Last Week in ConTech - 28 October 2024
M&A in home services contractors + Clean energy workforce training
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:
14 Startup Fundings
10 Policy and Regulatory Changes
0 US election policy updates
8 New National Infrastructure Projects & Priorities
1 New investment fund & Accelerator
0 Acquisition
7 News articles
22 new jobs posted - view here
Reading time: 15 mins
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Startup Funding
Construction Management
BuildPass, an Australian startup, raised $7.5m in Seed funding. They have developed an AI driven platform for construction management offering asset management, safety, quality assurance and site management tools to improve productivity. More here.
[View 8 open jobs - 2 roles in Software, 1 role in Marketing, 1 role in Product, 3 roles in Sales, 1 role in Operations]
Notes:
BuildPass has their pricing information displayed on their website (this is quite uncommon as startups usually don’t publicly share this information).
I found it interesting as the pricing tiers varied based on number of users as well as level of training and support (among other features).
As expected, more training and support is provided at the higher tiers with in person training options available for Pro customers.
Having such a clear framework clarifies expectations and I am curious how this has impacted their sales flow vs the standard (and more opaque) pricing process where it is revealed later.
On a side note - one of the first events / panels I spoke at was actually sponsored by BuildPass - so I’m super stoked to see them kicking goals. The team is really great.
BiltOn, a New York startup, raised $15m in Series B funding. They have developed construction operations and risk management software which helps owners and general contractors to manage their workforce via tools such as automated time tracking for payroll, daily logs, facial recognition for workforce verification and more. More here.
Data Management
Speckle, a UK startup, raised $12.5m in Series A funding from investors including Foundamental. They have developed a centralized platform and collaborative data hub which makes it easier for companies to exchange information in 3D formats, allowing users to unify their tech stack, collaborate on models with instant changes and automate workflows. More here.
[View 1 open job - 1 role in Product]
Notes:
For anyone who has used ProjectWise and found themselves locked out of a file because someone has checked out a model / drawing and gone on lunch, collaborative mode is life changing.
Building Materials
Furno, a Californian startup, received $20m in grant funding. They are a zero emission cement producer which builds small, modular and more energy efficient cement plants and the funds will be used to build eight micro-kilns at a concrete plant in Chicago. More here.
ClearVue Technologies, an Australian company, raised $7.5m via institutional placement. They have developed a solar photovoltaic window glazing technology which can be used to power buildings. More here.
Generative Design
Pantheon AI, a San Francisco startup, raised $25m in funding. They have developed AI enabled architecture software which helps property developers, owners and tenants to generate floor plans, refine the design and provide construction ready documents. More here.
[View 1 open job - 1 role in Architecture]
Risk Management
Urbint, a Miami startup, raised $35m in funding. They have developed AI enabled risk management tools to help utilities and critical infrastructure companies manage storm and extreme weather events, mitigate safety threats to workers and prevent damage. This includes standardizing safety processes, identifying risky excavations and using historical and project data to stop safety incidents before they happen. More here.
[View 9 open jobs - 6 roles in Software, 1 role in Sales, 2 roles in Finance]
Home Services
Zephyr, a New York startup, raised $60m in funding. They are a technology enabled home repair and maintenance services focusing on services such as air conditioning, heating, plumbing and electrical work. More here.
Notes:
To go to market, Zephyr acquires local service providers in target markets.
They integrate them into a unified technology and productivity platform which drives growth and centralizes support in recruiting, training, marketing, finance, operations effectiveness etc.
This is again an example of a startup vertically integrating.
Instead of selling their solution to the industry, they are self performing using the solution to increase their margins, drive efficiency and offer superior service to their competitors.
I’ve written my thoughts on this trend with two examples here and here.
Related:
America’s New Millionaire Class: Plumbers and HVAC Entrepreneurs
Private-equity investors have purchased nearly 800 HVAC, plumbing and electrical companies since 2022.
Critical Infrastructure Monitoring
FiberSense, an Australian startup, raised $14m in funding. They provide ‘fiber-optic sensing technology as a service’ which uses existing fiber-optic cables (used for internet) to help clients such as cities understand traffic movements or to protect critical infrastructure. More here.
Notes:
This solution is able to use existing infrastructure to provide new and unique insights.
For cities it is able to provide an understanding of city level traffic movements and can be used as an input for maintenance or planning road design.
It is also able to detect construction work near infrastructure and proactively inform teams of potential underground service strikes (it can track the vibrations).
