Deep Insight: Why Preconstruction Is Becoming the Focus for Construction Startups
This year, the biggest shift in Formwork Labs, an AEC accelerator’s application data, was the stage startups are building for. Preconstruction, the planning phase of a project, ranked first.
It was a surprise as in previous years most solutions targeted the construction and operations phase. So to understand why, I asked Steve Dell’Orto, who founded ConCntric, a preconstruction intelligence platform.
When Steve joined a general contractor back in the 90s, the focus was on how to build faster, and investment was made into operations and delivery. Over time, that shifted as the question became: how can we plan better to derisk and improve margins?
This shift wasn’t just led by contractors, but rather the owners who began to explore more collaborative delivery models.
For years, Design-Bid-Build (DBB) was the industry standard, which is where the owners worked with designers to produce drawings in isolation, then invited contractors to bid. Contractors competed on lowest price, even when they identified gaps or risks in the plans.
Raising those issues upfront often meant losing the job, so instead, they surfaced later as RFIs and change orders.
This shortcoming led to the rise of collaborative delivery models.
An example is Design-Build (DB), where the contractor is brought in as part of the team, helping to shape the design and advising on constructability challenges or lead times which impact material selection.
It’s valuable due to the ‘1–10–100 Rule’.
A change costs $1 to fix in the design phase, $10 during construction, or $100+ after project completion. These benefits have led to collaborative delivery models growing in popularity, and Design-Build is expected to account for 47% of US construction spending by 2028.
Under DBB, preconstruction workflows were limited, as they’d bid on a defined set of drawings.
But when DB rose to prominence, Steve realised there was a gap in the market, and he founded ConCntric. But this phase is much more challenging to build solutions for.
According to Steve, the construction phase has only 6 key project management workflows:
Managing payments and cost reporting
RFIs
Submittals
General Communication
Writing Meeting Minutes
Change Orders
But preconstruction is more iterative and non-linear and has over 40 workflows. That lends to more complexity and more opportunities for new solutions.
So as collaborative delivery models continue to grow, startup formation is moving upstream toward preconstruction, where there is yet to be a clear winner.
In this issue there are:
9 Startup Fundings
1 Startup Emerged from Stealth
16 Policy and Regulatory Changes
3 New National Infrastructure Projects & Priorities
0 New investment funds
0 Acquisitions
6 News articles
51 new jobs posted - view here
Reading time: 14 mins
As a heads up for any founder reading this, EllisDon, one of the largest contractors in Canada, just opened their accelerator program. It’s up to its 4th cohort and I’ve heard great things from founders who’ve gone through.
One of the cool things they offer is the ability to test and validate your solutions on a construction site as well as a tailored pilot program. If you’re interested, here’s the link to apply.
P.S if you run an AEC focused accelerator program, let me know! Happy to share it with founders and create a list of programs to check out.
Startup Funding
AI
Hardline, a Californian startup, raised $2m in Pre-Seed funding from investors including Suffolk Tech and Nirman Ventures. They are building a platform that captures conversations from phone calls and on site discussions before automatically transcribing this into structured documentation such as RFIs, punch lists, change orders etc, which when approved, triggers related workflows such as email updates or a task push into Procore. More here.
Notes:
This application is another example of the criteria the Zacua Ventures mentioned they review when investing in AI startups.
Workflow Substitution
Hardline doesn’t augment an existing tool, instead it replaces the need to open Procore, owning the outcome, not just the tasks.Owns the Authoring Layer
It captures data at the moment of creation being the phone call or meeting. This gives them access to net new proprietary and non-public data.This in turn means:
Data Control
As users interact with Hardline, they generate unique data. It means Hardline starts to learn based on user feedback including what action items are valuable and how to structure RFIs or Change Orders correctly based on edits made.System Training
This feedback creates training data for Hardline and a moat which other startups can’t access.
Even without the integration and workflow substitution, I personally really like the voice first approach.
I’d spend so much time driving around on construction sites and it is the easiest time to make phone calls but often I’d have to pull over to take notes.
Additionally, a more novel use case I’d like to try is if to use Hardline in a meeting with myself.
As I am driving around, I’d like to say aloud my site report and follow up items. If it could transcribe this and create action items which I can review when I am at my desk, it would save me time.
