Last Week in ConTech - 9 September 2024
Germany expediting energy permitting + The AEC-Tech Internet Index
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:
11 Startup Fundings
10 Policy and Regulatory Changes
2 US election policy update
8 New National Infrastructure Projects & Priorities
0 New investment fund
1 Acquisition
6 News articles
22 open jobs - view here
Reading time: 15 mins
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Startup Funding
Subcontractor Management
Trestle, a New York startup, raised $2.3m in Pre-Seed funding. They are developing an automated prequalification and vendor management platform for contractors working on heavy construction projects which collects and connects key subcontractor and supplier information to help contractors select the right partners, mitigate risk and share feedback about third party performance. More here.
Acoustic Design
Treble Technologies, an Icelandic startup, raised $12.2m in Series A funding. They develop sound simulation and spatial audio technology for digital twins and virtual worlds which are used by architects and engineers to design and optimize building acoustics. More here.
Green Materials
Betolar, a Finnish company, raised €2.4m in funding (Post-IPO Equity, market cap €24.8m). They develop carbon neutral construction materials including Geoprime which is a sidestream based low carbon construction material innovation and a sustainable alternative to cement. More here.
Notes:
The difficulty with sustainable material innovation is adoption on site.
A reason is that the use of new materials on site brings risk as we don’t know how it will perform outside of the lab conditions.
This adds a delay to the adoption of green materials as the trial and scaling process can take years.
To overcome this green material startups often identify low risk use cases (e.g non-structural) where their material can be used allowing them to scale production, earn revenue and gain meaningful data points.
Reviewing Betolar’s 4 main use cases is valuable as it provides insights on market segments green cement startups can target to scale. Their uses cases are:
Stabilization - products for stabilization and construction
Ready-mix - surface casting and structural masses for various applications
Precast - construction elements, landscaping products and column bases.
Mining- solutions for by-product utilization and substituting cement
Note - I am finalizing a playbook for scaling Green Materials Startups: From Lab to Site.
If you’re curious to learn about it, please reach out.
The aim of this playbook is to provide actionable steps and lessons learned to scale from research lab to de-facto use on site.
Safety
Navatech, a UAE startup, raised $750k in the first close of seed funding. They are developing a suite of AI driven products focused on Health & Safety and Worker Welfare in construction using intuitive, conversational interfaces (similar to a messaging app) to capture data, streamline processes and provide up to date information. More here.
Workflow Automation
Reonic, a German startup, raised €13m in Series A funding. They are developing an end to end planning and workflow software solution for small and independent installers of green tech solutions such as heat pumps and solar panels. More here.
[View open jobs - 2 roles in Software, 1 role in Design, 1 role in Sales, 1 role in Support]
Notes:
Most solutions focus on one vertical (e.g only solar panel installation) whereas Reonic’s software covers a number of green tech verticals.
Smart Home
Daisy, a Californian startup, raised $7m in Series B funding. They design and install smart home and office technology systems allowing homeowners and office owners to build smart living spaces. More here.
[View open jobs - 2 roles in Sales, 1 role in Finance, 1 role in Project Management, 1 role in Software, 5 roles in Other]
Notes:
Daisy offers design and installation services for smart home spaces in the following verticals: lighting & shades, security solutions, audio-video entertainment, Wi-Fi & networking, and overall smart home systems.
Their go-to-market model for growing their services is quite interesting.
First, Daisy has developed relationships with ‘trade partners,’ such as designers and architects, to whom they provide smart home technology advice for their projects.
Second, they have an in-house team of technicians who install the products designed by their trade partners.
By working closely with designers and architects, Daisy establishes itself as the preferred installer. Providing quality service ensures a consistent flow of work.
Third, they offer a subscription support service that provides ongoing care for the smart home setups they install.
While this go-to-market approach may be slow to yield results (as providing technology advice to trade partners doesn't guarantee installation work), it compounds over time through the growth of recurring subscription income.
This recurring revenue enables Daisy to reinvest in business development (step 1) creating a flywheel for growth.
Water
Ainwater, a Chilean startup, raised $537k in pre-seed funding. They are developing a platform which provides real time optimization and monitoring for wastewater treatment plants. More here.
Environment
Envirosuite, an Australian startup, raised $10m from Hitachi Construction Machinery. They have developed environment intelligence technology such as air quality, noise, dust, vibration and water quality monitoring for the aviation, waste, wastewater, water treatment, mining and industrial industries. More here.
