Last Week in ConTech - 24 June 2024
Investing in ‘non-partisan’ infrastructure + Google unveils a renewable energy infrastructure investment model
Apologies for the delay on this one - substack had a delivery issue at the scheduled time.
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:
16 Startup Fundings
8 Policy and Regulatory Changes
6 New National Infrastructure Projects & Priorities
1 New investment funds
0 Acquisitions
4 News articles
43 open jobs - view here
Reading time: 15 mins
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Startup Funding
Building Decarbonization
Bisly, an Estonian startup, raised €6.2M Series A funding. They develop smart building systems (software and hardware) which tracks building energy consumption data to allow owners to optimize and improve energy use. More here.
[View open jobs - 2 roles in Software, 1 role in Operations, 1 role in Support, 1 role in Sales, 1 role in Other]
Notes:
Around 40% of all energy consumed in the EU is from buildings.
85% of these buildings were built prior to 2000 and 75% have poor energy performance.
The EU, as per the Energy Performance of Buildings Directive, has a goal of fully decarbonising their building stock by 2050 and has set clear renovation targets on existing poor performing buildings.
This challenge is not limited to the EU, with the US requiring similar upgrades (though the regulation is not yet as defined as the EU).
These solutions continue to increase in demand and funding in this sector.
Alpen, a Colorado startup, raised $18m in funding. They manufacture high performance windows, doors and architectural glass. More here.
[View open jobs - 1 role in Finance]
Notes:
The global architectural glass market was valued at ~USD 84.15 billion in 2022 and is expected to reach USD 127.37 billion by 2028.
Thermal efficiency of windows has a large impact on energy efficiency and building decarbonization.
Related:
UNSUSTAINABLE: Windows, 2150 VC
Materials
CuspAI, a UK startup, raised $30m in seed funding. They are streamlining the material design process through the use of an AI platform which functions as a search engine where users can input the properties they want materials to have and they generate the chemical composition required to make them. More here.
Materrrup, a French startup, raised €26m in funding. They develop low carbon cement and the funding will be used to develop 10 low carbon cement plants. More here.
[View open jobs - 2 roles in Operations, 1 role in Software, 1 role in Civil Engineering, 6 roles in Other]
Glavel, a US startup, raised ~$3.4m in funding. They develop foam glass gravel which is a lightweight bulk aggregate made from recycled glass used as drainage and in sub slab insulation sites, as a lightweight fill for soft soil applications and green roof fill installations. More here.
[View open jobs - 1 role in Other]
Procurement
BuildBuddy, a UK startup, raised £1m in funding. They use AI to streamline the process of purchasing construction materials by scouring the web to find the best prices with the most suitable delivery terms for procurement teams to easily review and order. More here.
Water
SewerAI, a Californian startup, raised $15m in Series B funding. They use AI to detect defects and issues in sewer pipes allowing field inspectors to upload inspection data to the cloud and tag issues to drive maintenance works. More here.
[View open jobs - 1 role in Software, 1 role in Marketing, 3 roles in Other]
Notes:
Pipe inspections are a routine maintenance requirement for infrastructure.
A camera is sent through a pipe and an operator manually identifies and tags cracks for review by an engineer to identify maintenance works / water leaks which may affect surrounding construction.
This manual review process is ideally suited to use AI to quickly identify defects.
Similar use cases include pavement defect inspections where a camera is attached to a car and an inspector reviews footage to identify the cracks in the pavement for maintenance.
Compliance
Archistar, an Australian startup, raised $5m in funding. They help to streamline decision making for developers, governments and architects by using digital planning records and AI to easily assess development feasibility and compliance with planning regulations. More here.
Community Engagement
Zencity, a New York City startup, raised $40m in Series C funding. They have developed a community engagement platform for local governments helping with stakeholder engagement and understanding communities needs by analyzing feedback from sources such as social media and surveys. More here.
[View open jobs - 3 roles in Support, 1 role in HR, 1 role in Sales, 2 roles in Software, 2 roles in Marketing]
Reality Capture
Gracia AI, a US startup, raised $1.2m in seed funding. They develop photorealistic volumetric videos using volumetric video capture to construct a 3D model of a scene and create realistic and immersive visual experiences for virtual and augmented reality applications. More here.
