Your project manager has counted every door in each PDF blueprint manually over the last three days because 40 workers are waiting on a job site due to a delay in delivery. That is representative of the same operational drag that is eliminating profit margins on modern jobsites.
The systems and vendors detailed in this guide on construction tech startups will mitigate the real world bottlenecks caused by this operational drag.
The Real State Of Construction Tech Startups (TL;DR)
We're entering an era of implementation as opposed to hype. The new narrative in the construction industry has gone from the "promise" of digital transformation, to "how much will we make or lose" through real return on investment.
Today's technologies will no longer attract buyers with vague ideas or hope of tomorrow. If a company can not show precisely how much time it saves on bid preparation, eliminates repetitive work, or reduces the overall duration of receiving a payment then buyers will not pursue it.
Investors understand the current scenario and see investments are shifting to investments with an emphasis on solving very specific painful workflow problems as opposed to the lifestyle benefits of artificial intelligence, automation, or self-driving tractors.
The pre-construction phase has become a major target, as errors made in the pre-construction phase can add massive downstream costs before the shovel ever touches the ground. As the hardware becomes more intelligent, robotic systems and autonomous equipment have begun receiving some very large investment rounds as they transition from novelty prototypes to the ability to perform subcontracted services effectively.
The Greatest Need In The Market
The largest untapped market opportunity right now? Specialty contractors. Specialty contractors constitute the greatest portion of the construction workforce but continue to be greatly underserved by enterprise management systems.
Specialty contractors need systems that are simple to deploy, intuitive to use, and can provide immediate field value, i.e., tangible performance improvement. The vendors who emerge as successful players in this area will not be the vendors with the most sophisticated algorithms. The top construction technology companies will provide advanced integration capabilities, creating an ecosystem with the financial and project-related systems contractors already use.
How To Evaluate The Market
To fully evaluate the construction tech startup market, you must use more than just the number of fundraising rounds (no matter how big your Series A check is, it only reflects investor excitement, not necessarily commercial viability).
To accurately assess which startups will create markets and which are just more noise, you must consider the specific problems each startup is addressing/solving, customer base, and supporting evidence for the claim(s) being made.
22 Construction Tech Startups Changing The Industry
These companies listed below are working in very creative ways to change the way we build!
1. PermitFlow
Contractors experience a wide array of local, state and federal permit requirements, all of which are time-consuming and disorganized. PermitFlow addresses the world of permitting.
PermitFlow collects all of the information relating to contractors needing to submit permits by working directly with contractors to collect all information, including the rules of each municipality using artificial intelligence and leveraging a national database of 12M permitting records to assist contractors with producing and submitting documents.
Market Focus: We provide assistance to contractors based in the United States struggling with excessive local paperwork, lengthy delays and the challenges associated with meeting local permit requirements.
Traction: Construction Dive reported PermitFlow's recent round of Series B funding in the amount of $54M, illustrating their ability to generate strong financial support and building significant infrastructure through a national permitting database.
The Reality Check: The only issue with PermitFlow is the lack of available independent supporting data to verify their specific time-savings per permit. Pricing is likely customized for larger companies, based on use.
2. Beam AI / Attentive.AI
Estimators are constantly bogged down by lengthy manual takeoff processes that can consume an entire day of estimating time for each building project. Attentive.AI provides automated takeoff and quantity extraction through its new product, Beam.ai, providing both speed and accuracy to the estimating process.
Beam.ai provides clients with an end product with human quality assurance running their automated output before being submitted to the contractor for use.
Market Focus: Estimators and contractors who spend large amounts of their time in site plans.
Traction: Beam.ai's Series B round of funding was $30.5M. The company claims it has served over 1,100 contractors.
The Reality Check: The number of 1,100 is a number published by the company. Buyers should compare the results of this tool to their own measure base to verify accuracy prior to being committed.
3. Unlimited Industries
Design changes are costly. This platform allows the user to generate many design changes at the same time, thereby allowing designers to create designs that are optimised for the least amount of expenditure and the greatest possible safety before construction begins.
Target Market: The development and construction teams with repeatable designs.
Traction: $12 million in seed funding secured.
The Reality Check: Public reports give volume of what the system is supposed to do, however, verified, completed project cost savings have not yet been published.