They also have a GeoTech solution for shear wave measurement which helps engineers to understand soil and rock characteristics.
Building Decarbonization
Aether, a San Francisco startup, raised $2.5m in Seed funding. They have built an AI first platform to streamline the process of designing, selling and managing rooftop solar installations including providing a CRM tool from pre-construction phase to delivery, a proposal creator and a CAD engine to generate 3D roof faces and design solar layouts. More here.
[View 4 open jobs - 4 roles in Software]
Aira, a Swedish startup, raised €63m in Series B funding. They are a vertically integrated direct to consumer clean energy platform offering smart heat pumps via monthly plans as well as clean energy tariffs and solar solutions. More here.
Notes:
The energy transition towards Net Zero is an infrastructure transition.
It involves switching gas boilers for heat pumps and coal power for solar panels.
The problem startups in the building decarbonization sector are facing is the construction labor shortage.
We don’t have enough heat pump or solar panel installers to meet renovation requirements for emission targets.
To address this Aira has vertically integrated including having in house talent for the installation process.
To acquire this talent, they have established academies across its markets to upskill and train the next generation of clean energy experts and installers.
It’s a growing phenomenon with startups such as La Solive (France), Smalt and Montamo (Germany) using a training bootcamp model to either help external companies (like Aira) source workers or to hire-train-deploy for their own book of work.
Related:
Real Estate
Revyse, an Oregon startup, raised $1m in seed funding. They provide a vendor lifecycle management software for multifamily helping operators track and manage contracts and agreements through a centralized platform. More here.
Notes:
While not a specifically construction tech solution, Revise operates a marketplace for multifamily owners to search for and engage with potential vendors.
It includes categories such as construction management software, flooring suppliers or maintenance services.
This is intended to streamline the procurement process by offering transparent information such as production descriptions, pricing, integrations, demos and reviews helping buyers to make more informed decisions.
I have seen similar solutions such as aec+tech which offer similar services to help AEC companies find technology providers.
Revyse’s approach is interesting as the database is an ‘add on’ to increase engagement and adoption of their primary service - vendor lifecycle management software.
By tracking the software their customers most engage with, it helps them to prioritize integrations and move faster towards becoming a platform solution for multifamily operators.
Often database or media / information solutions are difficult to build and monetize as they rely on sponsorships (can affect the integrity of the service) or user subscriptions (people may stop paying once they find a solution - low lifetime value).
In this case Revyse fund the service via their software offering and can use the database as lead gen to attract more multifamily operators.
Hyperloop
Zeleros, a Spanish startup, raised €2.5m in funding. They develop hyperloop technology including feasibility studies on implementing a hyperloop route into a territory. More here.
Notes:
To achieve profitability and fund further hyperloop research, Zeleros is using its knowledge from 7 years of hyperloop development to provide engineering solutions for complex electrification and automation projects.
Other
Lumen Orbit, a Washington State startup, raised over $10m in funding. They aim to develop space based data centers allowing them to leverage abundant solar energy and use passive cooling to process data efficiently. More here.
Notes:
Data centers are a key construction vertical for companies.
In 2020 (prior to AI workflows), data centers were a $1.5b a year business unit for Turner Construction (ENR #1).
The challenge data centers are facing is that they use an increasing amount of energy, affecting power availability and countries' climate targets.
Due to this Ireland, Singapore and China have imposed rules on new server farms.
Lumen Orbit’s solution offers a way to overcome the energy challenge through the use of renewable energy and requiring less cooling compared to terrestrial construction (cooling data centers is challenging - cold environments are better).
If this solution is successful, it would be disruptive to construction companies in this vertical.
Policy and Regulatory Changes
Supreme Court rejects calls to put a hold on EPA power plant carbon rule
The EPA issued a rule in April requiring owners of coal fired and new gas fired power plants set to operate past 2039 needing to meet a carbon dioxide standard with compliance beginning in 2032.
This is equal to installing a carbon capture and storage system and running it at 90% efficiency.
The US Supreme Court rejected applications by utilities and others seeking to put a hold on the rule.
Notes:
If this rule is upheld it will result in the construction of carbon capture and storage systems across the country at eligible power plants.
Ontario to introduce legislation to speed up construction of highway projects (Canada)
The Building Highways Faster Act would designate priority highway projects to speed up construction.
The legislation would streamline utility relocations, accelerate access to property and property acquisitions and introduce new penalties for obstructing access for field investigations or damaging equipment.
It would allow regulation making authority to facilitate around-the-clock, 24/7 construction on priority highway projects.