Notes:
Envirosuite plans to work with Hitachi and its portfolio of mining equipment, fleet management, autonomous haulage and other digital solutions to provide comprehensive solutions for tracking and managing carbon emissions across mine sites.
This technology could be used to track carbon emissions across construction equipment fleets.
Material Management
Ventory, a Belgian startup, raised €1.75m in funding. They are developing a field inventory management software which provides field services companies with visibility over their inventory including forward stock locations and engineers vans. More here.
[View open jobs - 1 roles in Software, 1 role in Sales]
Notes:
While not specifically designed for the construction industry, they do sell to the energy & infrastructure sector helping them to manage spare parts across locations, check compatibility and implement reverse logistics.
Reverse logistics is when a product is returned from the point of sale to the manufacturer / distributor for repair, recovery or disposal.
A forward stocking location is a smaller warehouse used to hold stock, closer to the end customer which needs it.
On large infrastructure projects such as airfields, they often stockpile materials and products in various locations throughout the site for common maintenance or project works (similar to a forward stocking location).
Having software which allows you to know what you have and where is valuable in construction.
Infrastructure Monitoring
Involve Space, an Italian startup, raised €2.5m in Seed funding. They develop stratospheric balloon technology which is used for real time Earth monitoring including infrastructure and traffic monitoring. More here.
[View open jobs - 4 roles in Other]
Notes:
Stratospheric balloons operate in the medium between drones and satellites.
Satellites can cover huge swaths of land but are expensive to develop, launch and operate.
Drones can take super sharp images however they only cover a small area often requiring careful human piloting.
Balloons in the stratosphere (20km above the Earth) are high enough to avoid aircraft yet low enough to observe broad areas in detail.
They are cheaper than satellites, last for weeks (even months) and Involve’s balloons are reusable.
These can be used for construction progress monitoring of remote sites and over cities for real time traffic monitoring and updates.
Geothermal
Baseload Capital, a Swedish startup, raised €53m in Series B funding. They invest in, develop, operate and scale geothermal energy projects worldwide. More here.
[View open jobs - 1 role in Finance]
Notes:
Baseload Capital’s company structure represents a novel approach to scaling innovative infrastructure.
The parent company, Baseload Capital, is a global investor in geothermal projects, offering financing and conducting market research to identify new opportunities. They also secure land and power purchase agreements.
They operate four geographically distinct subsidiaries (Baseload Power US, Taiwan, Iceland, Japan), each responsible for:
Project sourcing to evaluate plant locations and geological conditions.
Qualification processes to determine site viability before signing land lease and offtake agreements.
Managing project development, including permitting and site preparation.
Baseload Capital believes that building a portfolio of power companies, rather than just geothermal projects, allows them to achieve economies of scale and spread risk.
Additionally, this structure enables the creation of a global supply chain, improving efficiency through shared lessons and best practices.
It will be interesting to see if this approach to scaling an energy infrastructure class can be applied to adjacent sectors, such as nuclear.
Policy and Regulatory Changes
Berkeley’s gas ban was blocked in court. Now a new plan has emerged.
5 years ago the city of Berkely, California introduced a first in the nation natural gas ban.
This ban was squashed in the courts.
In response and to continue to meet their climate targets, they are intending on taxing large buildings which use natural gas.
A new ballot measure will be voted on which proposes taxing the owners of buildings of 15,000 square feet or larger based on the amount of natural gas consumed each year.
Notes:
If this passes it would be the first tax in the country to target the use of a specific fuel source for buildings.
When Berkley instituted the gas ban, it inspired similar laws in dozens of California cities and kicked off a surge of building electrification policies in more than 100 local governments nationwide.
This slowed down due to the court’s decision and if this ballot measure passes, it could serve as a model for other municipalities which have been copying their policies.
The Secret Behind Germany’s Record Renewables Buildout
Germany has sped up permitting for renewable installations.
The reason is that they are aiming to quickly reduce reliance on Russian gas.
Permitting has been an issue in Europe with the time it takes to get permits doubling since 2017.
In Germany, securing approvals for one 2022 project to erect three wind turbines required 36,000 pages of documentation printed out and handed to the authorities.
In just over two years, Germany is now deploying more renewables than any other European peer.
This is due to laws such as one designating clean-energy projects an ‘overriding public interest’ that serves national security and another requiring German states to allocate about 2% of their land for wind turbines.
Biden administration finalizes solar lands plan, touts permitting progress
The administration has finalized a plan to expand solar energy on federal lands in 11 western states as part of a broader push to speed the permitting and construction of big infrastructure projects.