Notes:
Photorealistic volumetric videos are highly realistic 3D video recordings captured from multiple angles.
It creates a free-viewpoint 360° views which allows viewers to move around in a scene and view it from different angles as if they were physically present.
As this technology develops it has applications for construction in terms of reality capture and remote observation.
Teams are able to remotely view the site with greater detail and flexibility than before as they can ‘move’ in the environment.
Digital Twins
DataMesh, a Singaporean startup, raised funding (undisclosed). They are developing an industrial metaverse platform which provides digital twin software which can be overlaid on to the real world to assist with training, safety and remote collaboration. More here.
Home Decarbonization
Balto Energy, a Californian startup, raised $1m in pre-seed funding. They have developed a Solar-Led Electrification Design tool which determines the future state electrification requirements for a home (heat pumps, induction stoves, electric vehicles etc) and then design solar systems to supply this. More here.
Notes:
Traditionally, home energy upgrades such as heat pumps have cost savings modeled by calculating changes in demand for electricity from the grid.
As electricity prices continue to rise, this creates a disincentive for energy retrofits.
This solution models what a home needs to decarbonize and then designs a residential solar system which can service the home energy needs avoiding increasing energy bills.
Related:
About Building Energy Modeling, Office of Energy Efficiency & Renewable Energy
Rendesco, a London startup, raised £6m in funding. They develop, build and operate geothermal networks combined with ground source heat pump technology which helps decarbonise homes with this solution gaining traction in new housing developments. More here.
[View open jobs - 4 roles in Project Management, 1 role in Other]
Hometree, a London startup, raised £250m debt funding. They are a residential energy services company which completes renewable energy installations such as changing from gas boilers to heat pumps. More here.
[View open jobs - 2 roles in Sales, 1 role in Finance, 1 role in Support, 1 role in Other]
Electrification
VoltShare, a London startup, raised £500k in funding. They are developing an integrated electric vehicle charging solution for hospitality venues including a high-quality charger, mobile app, and unique pay-as-you-go business model helping to establish venue’s green credentials and attract like-minded guests. More here.
[View open jobs - 1 role in Sales]
Policy and Regulatory Changes
EU approves nature law in face of Austrian legal threat
The Nature Restoration Law requires the EU's 27 member states to put in place measures to restore at least 20% of the bloc's land and seas by 2030.
Notes:
The vote on this law was a test of the EU’s appetite for continued climate legislation following bloc-wide elections earlier this month.
This could indicate continued support for green policies which has impacts on clean manufacturing policy and investment in new facilities.
NYC Seeks Changes to Landmark Building Decarbonization Law
New York is considering softening Local Law 97 which came into effect 6 months ago.
Local Law 97 demands that NYC’s largest buildings slash emissions 40% by 2030 and reach net-zero by 2050.
Around 50,000 buildings larger than 25,000 square feet must undertake retrofits to meet these targets, or pay a penalty for failing to do so.
Local Law 772 proposes that Local Law 97 be amended to ease decarbonization requirements and its non-compliance penalties for buildings that house low- and middle-income residents.
The bill would allow these residences to factor green spaces into their emission calculations, and reduce their penalties by as much as 100% till 2035 if they demonstrate financial need or a “good faith effort to comply.”
The proposed changes would cover 10% of the buildings affected, mostly condos and housing co-operatives.
The US General Services Administration (GSA) will invest in smart building technologies that will help reduce emissions, increase efficiency, reduce costs and enhance comfort across an estimated 560 federal buildings.
This is to accelerate progress toward achieving net-zero emissions in the federal building portfolio by 2045.
The GSA intends to enhance operations through granular controls, expand available reporting with more advanced metering sources, and optimize the operator experience.
Notes:
The GSA provides centralized procurement and shared services for the federal government including managing a nationwide real estate portfolio.
Railroads fear losing out to trucks if California gets its way
Last year the state adopted California’s In-Use Locomotive Regulation which would require all locomotives manufactured after 2035 that travel though the state of California be zero-emission.
