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.

TRD 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
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
Occupancy Sensors Can Serve as the Brains of an Office’s COVID-19 Response

Occupancy Sensors Can Serve as the Brains of an Office’s COVID-19 Response

Occupancy Sensors Can Serve as the Brains of an Office’s COVID-19 Response
Post-Pandemic Economic Development

Post-Pandemic Economic Development

Post-Pandemic Economic Development
What Building Owners Need to Know About COVID-19 and Air Filtration

What Building Owners Need to Know About COVID-19 and Air Filtration

What Building Owners Need to Know About COVID-19 and Air Filtration
Stuart Miller

The pandemic has brought a silver lining for Lennar

The pandemic has brought a silver lining for Lennar
Buyers of Distressed Debt Inject Flexibility Into Pandemic-Stricken Real Estate Markets

Buyers of Distressed Debt Inject Flexibility Into Pandemic-Stricken Real Estate Markets

Buyers of Distressed Debt Inject Flexibility Into Pandemic-Stricken Real Estate Markets
No, Tokenizing Real Estate Won’t Make It Less Stable

No, Tokenizing Real Estate Won’t Make It Less Stable

No, Tokenizing Real Estate Won’t Make It Less Stable
arrow_forward_ios

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

Loading...