Construction technology startup companies received $1.05bn in investment from venture capitalists (VCs) in the first half of 2018, a record high according to a new report by JLL.
The State of Construction Technology study highlighted the need for this trend to continue, stating that construction is one of very few industries where productivity has actually declined over the past 25 years.
This productivity gap, labour shortage issues and cost fluctuations present huge opportunities for VCs to invest in companies proposing solutions to these problems.
Since 2009, $4.34bn has been invested in ConTech firms in 478 separate deals.
JLL identified several niche areas where these startups specialise, including collaborative technology, offsite construction and AI/big data.
Offsite residential and commercial construction company Katerra has received the most funding to date, with $1.1bn being invested so far, giving it a market value of $3bn.
Commenting on the investing firms, the report stated: “The pool of investors and VCs in the construction technology field remains diverse. Both general tech and real estate specific investors are buying into the sector, but notorious startup accelerator Y Combinator has been the most active to date.
“While construction venture capital activity has quickly picked up in recent quarters, corporate investors remain notably absent from the active pool of investors. Surprisingly, Google Ventures and Caterpillar are the only corporate entities to make multiple bets in Construction Technology since 2012.”
In terms of the number of deals struck, the 119 project for 2018 represents a huge increase on the three completed in 2009.