Construction-tech startup Social Construct calls it quits
“Startups are fragile beasts,” according to Ben Huh, CEO of Social Construct, which just became the latest real estate casualty of the pandemic.
The proptech startup, which launched in 2017 with the aim of streamlining building planning and assembly with software and automation, will officially wind down operations in the fourth quarter. The pandemic undercut the startup’s early successes and threw a ratchet in its plan for a Series B raise in April 2020.
“It was almost impossible to get investors to come for a hardhat tour while people were fleeing the city and rents crashed,” Huh told The Real Deal.
Huh, who previously was the founder and CEO of Cheezburger, does not currently have plans for another project.
“It was almost impossible to get investors to come for a hardhat tour while people were fleeing the city and rents crashed.”
Show me the money!
Proptech funding is going gangbusters.
Venture-backed proptech companies have raised $10.6 billion in 2021 through July 21 — more than any comparable period in any year in the last decade, according to Crunchbase News.
Proptech startups are on track to meet or beat 2018’s $18.5 billion capital raising total, the highest annual total on record.
Property management outfits, which facilitate the buying and selling of homes, as well as construction proptech startups have seen the most interest so far this year, with $2 billion and $1.9 billion raised, respectively.
The $635 million Procore Technology initial public offering in May 2021 was a milestone that showed venture capital investors that the real estate industry is willing to adopt new technology, Clelia Warburg Peters of Bain Capital Ventures told the publication.
“Construction tech is where proptech was probably three or four years ago, in that you have an increasing interest toward the three core constituencies [incumbents, investors and entrepreneurs] who have to come together in a flywheel to move forward,” Warburg Peters said.
Many have seen the viral videos of agile, frighteningly competent robots scaling a wall or tossing a basketball.
Those … things … will be running the building sites of tomorrow, and construction robotics will be the next big boom in proptech, according to MetaProp Co-founder and Partner Zach Aarons.
“It’s already happening,” Aarons told The Real Deal. “You’re seeing robotic bricklayers. You’re seeing robotic drywall layers. There’s robotic painting. That [revolution] hasn’t quite happened yet, but it’s going to be absolutely gigantic, eventually.”
A few of the startups at the vanguard of construction robotics include Canvas, a drywall-hanging outfit; PaintJet in commercial painting; and Dusty Robotics in structural layout.
STAT OF THE MONTH
Amount raised by venture-backed proptech companies in 2021 through July 21 — more than any comparable period in any year in the last decade.
Simplifying public funding
More than $100 billion of real estate incentives are doled out every year, much of it unused — in part because it’s difficult to understand and keep track of them all.
REDIST, a new proptech outfit founded by entrepreneurs Atif Qadir and Jonathan Kuo, will seek to solve that problem, beginning in September, the Commercial Observer reported.
Instead of having to dig through byzantine city, state and federal law for information, developers and investors can refer to REDIST, which will aggregate and clarify the incentives and streamline the process of receiving public funding.
Both Qadir and Kuo are self-professed real estate and finance people — not typical “tech bros” looking to nose their way into a different industry.
“We’re real estate guys — and our industry needs to get with the times,” Qadir told the publication. “We can’t continue to outsource innovation to someone outside.”
• Madison-headquartered Rentable, a multifamily rental and property management platform, raised $22.5 million in Series B funding led by Susquehanna Growth Equity — its fifth proptech investment in about as many years.
• Seattle-based NavigatorCRE, a data analytics startup, raised £12.5 million in a Series A funding round led by Fulcrum Equity Partners, with plans to expand in the U.K.
• U.K.-based essensys, a flexible workspace software provider, raised $46 million, with plans to double its U.S. headcount in the coming year. The company also plans to expand its Asia-Pacific operations after appointing Eric Schaffer as CEO to head up the region.
• PriceHubble, a Zurich-based residential property valuations platform, raised $34 million in a Series B funding round led by Digital+ Partners.
• Localize, an Israel-based startup that uses artificial intelligence to streamline the homebuying process, raised $25 million in a Series C funding round led by Pitango Growth.
• WeMaintain, a Paris and London-based elevator and escalator maintenance services startup, raised €30 million in Series B funding round, with aims to expand internationally.