A wave of venture capital is pouring into construction tech sector

Investment in the sector shot up 1632 percent between 2016 and 2018 Venture investors are betting big on construction technology companies, particularly those that focus on automation.

National /
Jul.July 03, 2019 01:00 PM
An office built in a shipping container

An office built in a shipping container

Investment in the sector totaled $6.1 billion last year, nearly double what was invested in 2017 and a 1,632 percent increase from the $352.1 million invested in 2016, according to the Wall Street Journal.

So far this year, around $4.3 billion has been invested in construction tech, putting 2019 on pace to break last year’s record.

Goldman Sachs is a leader in the trend and invested into at least five firms this year, including a $95 million investment into the British modular housing firm TopHat. It also led a $34 million round of fundraising for Built Technologies, which sells a platform for lenders to track construction loans.

Some see modular construction technologies and other labor-saving advances as good bets because of the nation’s shortage in skilled construction labor. A 2017 survey found one-third of contractors nationwide have turned down work because they don’t have the labor.

Modular construction — in which parts of a building are built off site for on-site assembly — is seeing endorsements by builders too. The Chun family recently secured funding to build a modular AC by Marriot hotel in Manhattan. It’s billed as the tallest modular hotel in the world.

Investors are also attracted by big payouts secured by other investors when companies they bet on were bought out. Michael Berolzheimer, founder of investment firm Bee Partners, told the Journal that he netted seven times his investment when software maker Autodesk acquired a company he invested in. [WSJ] – Dennis Lynch 


Related Articles

arrow_forward_ios
Goldman Sachs CEO David Solomon (Getty)
Goldman Sachs plans move to South Florida
Goldman Sachs plans move to South Florida
Wells Fargo, JPMorgan Chase and Citigroup each recorded a rise in second quarter profits in their consumer divisions (Credit: iStock)
Banks see uptick in mortgages, but remain wary ahead of potential Fed interest rate cut
Banks see uptick in mortgages, but remain wary ahead of potential Fed interest rate cut
Uber founder Travis Kalanick (Credit: Getty Images and iStock)
Investors bet on restaurants’ move to
delivery-only
Investors bet on restaurants’ move to
delivery-only
HFZ, partners put historic Detroit building on the market
HFZ, partners put historic Detroit building on the market
HFZ, partners put historic Detroit building on the market
Starwood Property Trust CEO Barry Sternlicht (Getty, iStock)
Washington is “putting kerosene on an open fire” with spending bills: Sternlicht
Washington is “putting kerosene on an open fire” with spending bills: Sternlicht
President Joe Biden and NAR president Charlie Oppler (Getty, NAR)
Biden’s new eviction moratorium immediately challenged in court
Biden’s new eviction moratorium immediately challenged in court
These hotel markets have entered a depression
These hotel markets have entered a depression
These hotel markets have entered a depression
A history of real estate fraud in 8 scandals
A history of real estate fraud in 8 scandals
A history of real estate fraud in 8 scandals
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...