Last Week in ConTech - 26 August 2024
Thoughts on AI adoption in AEC + Why building highways in the US is so expensive
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:
12 Startup Fundings
7 Policy and Regulatory Changes
2 US election policy updates
7 New National Infrastructure Projects & Priorities
0 New investment funds
12 Acquisitions
9 News articles
46 open jobs - view here
Reading time: 15 mins
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Startup Funding
Cement
Fortera, a Californian startup, raised $85m in Series C funding. They develop low carbon cement. More here.
[View open jobs - 2 roles in Sales, 1 role in Project Management, 4 roles in Other]
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.
As mentioned in this April issue, they opened the first industrial green cement and carbon mineralization facility in the US.
Building Decarbonization
Optiml, a Swiss startup, raised $4m in Pre-Seed extension funding. They are developing a platform which creates renovation plans and investment strategies for the decarbonization of buildings to ensure compliance with environmental regulation. More here.
[View open jobs - 1 roles in Software, 2 roles in Operations, 1 role in Other]
Notes:
As part of the Energy Performance of Buildings Directive, EU countries will target 16% of their worst-performing non-residential buildings for renovation by 2030 and 26% by 2033.
Construction Management
Inertia, a Californian startup, raised $3.17m in Seed funding. They are developing a construction management platform including intelligent construction drawings which is a visual approach to construction allowing a drawing set to maintain the rich data provided in the design phase through the construction phase (instead of being flattened to 2D PDF). More here.
AI
Trunk Tools, a New York startup, raised $20m in Series A funding. They are developing an ‘AI brain’ which ingests unstructured project data and structures it into searchable data which field workers can ask questions and get accurate answers. More here.
[View open jobs - 7 roles in Software, 2 roles in Operations, 1 role in HR, 4 roles in Product, 1 role in Marketing, 4 roles in Sales]
Notes:
This solution is interesting if my understanding of their offer is correct (I have not seen a demo of the product).
The reason why is that AI could become an interesting ‘lock in’ mechanism for startups.
Right now, many construction companies are hesitant to adopt AI due to concerns about data security.
A way to address these concerns is by providing deployable AI infrastructure that is trained on a company’s data and resides on their servers.
This is possible with the use of Federated Learning which offers a decentralized approach to training AI models while ensuring data is not shared (this approach is gaining traction in manufacturing e.g. OctaiPipe).
Once deployed on a company’s servers, the product becomes incredibly sticky (‘locked in’) as switching AI products results in training costs and time.
With these ‘broad’ AI solutions which act as general knowledge agents, the challenge is in adoption is training and upskilling the workforce in how to use them.
A novel GTM is to initially provide consulting services to unlock the insights for companies on a project by project basis.
As trust and scope of the product grows, the aim should be to deploy the tool throughout the organization and provide no code / chat interfaces which are more accessible for employees enhancing its value as AI as is trained on more company specific data.
(Note: I’m not sure if Trunk Tools deploys their AI tool on company servers).It’s worth noting that Microsoft, a company already used by nearly every construction firm, could bundle its Copilot into Office Suite potentially allowing them to access company-specific data.
Currently, Copilot is used for general business improvements (e.g., organizing meetings, secure data summarization / collation) rather than construction-specific use cases.
In this future this could change and it is integral for construction AI companies to identify a clear use case and moat to differentiate their offerings.
As a side note, I do believe that AI will transform the way we work in AEC with even generic tools such as ChatGPT and Claude providing immense value.
I’ve spent the last 6 months designing, delivering and facilitating an AI training program learning that awareness and upskilling are key pain points for adoption.
When training, it can be valuable to frame AI as another tool in people’s toolkits to complete tasks faster and provide training on:
When and where its best to use AI (it doesn’t work great on all tasks)
How to actually use AI in tasks (e.g how to prompting)
Feedback has been immensely positive and I’ve seen people move from skeptics / detractors to enthusiastic adopters calling AI’s capabilities ‘life-changing.’
I firmly believe more AEC organizations need to run upskilling programs and this will be a massive productivity unlock for the industry and those that are not implementing this will fall behind.
If you’ve been building or developing training with AI, I’d love to hear from you to better learn what best in class AI training and adoption in AEC looks like.
