Last Week in ConTech - 5 August 2024
Acquisition creates 2nd largest heavy contractor in the US + federal agencies deploying IRA dollars before the new presidential term
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:
13 Startup Fundings
8 Policy and Regulatory Changes
7 New National Infrastructure Projects & Priorities
0 New investment funds
4 Acquisitions
8 News articles
73 open jobs - view here
Reading time: 15 mins
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I have updated the company name link to be the company’s LinkedIn page rather than their website. The reason is that many people are using this to help them to reach out / check out companies.
Thanks Jeremy for the tip!
Startup Funding
Smart Buildings
nhance.ai, a Bengaluru startup, raised $1.5m in Seed funding. They develop digital twins for buildings empowering asset owners and managers with visibility on building performance and deriving actionable insights to direct decisions such maintenance and asset optimization. More here.
[View open jobs - 1 role in Sales, 1 role in Project Management, 2 roles in Software]
Inspection
OnSight Technology, a Californian startup, raised funding (undisclosed). They provide robotic inspection services for critical infrastructure designing the solution to provide detailed inspections for large remote sites like solar parks. More here.
Weather Data
Raad Labs, a New York startup, raised $2.25m in funding. They provide climate data measurement and forecasting by deploying a distributed network of sensors to monitor weather patterns, greenhouse gas emissions, wildfire risk, soil degradation, and more. More here.
Notes:
Raad Labs is leveraging a decentralized physical infrastructure network model to provide hyperlocal climate information.
There is an unmet need for high-quality weather, air quality, and soil data that businesses, utilities, insurers, and governments can use to prevent climate disasters cost-effectively.
This data serves as key design inputs for protecting infrastructure and designing climate adaptations.
Due to the lack of available and accurate data, we often design very conservatively to mitigate downside risks, leading to higher delivery costs and increased carbon footprint.
Access to better and more accurate local data is essential to reduce costs and meet climate targets.
Climate Risk
First Street, a New York startup, raised $21m in Series A-1 funding. They have developed a climate risk solution which informs of exposure to flooding, wildfires and other hazards helping governments and companies with planning, climate adaptation policy and financial allocation decisions. More here.
[View open jobs - 7 roles in Sales, 2 roles in Software, 6 roles in Other]
Building Decarbonization
AeroShield Materials, a Massachusetts startup, raised $5m in additional funding. They produce transparent silica aerogel inserts for windows which are super light and super insulating materials improving energy performance by up to 65%. More here.
[View open jobs - 1 role in HR, 1 role in Other]
Notes:
AeroShield Materials raised $14m at the start of July.
Heat gain and heat loss through windows is responsible for 25-30% of residential heating and cooling energy use.
The global architectural glass market is valued at ~USD 84.15 billion in 2022 and is expected to reach USD 127.37 billion by 2028 (architectural glass is glass that is used as a building material).
Solstice, a Massachusetts, raised funding (undisclosed). They are developing a community solar business which allows households to enroll in solar with the energy sent automatically to their utility providing a credit against their bill. More here.
Notes:
In the US, a new solar array is installed every 2 minutes.
Despite this, over 4 out of 5 Americans are excluded from rooftop solar installation due to factors such as eligibility restrictions, homeownership status, and limited access to financing.
This solution involves creating a shared solar garden which produces clean renewable energy on the residents behalf.
Site Development
Epum, a Dutch startup, raised $1.6m in Pre-seed funding. They are developing a commercial real estate development site selection solution. More here.
Notes:
Epum have developed the largest real time dataset of urban zoning and planning activity across the US.
Using this and their algorithms, they are able to provide a commercial real estate development site selection tool.
It evaluates local demand drivers, zoning, ownership profiles, competitive supply, topography, traffic data, demographics and more to identify and support acquisition opportunities.
Government
GovWell, a New York startup, $4.5m in Seed funding. They are developing a workflow system for small and medium sized governments which helps to automate and streamline tasks such as building permits and code to zoning to fire safety inspections. More here.
[View open jobs - 3 roles in Software, 1 role in Sales, 1 role in Support, 1 role in HR]
Notes:
GovWell is focusing on the local government sector.