Robotics
August Robotics, a Hong Kong startup, raised $30m in Series B funding. They are building a modular robotics platform which can ingest project plans, localize robots on site to plan and execute tasks autonomously as well as coordinate multiple robots in a fleet. They currently cover use cases such as downward drilling robots, floor marking and industrial layout. More here.
Finance
Handle, a San Francisco startup, raised $27m in Series B funding. They are building an end to end solution for construction finance supporting compliance, documentation and payment workflows from lien and notice management, waiver management and compliance automation to collections and receivables and risk visibility. More here.
Green Materials
LignoSphere, a Finnish startup, raised Pre-Seed funding (undisclosed). They transform lignin, a forestry industry side stream, into uniform and industrially usable nanospheres which can be used in coatings, adhesives, paints, and construction-related materials. More here.
Workforce Development
Elephant Company, a Berlin startup, raised €5m in funding. They are building an AI powered training platform for blue collar workers which operates as an end to end training and communication platform with mobile miro-learning, an AI course builder that turns documents into interactive training and an AI assistant training on companies knowledge bases which can be queried in the field while work is being completed. More here.
Notes:
I find training solutions focused on blue collar trades to be one of the most interesting subsegments in construction.
The reason why is that 41% of the US construction workforce is retiring by 2031.
Even if we successfully train new workers, the industry is still facing a major experience gap.
Construction is an industry built on tribal knowledge and much of what people learn comes from years on projects, exposure to edge cases, and seeing how experienced teams solve problems in the field.
I’ve felt this firsthand as when I started I was often told there is no substitute for experience.
But the more time I spent on projects, the more I realized that many problems I faced were not new problems, someone else on the team had almost always faced them.
In many cases, the real challenge is simply routing the issue to the right person with the right context.
What’s interesting is that much of this knowledge is technically documented already in Site Reports or RFIs, scattered across project servers.
AI creates an opportunity to surface the information in real time as well as transfer that knowledge via microlearning more effectively.
Workforce Management
Findd, a Utah startup, raised $21m in funding. They are building a workforce management platform for frontline workers including construction helping across the lifecycle from hiring, scheduling, time capture, compliance and payroll prep including offering real time cost control, biometric verification and automatic application of union rules, job-specific overtime and multi-state labor laws. More here.
Blink, a Boston startup, raised $17m in funding. They are building a mobile first employee experience platform which connects people, systems and culture in an app and helps management have real time insight into trends such as workforce feedback, productivity, sentiment and turnover, operating across industries including construction. More here.
Notes:
This solution has gained most traction in the hospitality sector, however many of the features seem to translate to construction.
For example, one GC mentioned to me the challenges of finding a communication application which allows them to send messages based on user roles.
That means being able to send a blast out to everyone or to restrict to only site managers or PMs.
In WhatsApp this process is manual or requires the creation of multiple group chats.
Blink is able to send targeted team updates, automate posts and set mandatory reads.
Smart Cities
REPS, an Austrian startup, raised $23.6m in funding. They have developed a ‘road power plant’ which is installed directly on existing road infrastructure and harvests energy from trucks and cars driving over it. More here.
Other - Inspections
Scope AI, a London startup, raised $20m in funding. They are building an AI driven platform to automate reporting for the testing, inspection, and certification industry, focusing on the heavy asset industry including infrastructure and energy helping teams to capture findings from the field, access relevant previous context and automatically generate reports. More here.
Out of Stealth
Conaxity, a Canadian startup, emerged out of stealth. They are building a platform that supports jobsite equipment sharing for both rented and owned equipment, allowing subcontractors to use equipment from a shared onsite pool instead of individualized management through the provision of digital keys and bluetooth connective as well as integrated telematics. View their website here.
Notes:
The more I dug into this problem, it seems quite nifty.
Subcontractors often manage their own equipment orders resulting in machines arriving from multiple different suppliers with limited oversight and creating congestion.
With this solution users are able to ‘book’ time via the shared equipment pool including both rented and owned equipment, preventing duplication and using digital access controls.
Interestingly, they offer a billing as a service option where the subbie can be charged on a pay per use basis of the equipment.
Policy and Regulatory Changes
The U.S. Environmental Protection Agency (EPA) proposed a new rule to revise the Clean Air Act’s (CAA) New Source Review (NSR) preconstruction permitting program.
This would allow owners and operators to begin certain non-emitting construction activities before obtaining an NSR permit.