Related:
If you’re curious about the above concepts, I have outlined a number of them in these LinkedIn posts:
Renewable Site Energy
Watermeln, a Dutch startup, raised €3.5m in funding. They develop and lease hydrogen generators which provide temporary green electricity to off grid locations including installation, monitoring and maintenance with traction in the construction project sector. More here.
Notes:
This solution is seeking to replace diesel generators on site.
This is valuable as construction sites don’t always have access to the grid (we need to build it first).
Nuclear
Aalo Atomics, an Austin startup, raised $27m in Series A funding. They are developing nuclear reactors with the goal of making nuclear reactor deployment highly predictable and economical. More here.
Notes:
Nuclear has gained strong bipartisan support in the US as demonstrated by the passing of the ADVANCE Act (as mentioned in this issue).
Aalo Atomics specific mission is to make small nuclear reactors which can power anything from a small data center or gigafactory to a large city.
This goal is emblematic of the wider energy conversation where large energy users are seeking guaranteed long term clean energy supply (e.g Amazon buys nuclear-powered data center from Talen).
This has resulted in a rise of interest in Small Modular Reactors.
Aalo Atomics have completed the conceptual design of their factory fabricated microreactor and it remains unclear what their delivery / construction mechanism will be.
This represents an opportunity for contractors in the data center vertical as it may be required in the future to coordinate construction of the data center and the related energy infrastructure.
Drones
Wingtra, a Swiss startup, raised Series B1 funding (undisclosed). They develop high precision VTOL drones for mapping and surveying and are used in the construction sector for tasks such as progress monitoring and cut and fill calculations. More here.
[View open jobs - 1 role in Finance, 3 roles in Marketing, 1 role in Other]
Data Centers
Apheros, a Swiss startup, raised $1.85m in Pre-Seed funding. They are developing unique foam structures which are ideal for high performance cooling applications such as cooling data centers. More here.
[View open jobs - 4 roles in Other]
Notes:
Cooling of data centers can account for up to 70% of their energy use.
The rise in AI workflows and energy availability is resulting in regulatory concern with Ireland, Germany, Singapore and China imposing rules on building new server farms.
Dublin has rejected a number of new permits for data centers as they are to account for 32% of national electricity demand in 2026.
Evroc, a Swedish startup, raised €42m in Series A funding. They are developing a sustainable hyperscale cloud to return data sovereignty to Europe. More here.
Notes:
A hyperscaler is a type of large-scale data center.
Mapping
Space Intelligence, a Scottish startup, raised funding (undisclosed). They use satellite data to provide nature mapping which is used to support all phases of project development and investment for developers who are looking to identify, create, and monitor high-quality nature-based solutions. More here.
[View open jobs - 1 role in Other]
Power Grid
Grid Status, a Chicago startup, raised $8m in funding. They are developing a solution which makes real time grid data widely accessible and is currently used by grid operators and large energy project developers. More here.
[View open jobs - 2 roles in Software, 2 roles in Sales, 1 role in Support, 1 role in Operations]
Notes:
It is difficult to access up to date and accurate information on the energy grid.
As the grid becomes increasingly decentralized and incorporates intermittent renewable energy, it is even more complex to get accurate information.
Other
WorkHub, a Houston company, raised funding (undisclosed). They are a vertically integrated real estate development company providing flexible small-bay industrial space solutions providing flex space for small and medium sized businesses. More here.
Policy and Regulatory Changes
Big Tech’s bid to rewrite the rules on net zero
Big tech is to become some of the biggest energy users in the race to develop AI threatening net zero commitments.
The International Energy Agency has estimated that the electricity consumed by data centers will more than double by 2026.
Microsoft’s emissions rose by 30 per cent between 2020 and 2023, while Google’s rose by almost half between 2019 and 2023.
Big Tech has been funding and lobbying the Greenhouse Gas Protocol, the carbon accounting oversight body, including financing research which could influence a once-in-a-decade rewrite of the rules governing how pollution from power use is disclosed.
The current reporting requirements date back to the 90s and the protocol's rules on carbon accounting are cited in the EU and proposed SEC reporting requirements for larger companies.
Notes:
Big Tech have been large investors (via offtake agreements) in renewable energy projects to decarbonize their data center operations.
How these rules are written could influence the development of renewable energy as well as novel clean energy technology such as geothermal.