This is noteworthy because, while the term ‘government’ is used broadly, each local municipality runs its processes slightly differently, making it challenging to scale a software solution. Process change in government is notoriously difficult.
To address this, the GovWell platform is designed as a single product that can be configured using no-code tools, allowing each government entity to customize it to their specific workflows.
It’s compared to Salesforce - it can be configured to suit different businesses, but the underlying workflows remain consistent.
This approach offers valuable insights for construction startups aiming to sell workflow automation solutions.
Just like local governments, each small to medium contractor operates with slightly different processes, complicating the scaling and adoption of solutions. Training and support costs for new operational models / processes can be high.
By embedding customization at the core of the product, the platform can be tailored to the user's needs while maintaining a consistent underlying functionality.
Data Centers
Cloverleaf Infrastructure, a US startup, raised $300m in funding. They develop powered, ready to build data center sites in the US aiming to deliver scalable clean electricity through investments in transmission, grid interconnection, land, onsite power generation, and electricity storage. More here.
[View open jobs - 1 role in Finance, 1 role in Operations, 2 roles in Other]
Notes:
The demand for AI has resulted in an increase in demand for AI data centers.
These data centers require a significant increase in electricity consumption with nations increasingly concerned as it impacts power availability and their climate targets.
For example, Dublin has rejected a number of new permits for data centers as they are to account for 32% of national electricity demand in 2026.
To account for this developers are integrating the development of clean energy with new data center campuses to meet approval requirements.
Related
Home Services
Thumbtack, a Californian startup, raised $75m in debt funding. They have developed a platform which helps and connects homeowners with over 300,000 local service businesses (including general and remodeling contractors) offering services such as emergency repairs, preventative maintenance, home management and even structural engineering. More here.
[View open jobs - 3 roles in Marketing, 2 roles in Operations, 1 role in Support, 1 role in Finance, 2 roles in Software, 1 role in HR, 1 role in Product, 1 role in Other]
Notes:
The home services industry is valued at $600b.
Reporting and Compliance
osapiens, a German startup, raised $120m in Series B funding. They provide an ESG platform and compliance and sustainability reporting solutions which streamline compliance with international ESG regulations. More here.
[View open jobs - 4 roles in Sales, 4 roles in Support, 3 roles in Software, 2 roles in Marketing, 4 roles in HR, 10 roles in Software]
Notes:
The platform helps companies identify and mitigate risks in their operations and supply chain using automation to reduce manual reporting.
They assist construction and infrastructure companies with reporting compliance with legislation such as Corporate Carbon Footprint (CCF) or Carbon Border Adjustment Mechanism (CBAM).
Operations
OpusFlow, a Dutch startup, raised €1.7m in funding. They are developing an Enterprise Resource Planning (ERP) system for sustainable installation companies focusing on technology such as solar panels, heat pumps, home-batteries and electric vehicle charging stations. More here.
[View open jobs - 2 roles in Software, 1 role in Other]
Robotics
Skild AI, a Pennsylvania startup, raised $300m in Series A funding. They are building a scalable foundation model for robotics which is grounded in the physical world supporting complex household and industrial tasks. More here.
Notes:
Existing robotic applications have been limited to isolated or constrained environments (e.g. factory floor) making them unsuitable for the uncontrolled nature of construction sites.
Skild’s general purpose AI model makes any robot agile, dexterous and safe to interact with people.
They are targeting the massive labor shortage in the US which is affecting industries such as healthcare, construction, warehousing and manufacturing.
An initial use case is the automation of visual inspection, data collection and patrolling of sites.
The rise of Open AI / Generative AI solutions has shown that we could be closer than expected to the deployment of general purpose robots which work alongside human labor in construction.
Policy and Regulatory Changes
New DOE Guidelines Help Define ‘Zero Emissions Building’
This article provides a good explanation on the definition for a Zero Emission Building released in June.
This definition marks the DOE’s first attempt at creating workable goals for building owners that wish to reduce carbon output.
The DOE has stated that the published guidelines are not regulatory standards. The definition does not constitute a rule that entities must follow, rather, these definitions are intended to articulate common goals for building owners and operators.
The definition is straightforward and requires three conditions; energy efficiency, zero on-site emissions from energy use, and powered solely by clean energy.