Specifically, EPA proposes to:
Revise the definition of “begin actual construction”;
Add new definitions for the terms “pollutant-emitting activities” and “commence construction”; and
Make additional changes to clarify the distinction between the construction of a stationary source and the construction of non-emitting components or structures.
If finalized as proposed, EPA’s rule would allow companies (at their own risk) to perform certain non-emitting construction activities.
This includes building foundations, cement pads, and office buildings, before obtaining an NSR permit.
House committee agrees to $580B surface transportation legislation
The Transportation and Infrastructure Committee leaders agreed to a five-year, $580 billion surface transportation bill.
It directs $65 billion to rail programs and $41 billion to discretionary grant programs.
The bill authorizes a total of $87.6 billion from the mass transit account of the Highway Trust Fund over fiscal years 2027 to 2031.
Trump Administration Aims to Speed Oil Permitting in Alaska
The Trump administration plans to streamline the permitting process for oil developments inside the National Petroleum Reserve-Alaska.
The Interior Department initiative aims to establish a new permit framework for building and operating oil production sites and related infrastructure within the reserve.
It would allow qualifying projects to be authorized in just 30 days.
Biden Union Contracting Order Suffers Legal Setbacks But Endures
Biden’s 2022 executive order requires companies to have project labor agreements.
These are pre-hire collective bargaining agreements with one or more labor organizations that establish terms and conditions of employment for a specific construction project.
It’s required to win federal construction contracts worth $35 million or more.
The Trump Administration has left the executive order alone, and said that US agencies should use PLAs “when those agreements are practicable and cost effective, and blanket deviations prohibiting the use of PLAs are precluded.”
Trump admin to extend financial aid to skilled trades training in July
Beginning in July, students across the U.S. will be able to use Pell Grants to help pay for short-term workforce training programs including skilled trades.
It historically was only available to low-income students pursuing college degrees.
What Is an Energy Emergency? The Trump Administration Says It Alone Decides.
The D.C. Circuit Court of Appeals is hearing the first challenge to a series of orders that have blocked retirement of aging coal and oil plants.
The Administration argued before a panel of federal judges that it alone has the power to decide whether an energy emergency exists.
The state of Michigan and environmentalists argue that the Department of Energy has swept aside the procedures and safeguards of the 91-year-old Federal Power Act.
The precedent the case sets could be far-reaching.
Oklahoma Law Opens New Front in AI Data Center Power Debate
The Governor signed House Bill 2992, the “Data Center Consumer Ratepayer Protection Act of 2026,” into law.
The measure requires large-load customers that add 75 MW or more of demand to sign long-term agreements covering infrastructure costs tied to their projects.
This is instead of spreading those costs across the general rate base.
Power prices are up 76% on America’s biggest grid, and a watchdog is pointing fingers
Wholesale prices for one megawatt-hour of electricity rose to $136.53, up from $77.78 at the same time last year.
Notes:
The article comments:
“The U.S. power grid was not designed for the electricity demands of an AI-driven economy, and the gap between what the grid can deliver and what the industry needs is widening.”
As reports continue to highlight supply side power constraints and resultant increases in prices, regulatory pressure and government scrutiny on data centers will grow.
Related:
Data Center Boom Tested by Permitting Hurdles, Political Tension
A 2026 report from Foley & Lardner found that nearly 48% of US data center development breaks down or stalls at the zoning and permitting stage.
House Backs $157 Billion Military Construction-VA Spending Bill
The US House Friday threw its support behind $157 billion in discretionary spending for military construction projects.
The vote was 400-15.
The bill includes $19.2 billion for military construction and family housing for fiscal 2027.
Maryland regulators put controversial gas line policy on hold
The Maryland Public Service Commission is delaying a policy that would make new gas customers pay the full cost of pipeline extensions to their properties.
The about-face on a policy that was set last summer is among the first major decisions by the commission’s new chairman.
They said they needed more information about the policy’s impact on the state’s overall economy and its housing market.
New York Is Working on a Blueprint for Greener Buildings
A city-funded study is aiming to understand the climate impact of buildings from the steel beams, to the concrete and glass used for windows and the effort will shape new building standards.
The team is focused on embodied carbon.
This is the emissions produced during the entire life cycle of construction, including manufacturing, transporting, installing and disposing of materials.
Reps. Garamendi and Thompson Introduce Bill Protecting Critical Infrastructure, Joined by MTC
The ADAPT Assets Act, if passed, would establish a national framework for cost-effective disaster preparedness.
