Although it’s not the sexiest of industries, the hefty construction sector in 2018 attracted not only the attention but, more importantly, the dollars of investors.
Historically, the multi-trillion-dollar sector has been slow to adopt new technologies, as builders rely on a variety of disparate systems to manage projects, traditional building methods to construct homes and non-smart materials.
But a wave of startups is looking to capitalize on opportunities within the sector. Companies that have developed software solutions aimed at streamlining processes and increasing efficiencies are increasingly common. Prefab construction has evolved thanks to innovation in that space, and 3D printing technology can create homes in a matter of days.
Investors are taking notice. Funding in U.S.-based construction technology startups surged by 324 percent, to nearly $3.1 billion in 2018 compared with $731 million in 2017, according to Crunchbase data. While the 2018 numbers are impressive, it’s important to note that a few large rounds did take place last year and thus skewed the results. One startup alone, Menlo Park-based Katerra, brought in $865 million from SoftBank Vision Fund, RiverPark Ventures and Four Score Capital in a Series D round last January. And, smart glass company View closed a $1.1 billion Series H in November. Also, Procore, a (unicorn) provider of cloud-based construction management applications, in December raised a $75 million Series H round from Tiger Global Management.
Without those two rounds, the construction tech sector saw just $1.135 billion in funding in 2018, up a more modest 55 percent over 2017’s totals.