Notes:
When accelerating construction projects, the primary challenge often lies not in budget but in streamlining regulatory and permitting processes.
This interview where Brian Potter (Construction Physics) spoke with Derek Thompson (The Atlantic) on why it’s so expensive to building stuff in America captures it well:
At a very high level, it’s basically a case of we’ve steadily made it more and more difficult to build things in the U.S. with rules and regulations, and have not had commensurate technology and productivity increases that have been able to offset that.
US Government Says Relying on Chinese Lithium Batteries Is Too Risky
A new document shows the Department of Homeland Security is concerned that Chinese investment in lithium batteries to power energy grids will make them a threat to US supply chain security.
Notes:
Geopolitics is having an increasing influence on construction spending.
The reason why is decoupling from China or China+1 strategies require the reengineering of supply chains.
This results in increased spending in new manufacturing facilities and infrastructure (roads, rail, ports) to service them.
Additionally, it can result in increased government funding if a sector is seen as integral to national security e.g. CHIPS and Science Act
Washington Gas, groups sue DC over net-zero building code that bans gas appliances
The code prohibits some buildings from using gas appliances, by 2027 at the latest.
It applies to all newly constructed and all substantially improved commercial buildings, including residential buildings over three stories.
The groups say that local laws on the use of appliances are preempted by the Energy Policy and Conservation Act (EPCA) making the code unenforceable.
Notes:
In the US, building decarbonization change appears to be championed first at the municipality level before moving upwards to federal.
This creates a patchwork of legislation and lawsuits from opposing parties.
To overcome this, municipalities are becoming creative in how they implement policy to preempt these cases.
Related:
DOE Announces Phase 1 Winners of the Building Envelope Innovation Prize
This targets high-performance, cost-effective secondary glazing systems to improve efficiency of commercial windows.
DOE selected seven semifinalists to receive $50,000 each for their design concept submissions.
Notes:
The acting director of the DOE’s Building Technologies offices stated ~40% of commercial buildings have single-pane windows.
These provide a thinner barrier compared to multipaned systems resulting in higher energy costs.
Less that 1% of windows are replaced annually because of high cost and occupant disturbance.
The funding went through two major discretionary grant programs, the National Infrastructure Project Assistance (Mega) grant program and the Infrastructure for Rebuilding America (INFRA) grant program.
It went to 44 projects.
This included projects which improved safety, mobility, and economic competitiveness, constructing major bridges, expanding port capacity, redesigning interchanges, and more.
The Federal Aviation Administration (FAA) is awarding $970 million from President Biden’s Bipartisan Infrastructure Law to 125 U.S. airports.
Brazil Implements Landmark Law For CCS Regulation
Brazil has passed new legislation, which is its first legal framework for Carbon Capture and Storage (CCS).
It focuses on regulating and inspecting activities involving the capture, transportation, and geological storage of carbon dioxide (CO2).
Notes:
This could impact the construction of carbon capture and storage systems in the country.
Massachusetts investing in commuter rail to relieve traffic congestion
The Massachusetts Bay Transportation Authority plans to spend nearly $2.5 billion in its 2024-2028 capital investment plan.
Ridership on the 12 lines and branches has returned to about 80% of pre-pandemic norms.
13 multifamily housing-related ballot measures to watch in November
There are over a dozen initiatives that are directly related to housing law, multifamily or landlord-tenant relationships.
One is California’s proposition to remove limits on local rent control - changes to this may have an impact on the supply and construction of housing.
National Infrastructure Projects & Priorities
US
U.S. approves mega geothermal energy project in Utah
The Interior Department’s Bureau of Land Management (BLM) gave final approval to Fervo Energy’s Cape Geothermal Power Project in Beaver County, Utah.
Once fully operational, the project could generate up to 2 gigawatts of electricity, enough to power over 2 million homes.
The BLM also proposed Thursday to speed up the permitting process for geothermal projects on public lands across the country.
Dominion unveils plans to add 21 GW of clean energy, 5.9 GW of gas generation by 2039
Electricity demand is growing to unprecedented levels.
Gas fired resources will be used to bridge the gap as the clean energy capacity comes online.
This includes ~3.4GW of offshore wind (in addition to 2.6GW under development), ~12GW of solar, ~4.5GW of battery storage.
California now has more than 13GW of battery storage
Installed battery storage capacity in California has grown from 0.5GW in 2018 to more than 13.3GW.
In the last 6 months there has been 3GW of growth.
