussed in the article).
This funding will be used to enhance electric mobility in communities without access to home charging infrastructure and to transition fleets to electric vehicles.
It focuses on developing managed charging solutions to optimize grid efficiency and integrate renewable energy.
New York lawmakers pass $237 billion budget with policies to jump-start housing market
The plan offers developers a tax break if they agree to rent a portion of apartments in new buildings for below market price.
Washington state lawmakers allocate $25 million to advance SMR development
Washington state legislators have allocated $25 million in the state’s 2023-2025 capital budget for small modular reactor (SMR) development.
It will fund development of up to 12 small modular reactors.
National Infrastructure Projects & Priorities
India
Modi vows to turn India into global manufacturing hub as he seeks 3rd term in 2024 election
Government policy conversations in India are focused on making the country into a global manufacturing hub as companies shift from China.
There is a focus on the sectors of pharmaceutical, energy and semiconductor industries.
Notes:
As the global strategic environment shifts, western companies are looking for alternative manufacturing locations to increase their supply chain resiliency.
India is viewed as an alternative and there is an expectation of increased investment in manufacturing infrastructure.
As a contractor in India, it could make sense to develop capability within the industrial construction sector.
As a construction tech startup in India, an emerging customer is the industrial construction contractor.
As more funding and investment is focused here, there is an opportunity to build solutions for this customer as government incentives could result in significant growth and market opportunity.
Related:
Malaysia Rises as Crucial Link in Chip Supply Chain
Malaysia is the 6th largest exporter of semiconductors and packages 23% of all American chips.
India likely to construct 5-8% more roads y/y in 2024/25
India is expected to maintain current road construction momentum, adding up to 13,000km in the 12 months through March 2025.
Since 2014, India has built about 90,000km of national highway.
China
‘World’s largest’ compressed air energy storage project connects to the grid in China
The technology works by pressurizing and funnelling air into a storage medium to charge the system (during periods of excess grid capacity).
Air is then released through a heating system to expand it and turn a turbine generator to generate electricity.
The project cost $270m with a 300MW/1,500MWh capacity and was built in 2 years.
The contractor estimates that this was built 3-4x faster than a pumped hydro energy storage plant (6-8 years).
Notes:
This is a piece of innovative infrastructure which could be deployed across the world to provide decarbonised energy storage capacity.
Related:
United States
Fortera Lowers Carbon Emissions with Opening of its First Industrial Green Cement Plant
This is a first of a kind industrial CO2 mineralization plant.
It results in 70% lower emissions when compared to ordinary cement.
It is also the first example of a company directly capturing carbon emissions from cement production to make low carbon cement.
Notes:
Fortera’s ReCarb technology is a turnkey bolt-on decarbonization solution that integrates into existing cement plant infrastructure rather than requiring the construction of new green cement plants.
The plant is the first industrial green cement and carbon mineralization facility in the US.
Japan to collaborate with US on cutting floating offshore wind costs
Japan and the U.S. will work to accelerate developments in engineering, manufacturing and other areas related to floating wind farms.
Tokyo will contribute 120 billion yen ($784 million) to develop floating wind technology.
Notes:
Floating wind power installations are typically bigger and costlier than bottom-fixed structures.
The United States has set a goal of installing 15 gigawatts of floating offshore wind capacity by 2035 - enough to power more than 5 million homes.
This U.S. plan also calls for cutting the cost of floating offshore wind installations operating in deep waters by more than 70% to $45 per megawatt-hour over the next decade.
United Kingdom
Eastern Green Link 2 receives provisional regulatory approval
This is a 500 km subsea connection between Scotland and Yorkshire and the longest built in the UK.
The 525kV 2GW is capable of carrying enough electricity to power 2m homes.
It is expected to require an investment of £4.3bn, the largest ever in electricity transmission infrastructure in Great Britain.
Notes:
This is one of the most significant strategic investments in energy infrastructure in the UK.
It underscores the critical need for electricity grid upgrades as we transition to a clean energy landscape.
Acquisitions
Exyte, a German company specializing in the design, engineering, and delivery of high-tech facilities, acquired Kinetics Group, a Californian company which provides installation services, equipment, as well as technical facility management. More here.
Notes:
The CHIPS and Science Act includes $39b in subsidies for chip manufacturing on US soil and Kinetics Group offers solutions for the semiconductor sector.
This acquisition is a strategic play to gain market share in a sector of the US market which is viewed as critical infrastructure.
Additionally, there is a shortage of talent in the semiconductor sector in the US, with TSMC recently stating that it is 4x more expensive to set up a semiconductor plant in the US vs Taiwan.
News
John Deere appeals to Gen Z with ‘chief tractor officer’ job
This role is to find a ‘Chief Tractor Officer’ to be the face of their social media and capture the unique and unexpected ways that farming and construction impact everyday lives.
It is to increase brand awareness among younger generations as farmers age out of the industry.
Notes:
Construction has a marketing problem and this week on linkedin I predicted we will change this in perception within 10 years.
The reason is that we will improve the way we sell the industry to the incoming generation.
These roles, similar to the Chief Evangelist role seen in startups, will become more common at large contractors.
One of the world’s highest cities starts rationing water for 9 million people
There are just 77 ships to maintain 800,000 miles of underwater cables which transfer 99% of the world’s data - some of the most important infrastructure in the world.
Microsoft, OpenAI plan $100 billion data-center project, media report says
They have stated that this is the next generation of infrastructure innovation required to push the frontier of AI.
Notes:
AI requires physical infrastructure to provide computational power in the form of data centers.
This has resulted in an increase in funding for data center startups (e.g. Flexnode, Phaidra)
Why Heat Pumps Are the Future, and How Your Home Could Use One (New York Times)
NEOM's workforce projected to surpass 200,000 by next year amid rapid development
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.
It's going to be wild to see how much energy will be allocated for more and more AI computational power.