Construction tech startups Alice, Join score new commitments
Fundraises highlight investors' interest in niche as proptech fundraising cools
Technology investors’ appetite for risk may be dwindling, but their interest in the construction tech niche seems to be on the rise.
Startups Alice Technologies and Join secured new funding to bolster their respective efforts to solve one of the industry’s enduring problems — efficient project planning.
Oakland-based Join secured $16 million in a Series A round led by SignalFire, with participation from Metaprop, Building Ventures, Ironspring Ventures and Standard Investments.
And Menlo Park-based Alice raised $30 million in a Series B round led by Vanedge Capital. New investors included JLL Spark, Bouygues, Gaingels, GRID Capital and MetaPlanet.
The fundraises come at a harried time in tech, as rising inflation and interest rates pressure private company valuations and capital markets conditions while also stimulating demand for additional financial resources to weather a likely recession.
Neither startup disclosed valuation figures, which have reportedly come down substantially as tech startups’ cost of capital has gone up.
The deals are notable also for the players involved. Each was led by a generalist venture investor with limited exposure to the construction-tech niche.
Venture capitalists in recent interviews identified construction tech as one of the most promising and resilient segments of real estate technology. Investment in the field more than doubled year over year in 2021, surpassing $2 billion, according to Crunchbase.
Brick & Mortar Ventures partner Curtis Rodgers said as of mid-June, investors were still taking meetings with startups in construction tech “because they know how big it is now.”
“People are getting smarter about how much potential there is in construction, how important and active it is,” he said.
One of a kind
Alice, founded in 2015, claims its so-called “optioneering platform” is the first of its kind in construction tech.
It is part Watson, part Willy Wonka. The contractor client feeds blueprints to Alice, which then uses AI to run the plan through millions of execution scenarios factoring in variables like labor, equipment, materials and methods, and presents ideal options for completing it: the cheapest, the fastest, the least risky. If the project takes an unexpected turn or circumstances change, Alice updates the protocol.
Alice claims its technology saves the average project 17 percent on time and 13 percent on labor and equipment costs. It can be deployed for commercial builds as well as infrastructure like bridges and tunnels.
“We are the only company in the world who has cracked this problem technically,” founder and CEO René Morkos told The Real Deal.
Alice charges its customers, which include Skanska, Kajima and other major general contractors, by the project. Morkos said the company grew revenue more than three-fold last year, and he expects it to do the same in 2022, while using the new funds to make new hires and grow globally.
Alice raised some $18 million in a two-part Series A round in 2019.
Launched in 2017, Join similarly set out to replace Excel with a more sophisticated and responsive construction planning and decision-making tool.
Join essentially wants to bridge the communication gap between owners, architects and contractors during the pre-construction phase, when risk assessments take place. Historically, designers would work out all the details of a build before getting any feedback on costs —- a blind spot that leads to cost overruns and delays.
The Join dashboard, which has been tested on a range of projects including, research and health facilities and sports complexes, gives the various stakeholders data visibility as a plan is coming together, so potential issues may be addressed upfront. It includes budget planning and visualization tools.
Join, which has 52 employees, will use the new funds to increase its headcount by some 50% by next year, CEO Andrew Zukoski told TechCrunch.
The startup has raised some $30 million in equity funding to date.