Notes:
The definition fits in with other local, state and federal efforts to decarbonize infrastructure e.g. NYC Local Law 97 which aims for net zero by 2050.
It remains to be seen how effective a definition will be for reducing emissions.
It does provide a standard which certification programs can adopt and it is important to note that litigation related to climate / carbon issues is rising.
E.P.A. Announces $4.3 Billion in Funding for 25 Climate Projects
The funding is directed to projects tackling climate change.
Example projects include enhancing the energy efficiency in homes and buildings and replacing residential oil-burning systems with heat pumps.
Notes:
As we approach the end of Biden’s term, federal agencies will be aiming to push out the remaining cash from the Inflation Reduction Act.
This could have an impact on the grants available for the construction sector and should be monitored.
US, Europe Court Southeast Asia as China Hedge
The US and Europe have been meeting with Southeast Asian countries in a bid to create more diverse and resilient supply chains.
The US wants to help the Philippines double its semiconductor facilities.
The EU relaunched talks on free trade agreements with Thailand with indications for resumption of negotiations with Malaysia and Philippines.
Notes:
Southeast Asia could emerge as a major economic winner (similar to Mexico) due to rising geopolitical tensions.
This could help industrialize the region and result in infrastructure, factory and warehousing construction.
EU takes legal action against Ireland over defective construction products
The European Commission has launched infringement proceedings against Ireland for not carrying out market surveillance on construction products.
EU rules require authorities to monitor the manufacturing and placing on the market of construction products before they are used.
The state is being held accountable for failure to comply with requirements leading to 1000s of properties becoming affected by defective concrete blocks.
There are calls for a fully independent inspection and enforcement regime for all building materials.
US cities sharpen focus on building performance standards to meet net-zero goals
Governments are turning to building performance standards as a key measure to cut emissions and meet targets.
13 cities have them in place with another 30 pledging to pass standards by 2026.
Washington prepares to roll out tax break for office-to-housing conversions
The Legislature approved a law this year to allow developers to defer sales and use taxes if they convert existing structures, like office buildings, into affordable housing.
NY’s MTA Outlines List of Improvements to Exceed $51.5 Billion
The transit agency needs to modernize the 100-year-old network.
It needs 2,000 new subway and commuter rail cars, 60 miles of new subway tracks and upgraded power stations.
This will be deployed in 245 airport-related infrastructure grants across 39 states.
The funding is from the Infrastructure Law Airport Infrastructure Grants (AIG) program which includes $25b for airport improvements.
National Infrastructure Projects & Priorities
US
California eyes central procurement of 2GW of LDES to help scale novel technologies
The California Public Utilities Commission (CPUC) has proposed the procurement of over 10GW of new energy resources.
The CPUC is aiming to help scale novel technologies with mature technologies such as pumped hydro energy storage not eligible.
Germany
EnBW to invest 1 bln euros as Germany's hydrogen grid takes shape
The infrastructure is planned to start commercial operations by 2032 to transport produced and imported hydrogen.
In Germany, land resources for wind and solar are limited.
This investment is part of the planned hydrogen network which is to extend over 9,700 km (6,000 miles) and cost around €20b with existing gas pipelines making up 60% of the network.
Related:
German government signs off on hydrogen import strategy
This includes how and where from Germany will import hydrogen, where transport and value chains are built in ports and pipeline systems, how trade is to be organized and certified.
China
Chinese pebble-bed reactor passes “meltdown” test
New testing at China’s Shidaowan nuclear power plant confirmed its ability to naturally cold down.
Instead of relying on water, it uses a small amount of helium gas which can withstand higher temperatures to cool it down making it ‘meltdown proof.’
This is an industry first milestone for achieving commercial scale safety (according to the researchers).
Notes:
Nuclear energy is increasingly being viewed as the backbone of a clean energy grid.
In the US funding and regulatory change has been focused on developing a home grown nuclear industry with other countries such as the UK following suit (see this issue for more).
One major impediment to adoption is the public’s fear and concern regarding the safety of nuclear plants
This new development could help alleviate that being a boon for the nuclear construction industry.
China has a complete and independent nuclear industry infrastructure.