New York City releases Local Law 97 guide, updates to building categories
Building owners covered by Local Law 97 must submit their first annual compliance reports to the Department of Buildings by May 1.
The law requires buildings over 25,000 square feet to cut 40% of their emissions by 2030 and reach an 80% reduction target by 2040.
Federal agencies plan to shed millions of square feet of office space amid hybrid work shift
Over 24 million square feet of “underutilized” owned and leased space exists across the government’s portfolio.
The cost of the space is ~$81m.
A memorandum was issued which sets requirements for federal office space design standards and occupancy measurement and reporting including deadlines for agencies to report how they’re calculating occupancy and to start monitoring and reporting those numbers.
With Self-Driving Vans, Hamburg Tries to Make Microtransit Work
By 2030, the city wants 80% of all journeys to be made by public transportation, bicycle or on foot, with every resident able to reach a bus or train within five minutes.
They plan to launch a fleet of up to 20 autonomous electric mini buses that initially will offer free on-demand rides across up to 50 square kilometers
The pilot phase of the program is set to run to 2026.
The larger vision is to expand the fleet to as many as 10,000 vehicles by 2030 to fill in current transit gaps and help the city achieve its emissions goals.
Notes:
A trend has been to give cities centers back to people removing private cars.
The difficulty has been the development of public transport options to support this.
Autonomous vehicles provide an on demand and cheaper alternative to large scale infrastructure build out (e.g trams or metros).
It is likely the city centers in the future will become autonomous vehicle only zones.
Agency Votes to Replace Official Accused of Rushing Start of Seabed Mining
The agency which has jurisdiction over any future mining in international waters replaced its leader.
Environmentalists argued the previous leader was working behind the scenes with private contractors to try to accelerate the start of seabed mining.
The new leader has said she does not support a moratorium on seabed mining or a formal pause in the start of the effort.
Seabed mining is in focus as electric batteries have increased demand for cobalt and nickel which are found in high concentration in rocks at the bottom of the Pacific Ocean.
The agency is preparing to consider applications for industrial-scale mining, conducted by bulldozer-like machines dropped to the ocean floor.
Notes:
There is concern over the availability of critical minerals required for electrification
As outlined in this thread, it is possible that Earth has enough supply of critical minerals, however it appears lower due to a lack of mining innovation.
Mining technology is not advanced, the deepest mines are only 3-4 km from the surface (the Earth’s crust is 40-70 km deep).
A reason for this is that mining is capital and labor intensive requiring large organizations which can be a tempting target for nationalization.
Given the current constraints, finding mineral wealth is a function of holding a lot of land and surveying it effectively (the latter of which many countries have not done).
Rajasthan mandates rainwater harvesting for buildings to combat water scarcity (India)
All new residential buildings covering an area of 225 square meters or more, as well as commercial buildings of 500 square meters or more are required to implement rainwater harvesting facilities.
This is aimed at enhancing groundwater levels in the region, which often faces severe drought conditions
New York encourages electrification with new grid planning process, affordability pilot
A new grid planning framework has been developed to accommodate further building and vehicle electrification needs.
It will ensure utilities are coordinating across geographies and service territories as they expand their distribution grids.
Electricity demand in New York could almost double over the next two decades.
US election policy updates
This section will highlight the construction related policy offerings by each candidate in the lead up to the US election. This is important as this will impact the shaping of US regulation, policy and investments in the construction industry.
Between Attacks on Electric Cars, Trump Says They’re ‘Incredible’
Trump's attacks on EVs have shifted from the reliability and value of electric vehicles to the federal incentives for consumers to buy E.V.s, and to environmental regulations designed to prod automakers to step up production.
He’s said that anyone who wants to buy an electric vehicle should be able to but the government should not shape the car market.
Notes:
This can have influence on the deployment of tax credits and investment in EV manufacturing plants (and construction).
This sector has grown under Biden rising from 2 factories in 2019 to now there are about 34 battery factories either planned, under construction or operational in the country.
Related:
Kamala Harris Targets Apartment Rent Increases in First Policy Speech
Harris pushed for Congress to pass legislation introduced early this year designed to prevent landlords from using algorithmic systems for raising rents on apartments.
This takes aim at property management software products which have enabled landlords to coordinate prices to increase rental rates in the same market.