The U.S. Bureau of Land Management's plan identified 31 million acres (12.5 million hectares) best suited for solar development.
The lands identified have high solar potential and low conflicts with wildlife and plant habitats, giving projects proposed in these locations a jumpstart on permitting.
Massachusetts cities are quickly embracing new emission-slashing building code option
1.5 years ago Massachusetts introduced an optional new building code aimed at lowering fossil fuel use.
Since then, 45 municipalities representing about 30% of the state’s population have voted to adopt its guidelines.
The code is already active in 33 of these communities and scheduled to take effect over the next year in another 12.
Low-carbon materials a ‘huge opportunity’ to green the transportation sector
The Federal Highway Administration announced $800 million via the Low Carbon Transportation Materials Program for agencies that carry out transportation activities to reimburse road builders for using products that create less pollution.
Examples are building products which use lower embodied carbon such as pavement using recycled plastics.
OSHA sets late December comment deadline for extreme heat standard
The rule would require employers to develop a heat injury and illness prevention plan as well as provide water, rest breaks and control of indoor heat when necessary.
Other requirements include developing plans for workers unaccustomed to working in high heat.
The rule would apply to all employers conducting outdoor and indoor work in construction.
Karnataka launches online building plan approval process in BBMP limits (India)
Karnataka announced the launch of the revolutionary online building plan approval process for construction of buildings in sites up to 4000 square feet in city civic body Bruhat Bengaluru Mahanagara Palike (BBMP) limits.
The scheme allows owners to get a provisional building plan with an approval by an authorized architect or engineer and then upload the same online for a final approval by the BBMP.
This will be applicable for constructions on all sites up to 50x80 feet area.
Building Act Brings New Climate Requirements For Construction (Finland)
This breaks down Finland’s new Building Act set to enter into force on 1 January 2025.
Some notes include:
Some new buildings will require a climate report which provides information on the carbon footprint of the building (total amount of greenhouse gasses emitted during the lifecycle of the building) and the carbon handprint (factors outside the lifecycle that affect the net climate benefits and that would not occur without the project).
Also a Carbon footprint threshold is to be taken into account in many new building projects.
TVA Boosts Nuclear Funding with $150M for SMR Development at Clinch River (US)
The Tennessee Valley Authority (TVA’s) has approved an additional $150 million for the public power utility’s $200 million New Nuclear Program.
This will boost continued design work and development of potential small modular reactors (SMRs) supporting the comprehensive planning, design, and regulatory processes necessary for the deployment of SMRs through fiscal year 2026.
30 neighborhood decarbonization pilots allowed under bill passed in California
This allows natural gas utilities to pilot neighborhood-scale decarbonization of buildings instead of replacing old gas pipelines if decarbonization projects are less expensive.
US election policy update
US election complicates investors’ hunt for infrastructure deals
Investors are willing to place money into funds that finance infrastructure projects from wind farms to data centers.
However there is a cool down in infrastructure deal activity blamed on uncertainty over the outlook for green energy subsidies and tariffs due to the election.
Donald Trump has stated his intention to dismantle parts of the Biden administration’s Inflation Reduction Act, which provides incentives for domestic industry and clean technology.
There are at least 110 energy transition specialist private funds in the market now trying to raise some $170bn.
Notes:
Data shows that actual infrastructure deal flow this year has not risen to match the inflows.
The total value of deals remains below 2021 and 2022.
Fundraising by asset managers focused on infrastructure has risen due to the global energy transition away from fossil fuels is driving investor interest.
It is becoming the fastest growing sub sector in infrastructure.
This article walks through how different election results will impact the Inflation Reduction Act (IRA).
This act provides incentives for domestic industry and clean technology and resulted in an increase in manufacturing / plant construction spending.
Notes:
This is valuable as Donald Trump has indicated that repealing the IRA is a priority.
National Infrastructure Projects & Priorities
US
Solar and Batteries Fuel 80% of New US Electricity Capacity in 2024
Between January and June, 60% of new electrical capacity added was solar.
During the same period, batteries provided the United States with 21% of its new capacity.
The reason is that battery installations are built near solar projects.
Wind made 12% of new capacity.
Interior approves US Wind’s 2-GW Maryland offshore wind project
This is the tenth commercial-scale offshore wind project to receive approval from the Biden administration.
The administration has now permitted 15 GW of offshore wind, bringing the U.S. closer to its goal of deploying 30 gigawatts of offshore wind by 2030.