California is 25% of the way to deploying 52GW of storage by 2045.
California’s first carbon capture project gets OK from Kern County
Kern County has signed off an oil company’s plan to permanently store greenhouse gas emissions underground in a depleted oil field.
This is California’s first foray into carbon storage and a potential new role for oil and gas companies.
The plan is to capture up to 48 million metric tons of carbon dioxide and inject the gas one mile underground.
Mexico
Companies to shift 9% more nearshoring to Mexico
Over the next two years the percentage of U.S.-serving supply chains located in North and South America will rise to 69% from 59%.
Mexico is expected to have its share of U.S.-serving supply chains rising to 36% from 27%.
Companies have been shifting away from “globalized” sourcing of goods toward “localized” supply chains that reduce the distance between production and customer (global power competition / decoupling from China is a reason for this).
Notes:
This will also impact manufacturing construction spending in Mexcio.
It will also increase investment in port facilities and infrastructure (road / rail) to connect factories to these.
Related:
Saudi Arabia
Neom ‘uses one fifth of world’s steel’
The Neom giga-project in Saudi Arabia is worth $500b.
The project’s demand in logistics is 5% of the global logistics market.
Algeria
Drought-Hit Algeria Has $5.4 Billion Plan to Make Drinking Water From Sea
Algeria plans to spend $5.4 billion on desalination facilities.
The nation is facing a decline in rainfall that’s periodically drying out reservoirs and contributing to wildfires.
Algeria is targeting 60% of its drinking water from desalination by the turn of the decade, compared with 42% currently.
Big Tech
One of largest U.S. solar projects opens in Texas, backed by Google
The project was backed by what Google said is the largest solar electricity purchase it has ever made.
Google expects to spend $16 billion through 2040 globally to purchase clean energy.
Investment funds & Accelerators
CRH Ventures Launches Sustainable Building Materials Accelerator
CRH Ventures is the venture capital unit of CRH, a New York building materials solutions business.
The accelerator will target Seed to Series B startups with market ready products.
It aims to identify materials and applications which lower emissions, reduce waste and improve energy use.
They will arrange one or more pilot programs for each shortlisted applicant.
News
Construction tech (2024) (Sifted Briefing)
This briefing has an overview of the construction tech market in Europe tracking 111 startups.
Construction accounts for 10.9% of European GDP.
Operational profitability is ~5% among Europe’s construction giants leaving little room for experimenting with new technology.
Q3 2024: Funding (Foundamental)
They analyze funding for core construction, renovation, planning & design, and directly-related supply chains.
In Q3 they tracked $800m in funding and note we are at $35b total cumulative funding.
Market share of AECS-Tech in Q3 as % of total VC is 0.8%.
There are 19 active unicorns (private / public / acquired). These are startups valued at over $1b.
Recent Research on Construction Productivity (
)The post reviews US research into construction productivity, with summaries and comments on four recent research papers as well as the most recent McKinsey report on improving construction productivity.
Meet Construction Startup Competition 2024 Winners (CEMEX Ventures)
Winners were announced across verticals:
Green Construction – Sustainable:
Enhanced Productivity – Efficient:
Construction Supply Chain – On Time:
Future of Construction – Disruptive:
Skilled trades gain traction with Gen Z: report
Social media is the second largest driver of Gen Z career paths and is driving an interest in skilled trades.
67% of Gen Z respondents say social media has increased their interest in skilled trades.
55% of Gen Z respondents are considering a career in skilled trades
Notes:
- who writes Construction Yeti is a big proponent of this change! His instagram account has grown to over 56k followers.
Bechtel teams up with major US construction firms to combat suicide
NASA’s new space odyssey: Tackling waste in space
NASA launched a LunaRecycle Challenge competition offering $3m to develop recycling and waste diversion systems for space.
It aims to reduce solid waste generated during space missions.
They expect the winning innovations could help address recycling challenges on Earth.
Notes:
Space presents unique environmental constraints, making traditional tasks like recycling and construction particularly challenging.
NASA states that innovations created for space applications could bring valuable advancements to terrestrial industries.
NASA is explicitly stating that innovations made for the Space domain could provide business value in terrestrial processes.
With funding available for space construction projects (e.g Lunar Railway Project), companies excelling in this domain can leverage innovations which are partially funded by NASA grants to improve their Earth-based construction efforts and gain a competitive edge.
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.
Thanks for the shoutout Bhragan! Lets keep working to drive interest into the Construction Industry for the next generation!