This would ban the operation of locomotives that are more than 23 years old.
The rule also would require locomotives operating in the state to register with California Air Resources Board (CARB) and annually report on their activity, emission levels and idling data.
The CARB is attempting to secure approval from the U.S. Environmental Protection Agency.
Notes:
Critics argue the rule will increase the cost of rail transport and shift freight to highways.
This would impact road congestion, infrastructure maintenance requirements and logistics costs.
California Building Code to Add Bike Parking Requirements
The California Building Standards Commission is updating its code to include bicycle parking requirements.
The commission has proposed a change to require 0.5 long-term bike parking spots per unit in residential buildings.
Providing secure bike parking at home, work, and in public buildings can encourage more people to adopt biking as a daily transportation mode.
How we're working with utilities to create a new model for clean energy (Google)
Google introduced this first-of-its-kind model, the CTT, to bring new clean, firm power online, where it would otherwise be too expensive for a utility to add to its energy mix.
It allows corporates to pay a higher rate for clean, firm power without putting the burden on the everyday ratepayer.
Specifically it is a rate option available to any customer with a monthly energy demand above 5MW which allows these customers to pay for the costs associated with bringing clean firm capacity onto the grid.
Notes:
Typically companies procure clean energy via power purchase agreements (PPAs) with project developers however this has limitations.
The CTT model will be used to add clean energy to the grid mix to help corporates meet AI data center demand while maintaining decarbonization targets (for example, Google has a goal to run on 24/7 carbon-free energy on every grid it operates).
It supports emerging technology such as advanced nuclear and geothermal which has traditionally been too expensive compared to wind and solar.
This will lead to the construction of newer and more innovative energy infrastructure and construction firms have an opportunity to develop capability in the sector as it grows.
DOE offers $900M for next-generation small modular reactors
Of the funds, $100 million will be used to fix “key gaps” troubling the domestic nuclear industry.
The areas include design, licensing, supplier development and site preparation.
Notes:
Site preparation and design are areas construction firms / startups could provide assistance on.
Given the global shift towards nuclear policy, building experience in the US market could provide an edge when bidding for nuclear projects in the EU and UK (as these may emerge in the future).
Make Britain a clean energy superpower
The UK Labour Party has pledged to decarbonize the grid by 2030 and to ensure long-term security of the nuclear industry.
They are seeking to double onshore wind, triple solar power, and quadruple offshore wind by 2030.
Notes:
Renewable energy is a large growth area and opportunity for firms and startups.
Investment in renewable energy can receive bipartisan support as it is often tied to national energy independence.
Furthermore, rising household bills is making this a policy priority for governments.
National Infrastructure Projects & Priorities
US
US Army seeks nuclear microreactors for reliable on-site generation
The U.S. Army is seeking to have microreactor power plants which can begin operations at an Army installation by the end of 2030.
The goal is to reduce the Army’s reliance on electricity produced off-base and comply with a Congressional mandate to provide critical missions with 99.9% reliable energy by 2030.
Notes:
If the Army is able to support development and deploy microreactors at scale, this will be replicated through the commercial sector.
Large factories and data centers are potential customers for microreactors as it reduces energy cost and supports decarbonization.
For construction firms, this is a growing segment which, if proven to be feasible, could be rapidly deployed throughout the country.
Big Tech (US)
Google partners with Nevada utility for geothermal to power data centers
The deal would increase the amount of carbon-free geothermal electricity injected into the local power grid for Google's operations to 115 megawatts from 3.5 megawatts in ~6 years.
The partnership advances Google towards its goal of running on entirely clean energy by 2030.
Notes:
It is important to be aware of decarbonization targets set by large corporations and this has impacts on the construction sector.
Given the size of their portfolios and the amount of investment, they have the ability to influence the market similar in scale to middle power nations.
Tracking and understanding their policy shifts is important for construction firms servicing this market.
Tech Firms Ask NextEra for Enough Electricity to Power Entire Cities
Tech firms are asking utilities to find them locations with enough electricity to power entire cities for their data centers.
The demand is spurring plans for new fossil fuel plants, complicating climate goals.