China
Why China Is Starting a New Trade War
Beijing’s solution to a weak Chinese economy of increasing manufacturing production.
Loans to industry, including manufacturing firms, have increased 63% since the end of 2021, while Chinese banks have pulled back sharply on lending to real-estate developers.
A reason is that China must build an all-encompassing industrial supply chain that can keep the domestic economy running in the event of severe sanctions by the U.S. and other Western countries.
China spends about 4.9% of its gross domestic product on nurturing industries, several times higher than the U.S., Germany and Japan.
Notes:
This is important to understand as it has impacts on the global manufacturing construction sector.
A commentator has stated that ‘By doubling down on manufacturing when it already produces close to a third of global factory output, China is effectively asking the rest of the world not to expand its share of production, but to reduce it.’
Examples of this include CubicPV which was building a $1.4b silicon wafer plant in Texas halting production and Chilean iron ore miner and steelmaker CAP shutting its steel mill both as a result of Chinese overcapacity.
India
India's New Infrastructure Lender Plans to Disburse $17 Billion
India’s National Bank for Financing Infrastructure and Development (NaBFID) is planning to disburse $17 billion in local currency loans this year and next to finance various long term projects.
The 20-month old financial institution, which was created to focus on infrastructure funding, has assessed 200 projects and is planning to sanction $26.5 billion in loans over two years.
Prime Minister Narendra Modi’s mission is to build everything from airports and power facilities to roads, bridges and tunnels will spur India’s infrastructure investment to 15 trillion rupees ($179.2 billion) by March 2026.
Indian Railways Boosts Construction Pace to 14.5 km per Day
Over the last decade, India has increased its construction pace from 4 kilometers to 14.5 kilometers.
South Korea
South Korea’s bold $863.7 Million Fusion Investment to Ensure Energy Leadership
The investment is towards the development of nuclear fusion through commitment to a decade long program.
The initiative focuses on establishing a public-private partnership (PPP) model and a fusion ecosystem led by the private sector.
Related:
Saudi Arabia
Saudi Arabia Plans $25 Billion Metro Megaproject
This is to be the largest metro project in the world to be built in a single phase.
It will include six metro lines and 84 stations. It will be capable of transporting 1.7 million passengers a day in its initial operation phase.
It involves 176 kilometers (109 miles) of train lines with 190 train sets as well as 2,860 bus stops spanning 80 bus routes.
Canada
Canada to slap 100% import tariffs on Chinese electric vehicles over ‘unfair’ competition
Canada said it would impose 100% import tariffs on China-made electric vehicles, as well as a 25% tariff on steel and aluminum imports from China matching a recent move by the US.
Notes:
Following on the above point on Chinese overcapacity, similar tariffs could be deployed throughout Western countries to build domestic supply chains and ensure competitiveness.
This will have an impact on the manufacturing construction sector.
Investment fund
Set Ventures, a Dutch venture capital firm closed a €200m fund. They are focused on energy transition which includes building management, smart traffic and urban infrastructure. More here.
News
The AEC-Tech Internet Index (Foundamental)
This is the largest web traffic and trends analysis for ventures in AEC tech containing 100s of the most-funded AEC-Tech startups and scale-ups.
It contains 4 sections being: Risers of the Month, Category Trends, Venture Trends, Mindshare Winners (web traffic for startups grouped by category).
Construction Data JULY Briefs 9-5-24
Construction spending 2024 through July is still on track to finish the year up 7.7%. Residential is forecast up 8.5%, Nonresidential Buildings up 6.0% and Non-building up 8.9%.
The energy transition: Where are we, really? (McKinsey)
At-scale deployment of all decarbonization technologies is still not happening as fast as needed to reach 2030 targets.
Why Amtrak’s System Keeps Breaking Down: It’s 100 Years Old
Amtrak is the national passenger railroad company of the United States.
Long stretches of the system (Northeast corridor) are unchanged from when the defunct Pennsylvania Railroad first electrified it a century ago.
Any wholesale modernization effort would come at tremendous cost and take more than a decade.
The agency said it would need an additional $100 billion over the next 13 years to complete all of its planned repairs and improvements to the Northeast Corridor.
Rewiring the way McKinsey works with Lilli, our generative AI platform
This is a case study on how Gen AI actually could be used in companies.
Digital Curb Data Deepens Understanding of Urban Activity (US)
Cities around the nation are taking on projects to gather and analyze vast amounts of digital data points related to curb usage.
This can enable new forms of delivery and dynamic parking prices.
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.