She called for construction of 3 million new housing units during her first term in office if elected, an increase from 2 million new homes the Biden administration had previously called for.
National Infrastructure Projects & Priorities
US
Chart: Almost all new US power plants are carbon-free
In the first half of this year, developers and power plant owners built 20.2 gigawatts (GW) of electricity generation capacity, a 21 percent increase from the first half of last year.
97 percent of the new capacity added this year came from carbon-free solar, battery storage, wind, and nuclear projects.
Solar made up 59% of new installations.
India
India’s US$20.5 billion road building plans
The National Highways Authority of India (NHAI) has set out its plans for a US$20.5 billion road building programme during 2025.
This is inline with their US$268.4 billion transport infrastructure plan.
The Highway Development Plan would see the construction of around 30,600km of roads by 2032. This would involve building 18,000km of high speed roads.
Union Cabinet approves metro projects in Bengaluru, Pune, Thane
Three new metro lines have been approved with US $3.6b in funding.
India has 1,018 km of metro lines under construction placing the country behind only China and the US.
Over the last ten years, 700 km of new Metro lines have been made operational.
China
China’s Top Utility Completes World’s Biggest Pumped Hydro Plant
The last of 12 units have begun operations.
Two units have variable-speed technology which allows the station to adjust to power grid loads at a faster pace.
The plant has 3.6 gigawatts capacity and China is seeking to expand capacity to 120 gigawatts by 2030.
Notes:
Pumped hydro works by pushing water to uphill reservoirs during times of excess power.
When more energy is required, gravity pulls the water back down through a turbine that generates electricity.
Australia
A $20 Billion Plan to Export Power to Singapore Wins Approval
The first stage of a plan to export solar electricity from Australia to Singapore gained approval.
The link involves a 4,300-kilometer (2,670-mile) subsea power cable connecting a solar farm in Australia’s Northern Territory with more than 20 gigawatts of capacity to the city-state.
Ukraine
Ukraine approves $20 billion plan to increase renewable energy production by 2030
Ukraine plans to boost renewable energy’s share in the country's energy mix to 27% by 2030.
The country's energy sector has lost half of its generating capacity as a result of Russian missile and drone attacks.
Distributed renewable energy is hard to take offline through attacks compared to centralized energy assets.
Vietnam
Vietnam positioned as magnet for major players in chip industry
Chips companies are expanding R&D operations in Vietnam due to competitive labor costs.
Vietnam targets to train 50,000 engineers for the semiconductor industry by 2030.
Notes:
As the US aims to de-risk its supply chain, South East Asian countries are seeing a wave of foreign investment.
Acquisitions
Sitemate, a construction project delivery and operational management no code solution, acquired Nomad Fleet, an asset management solution for equipment such as bulldozers and diggers. More here.
Infogrid, a smart building platform for facilities and building management, acquired Buildings IOT, a provider of adaptive buildings technology. More here.
News
Summary of C-Tribe’s Accelerating Tech Adoption in Indian AEC Industry panel by Chaitanya Bharech
The post highlights unique challenges and opportunities in the Indian market.
Why building US highways is so expensive
The U.S. overspends on its transportation infrastructure compared to its international peers.
Researchers found lower state DOT staffing levels correspond with higher project costs and a lack of contractor competition drives up prices
The hard stuff: Navigating the physical realities of the energy transition (McKinsey)
The energy transition is in its early stages, with about 10 percent of required deployment of low-emissions technologies by 2050 achieved in most areas.
About half of energy-related CO2 emissions reduction depends on addressing the most demanding physical challenges.
The Future of Water Management (Lotus Capital)
Tech industry taps old power stations to expand AI infrastructure
Companies need vast tracts of land and resources that industrial sites can provide
Urban roadway in America: the amount, extent, and value
The research found that a little under a quarter of urbanized land is dedicated to roadway.
The land was worth around $4.1 trillion dollars in 2016
Conducting a back-of-the-envelope cost-benefit analysis, they found that the country likely has too much land dedicated to urban roads.
Clean Energy Resources to Meet Data Center Electricity Demand (Department of Energy)
Los Angeles Olympics in 2028 will be ‘no-car Games,’ with venues accessible via public transit
Lendlease reports $1B loss as it sells off US work
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.