It would provide $2 billion every year to support the development of 10 large-scale critical infrastructure projects.
Novel Santa Barbara County law mandates locals-first marketing of new homes
The county Board of Supervisors has unanimously passed a first-of-its-kind law.
It requires developers to market their newly built, market-rate homes to people who live or work in South Coast areas or the Santa Ynez Valley before ads appear anywhere else.
It applies to any development with five or more dwelling units which must be advertised for 12 weeks locally first.
Developers’ marketing plans will need county approval as part of the project permitting process.
The construction and infrastructure sector is preparing for a shift toward durability-driven and performance-based concrete design.
This is following a high-level national workshop organised by the National Council for Cement and Building Materials (NCB) in New Delhi.
It brought together leading experts to deliberate on the proposed revisions to India’s most important concrete design standard, IS 456.
The proposed IS 456:2025 draft code is expected to introduce significant changes in how concrete structures are designed, tested, and maintained across India.
The revised code is expected to place stronger emphasis on durability-centric design, performance-based specifications, quality assurance systems, sustainable construction materials and improved construction practices.
India to shrink zones around nuclear reactors to free up land, sources say
India plans to reduce the size of exclusion zones around nuclear plants to free up land for reactor expansions.
At present, all nuclear reactors in India have a minimum buffer of about 1 km (0.62 miles) around reactors where no habitation or economic activity is allowed.
The revisions would cut the land needs by half for large reactors and by nearly two-thirds for small units.
India aims to expand nuclear capacity to 100 gigawatts by 2047 from about 8 gigawatts.
UK
Grid Connection Delays Threaten UK’s Offshore Wind Push
Most of the UK’s recently announced offshore wind farms are stuck in a queue waiting for grid connections.
The absence of connection agreements can increase costs and potentially even derail a project, creating uncertainty around £15 billion ($20 billion) of planned offshore wind investments.
It also threatens their goal for 95% clean power generation by the end of the decade.
25 gigawatts of offshore wind is still waiting for a grid connection.
National Infrastructure Projects & Priorities
US
Retail Construction Completions Hit 20-Year Low
US retail construction completions fell to 4.7M SF in Q1 2026, marking the lowest quarterly delivery volume in two decades.
High construction costs and labor shortages continue to limit new retail development.
Asia
Disaster Resilience Investment Has Hit $100 Billion in Asia
$100 billion has been invested in the last 5 years with water and infrastructure projects attracting the majority of the capital.
More than 90% of the investment between 2021 and 2025 was made by state-related organizations or development finance institutions
Revenue generated from adaptation solutions could hit $4 trillion by 2050.
Investments are focused on infrastructure, energy and industrial retrofitting, and sub-sectors like climate-smart crop inputs and distributed energy mini-grids.
India
India’s strategic $9 bn megaport plan for pristine island
Designed to rival China’s investments around the Indian Ocean, New Delhi’s project will be built on Great Nicobar Island.
Roads, bridges and docks will be built on the island, opening it up for port activity and tourism, and serving expanded military installations.
News
Another Indian contractor sets up shop in the UAE
Construction and transport projects under execution across the GCC are approaching USD 951 bn.
The broader regional pipeline now exceeds USD 2 tn, driven largely by Saudi Arabia and the UAE.
Energy efficiency ratings rely on generic data, usually derived from averages or regulatory default values of construction materials as opposed to a building’s actual thermal behaviour.
This is as in practice most digital libraries represent materials using average values.
Where AI is creating real value in real estate (McKinsey)
The rise of the state transmission authority
As the West Dries Out, a New Generation of Dams Rise
US homes are older than ever, but local permitting systems could slow down essential renovations
Analysis found that obtaining a permit adds, on average, 23 days to residential project completion timelines.
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.
The NavigateAI note is interesting because it shows how broad the “field knowledge on demand” category could become. The challenge is not just giving field teams faster answers, but making sure those answers are grounded in the right code, spec, scope, and company knowledge at the moment of work. Curious whether you see field copilots becoming a wedge into broader operational systems of record over time.
Blue-collar trade training solutions remain an overlooked optimization vector. The market assumes software-driven margin expansion is reserved for white-collar workflows, but replacing human-led industrial onboarding with specialized physical-world AI instruction models changes the labor unit economics entirely. The stickiness here is massive because switching costs involve physical operational downtime.