They have 55 operational nuclear power units (3rd in the world) with 26 under construction.
In 2022 and 2023 they approved the construction of 10 plants each year.
China’s wind and solar energy additions eclipse coal in historic first
Wind and Solar energy has, as of June, collectively eclipsed coal in capacity.
Since 2020, annual installations of wind and solar energy have consistently exceeded 100 GW, three to four times the capacity additions for coal.
South Korea
KHNP selected to supply new Czech nuclear units
Korea Hydro & Nuclear Power has won the Czech government's contest for at least two new nuclear power units in the country, with its bid preferred to that from France's EDF.
South Korea is continuing to grow its nuclear capabilities and joined a coalition of countries which announced an $866m investment in fusion over the next 10 years to develop more infrastructure.
Pacific
Pacific Island nations owe 'astronomical' debts to China. Can they repay?
A number of infrastructure projects in the Pacific have been funded via debt from China.
Continued economic shocks and climate related natural disasters could make it difficult to repay the loans with Samoa and Vanuatu owing 2.6% and 2% of their GDP respectively in debt repayment.
Notes:
Infrastructure is critical for economic development and financing is a key part of it.
As the economic climate has shifted (post-COVID), debt repayment and spending is becoming an increasingly important conversation.
This could have an impact on future infrastructure financing and spending in the Pacific in the short to medium term.
Acquisitions
Hochtief, a German construction company, and ACS Group, a Spanish construction company will merge their North American operations to create Flatiron Dragados, which is to be the 2nd largest domestic heavy contractor in the US behind Kiewit and the 21st largest commercial contractor by revenue. More here.
Zeitview, a Californian startup providing automated inspection solutions for energy and infrastructure assets, acquired Clearsight, a provider of transmission, distribution and substation inspections with integrated AI and analytics. More here.
Invixium, a Canadian biometric access control and workforce management solution, has acquired Tirax Technologies, a US real time location and connection worker solution which improves productivity and equipment utilization for the construction industry. More here.
Safety Plus, a safety and compliance management software, has acquired GoContractor, a provider of contractor management software. More here.
News
Q2 & H1 2024 Industry Insights: Contech & Cleantech (Cemex Ventures)
The Wild World of Pricing Models (Bricks & Bytes)
US homeowners' insurers hit record low
US home insurers reported over $15b in underwriting losses in 2023.
This is the worst since 2000 and double the 2022 figure.
A reason is population growth in areas prone to natural disasters.
Notes:
Increasingly we are seeing insurers pull out of risky markets with homeowners unable to access coverage.
This will create an opportunity for startups which are providing insurance solutions.
I predict we will see a rise in parametric insurance options.
This works by allowing the insured party to receive a pay out if a predefined, measurable trigger parameter is met e.g rainfall is over 300mm this month.
As this becomes more commonplace, I believe parametric insurance products will enter the construction industry providing a way to reduce program / schedule risk (I detailed my thoughts here).
An example construction startup in this sector is EHAB
Completion times for major construction projects improve across Indian cities: Anarock
From 2014 to mid-2024 the average completion time for large under-construction projects in India's top seven cities dropped from 6.1 to 4.9 years.
This could be as large and publicly listed developers now represent 34% of the market with strict regulations on project delays.
Ireland’s datacentres overtake electricity use of all urban homes combined
The sector uses 21% of electricity consumed in the country and anticipated to grow to 31% in the next 3 years.
Ireland relied on fossil fuels for more than 50% of its electricity last year.
Wind power made up 34.6% of Ireland’s electricity, while solar contributed 1.2%.
Remote work: How manufacturers are experimenting in a hands-on industry
Due to a growing labor shortage, manufacturers are embracing remote work to provide flexibility for the workforce.
Digital twins and smart glasses which provide real-time factory insights and remote maintenance feeds are helping to bridge the communication gap between remote and in-person employees.
Underground construction start-up Hypertunnel falls into administration
They had developed a tunnel construction and repair method which used swarming robots to undertake targeted ground improvements and make structures directly in the ground.
Empty Offices Risk Wiping Out $250 Billion in Commercial Property Value
The US office vacancy rate is forecast to hit a peak of 24% by 2026 as WFH persists.
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.