2015 sees the Construction Tech space witnessing a massive ~320% increase in funding
According to our latest Tracxn Report on Construction Tech, the sector has seen a total of over $718M being invested in the space over the last 10 years. The sector has garnered interest from investors such as 500 Startups, Borealis Ventures, Brick & Mortar Ventures and Y-Combinator. Besides funding activity, the sector has also seen a good amount of exits since 2010, seeing 44 acquisitions. 2014 saw the maximum number of M&As with 12 acquisitions, while 2015 saw 8. Notable acquisitions during 2015 include Solibri’s acquisition by Nemetschek, and DMY’s acquisition of Fast Brick Robotics.
In terms of funding activity, 2015 proved to be a stellar year for the space, with the year seeing a massive ~320% increase in funding, with a total $382M invested in several companies through multiple follow-up rounds. Besides seeing a substantial increase in the funding volume, 2015 also witnessed an increase in the average ticket size.
Notable rounds in the year include Procore’s $80M late stage raise through 2 rounds from Iconiq Capital and Bessemer Venture Partners, and Greentown’s Series A raise of $60M from Sequoia Capital. PlanGrid also raised $40M from Tenaya Capital, Sequoia Capital, Founders Fund, Y Combinator and North Gate.
Besides an increase in funding, the number of companies entering the space has also been witnessing an upward trend since 2010, triggered by the penetration of mobile devices and the adoption of IT to manage construction projects. 2015 saw a peak in this regard as well, with 44 companies being founded during the year. The bullish sentiment of companies entering the market can be attributed to the high volume consolidation which taken place in the segment, providing entrepreneurs and investors alike with positive exit options.
Moreover, the Marketplaces segment within the Construction Tech sector has proved to be an immensely popular arena for new companies, contributing to the highest number of companies founded in 2015.
Business Models in Construction Tech
Marketplaces, which consists of companies providing platforms to buy construction materials, buy/rent heavy equipment and hire professionals, is a fast growing segment seeing a total funding of ~$199M since 2013, through 24 investments. The segment has so far seen an overall funding of ~$257M
Construction Project Management is the sectors most mature and well-funded segment seeing a total investments of $473M. This business model covers companies that provide tools to owners, AEC professionals and project managers to manage construction project life-cycle. Includes tools and software for Pre-construction Management, Field Management, and Finance & Accounting. Pre-construction management includes bidding, estimation and take-off tools. The segment contributed $91M to the overall sectors total funding in 2015.
Government’s mandate on usage of BIM for all public projects in nations like The United States, Singapore, United Kingdom, Norway, Denmark, Finland, Chile, Hong Kong, South Korea, Netherlands and Dubai has forced AEC industry to adopt BIM, which has led to the increase in popularity of startups in the Design Tools segment. Design Tools comprises of companies that provide tools to architects, MEP and structural engineers for designing any structure on computer before being constructed. Includes solutions that help in generating 2D, 3D and BIM object models along with structural and energy analysis tools. The segment has seen an overall funding of $133M, and witnessed its highest funding during 2015, at $30M.
The Tracxn Construction Tech Report covers companies that help owners, architects, engineers, contractors and subcontractors to design, bid and build any construction structure. Includes sources for procuring heavy equipment, construction materials and professionals, and providers of new building technologies such as 3D printing, Robotics and Modular Construction.
It excludes home improvements or renovations solutions and real estate solutions.
Checkout the Construction Tech Report here.
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