According to a new report published by commercial real estate giant JLL, VCs invested $1.05 billion in global construction technology startups in the first half of 2018, a record high. 2018’s investment volume is already up nearly 30 percent over the 2017 total. These startups are helping to deliver projects more quickly, to reduce the amount of resources being consumed, to make worksites safer, to increase coordination among stakeholders in the projects, and to provide new data sources for project leaders.
Here are some of the trends driving the boom in funding for construction tech startups:
- Over the last 25 years, as other industries have doubled their productivity rate, construction has actually declined in productivity.
- Materials costs are rising, prompting a need for more efficient use of materials on construction sites. Materials costs grew by 5.6 percent over the last 12 months.
- Access to skilled labor is a huge issue. A lack of skilled workers has added time, costs, and other hurdles to construction projects.
- Construction spending is up, causing an increased rivalry for resources among contractors.
These are the contech startups that have raised the most venture capital funding:
- Katerra ($1.1 billion at a $3 billion valuation)
- Zhaogang ($361 million at a $1 billion valuation)
- Uptake ($287 million at a $2.3 billion valuation)
- Procore ($180 million at a $1 billion valuation)
- Blu Homes ($180 million at a $527 million valuation)