It has led NextEra to consider restarting the Duane Arnold nuclear plant in Iowa which was shut down in 2020 after its biggest customer opted to exit its power-purchase agreement.
Notes:
Nuclear energy is increasingly becoming a part of the energy policy conversation conversation.
In the US over a dozen reactors have been shut down since 2013 due to cheaper power from natural gas and renewables.
With increasing demand, more funding could be placed into reopening existing plants.
In the longer term, nuclear power plant construction could become a larger part of the conversation.
Related:
Once Unthinkable Nuclear Plant Revival Is a Reality in US Shift
We just broke ground on America’s first next-gen nuclear facility
India
Centre mulling separate authority for expressways
India is considering creating a distinct body tasked with managing and developing expressways.
The new expressway body would specifically manage expressways, which have different construction rules and tolling systems
The National Highway body of India (NHAI) will focus on the construction of national highways.
This change may arise due to the development of the national masterplan for the construction of the expressway and national highway network for 2047.
The proposal calls for the construction of 50,000 kilometers of access-controlled expressways throughout India.
It would be spaced so any site will be within 100–125 kilometers of an expressway.
There are currently 2,913 kilometers of access-controlled expressways in the nation.
Mexico
Audi to invest €1 bn in Mexico for EV production
Audi is investing in its San José Chiapa plant in Puebla shifting production of the Q8 e-tron from Brussels.
This is to capitalize on US tax incentives for North American assembled EVs.
Notes:
Global competition with China has led to the nearshoring of the US supply chain with Mexico emerging as the main beneficiary.
It has led to increased investment in local production facilities and investment in infrastructure (e.g port facilities) to grow trade with the US.
Germany
Germany Trying to Prevent or Soften EU Tariffs on China EVs
The German government is working to prevent the European Union’s new tariffs on Chinese electric vehicles from coming into force.
This is in a desire to stop the threat of a spiraling tariff escalation.
Notes:
As mentioned in the last issue the EU will impose additional tariffs of up to 38 percent on electric vehicles imported from China into the bloc on July 4.
This is in an effort to protect the region’s manufacturers from unfair competition and a desire to grow local clean manufacturing capability.
Investment funds
Wind, a Parisian VC closed the first €90m fund. They will invest in solutions across Europe’s vital services and infrastructure industries including advancing key areas essential to human well-being and environmental health, such as food and air quality, mobility and energy, construction, and security. More here.
News
Market Review, Infrastructure, KKR
The new infrastructure report by KKR, a global investment firm, has a section considering if renewable energy is on the ballot as over half the global population is voting in a major election this year.
KKR sees renewables and clean energy as an area where there is a structural and long term need for infrastructure investment.
The conflict in Ukraine has reinforced the need for energy security, which is inherently tied to the transition to renewable energy.
Additionally, KKR attempts to invest in infrastructure assets which are ‘non-partisan.’
These assets address critical needs which eschew party politics such as supply chain resiliency (e.g CHIPS act).
Notes:
This report has implications for both startups and construction firms.
Startups should consider selling to construction firms which are addressing ‘non-partisan’ markets.
Similarly, construction firms which tender on government led infrastructure projects should be strategic on the projects they bid for and where they build internal capability and experience.
For example, given the rising competition with China, it is ‘likely’ semiconductor manufacturing will continue to receive investment and grant funding.
When going to market, startups and construction firms must consider the size of the market, the political risk and the growth.
Embattled Fletcher Building to divest half of Fiji business
Fletcher Building is one of New Zealand’s largest construction companies.
They have agreed to divest half of their Fiji construction business to two local partners .
Road construction down by 12.1% to 1288 km in the current financial year up to May 2024
Excessive heat in India slowed down the construction of national highways.
Notes:
Extreme weather due to climate change is becoming a stronger consideration in construction.
This in terms of health and safety policy as well as managing disruption risk.
Thefts of charging cables pose yet another obstacle to appeal of electric vehicles
Thieves are stealing copper wiring from EV chargers which renders the charger unworkable.
This can impact adoption of EVs and investment in infrastructure.
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.