4. ConCntric
Preconstruction data is often stored in separate folders, with multiple spreadsheets and email conversations going on everywhere. ConCntric provides all stakeholders a single shared space and uses the AI tool called Amplify to manage the data movement.
Target Market: Preconstruction teams that are struggling to put together estimates and plans in a consistent manner.
Traction: $10 million in Series A funding raised.
The Reality Check: The ability to move data in real time is extremely beneficial, but buyers must require proof of how much time this system will save the planning process. Additionally, there is no public information about pricing options.
5. Kojo
For many contractors, materials management has become a black hole. Kojo's goal is to fix this by linking procurement workflows to distribution data.
Target Market: Builders and contractors ordering materials in multiple phases of construction.
Traction: A $10 million Series C extension from Wesco International.
The Reality Check: While companies claim their integration eliminates manual data entry, buyers should use case studies to show proof of true reductions in late deliveries and lost materials.
6. Planera
Scheduling systems change at a rapid pace, and the company has designed Planera to help with automated scheduling processes. In addition, Planera has a feature that automatically identifies when project activities are delayed.
Target Market: General contractors, and particularly in the data center construction sector, have supported the majority of Planera's business.
Traction: Planera raised an additional $8 million in capital through their Series A funding round.
The Reality Check: Many industry-leading organisations, including Ryan Companies, are using Planera as part of their enterprise system. Planera's documented improvements in scheduling efficiencies are proprietary internal information to those organisations.
7. Fyld
Construction jobsites are a dangerous environment. Fyld collects short video clips from field workers that establish metrics for safety, quality, and delivery risks associated with construction jobs.
Target Market: Large-scale contractors, whose projects span multiple construction sites, require the ability to monitor all of their projects' safety and quality conditions.
Traction: Fyld successfully secured $41 million through their Series B funding round.
The Reality Check: Fyld states that its clients have successfully reduced serious injuries by nearly half (48%), and have enjoyed 82% annual sales growth. However, these are client-reported claims that have been verified by third-party sources like Kiewit, which uses Fyld to track safety and quality on its projects.
8. Sensera Systems
Management of remote job sites necessitates having real-time visibility and tracking of safety and progress by project with remote job site monitoring technologies. SiteCloud is the technology used by Sensera to automate tracking and reporting of key project milestones through images from the job site.
Target Market: Contractors managing the following types of jobs or working in the following types of environments: safety and health, and regulated jobsites (i.e., OSHA).
Traction: Sensera secured $27 million in Series B financing.
The Reality Check: Weekly progress summaries produced by Sensera help communicate information to stakeholders, so the buyers of Sensera need to determine if the weekly summaries will result in lower travel costs and/or a reduction in job incidents.
9. XBuild
Estimating projects takes a lot of time. XBuild allows trade contractors to generate and send an estimate in less than 15 minutes using their report or description of the project. In addition, XBuild streamlines the creation of contracts and payment processing for contractors.
Target Market: Specialty trades; they started with roofing and are now moving into additional areas such as concrete, HVAC, and painting.
Traction: $19 million received in funding.
The Reality Check: The company's 15-minute estimate is just a product claim; take your most complicated job that you completed recently for a real-world check.
10. Moab
Equipment rental businesses use antiquated software; Moab was developed to replace these outdated on-premise software systems to help manage their fleets and transactions.
Target Market: Equipment rental companies in the mid-market and enterprise space.
Traction: $16 million was raised in a combination of seed and Series A funding.
The Reality Check: Moab claims to be at an annual transaction volume of $2.5 billion in the near future. Projections are not actual results. Check the integration restrictions before you completely uninstall your legacy software.
11. Payra
Cash flow in the construction industry is what causes cash flow issues; Payra helps solve accounts receivable (AR) and cash collection for contractors through integration with existing ERP systems, thus not requiring customers to resubscribe to software systems.
Target Market: Industrial suppliers, concrete producers, and distributors, who utilize Sage, NetSuite, Viewpoint, etc., as an ERP.
Traction: $15 million in growth-equity investment.
The Reality Check: Payra claims to provide a 20% reduction in days sales outstanding (DSO) and a 75% reduction in past due invoices. These reported numbers must be validated by the customer to determine whether their RFP tool will pay for itself.
12. Brickanta
RFP packages take up the majority of procurement teams' time; Brickanta has a product that reviews your project documentation and compares it to your industry standards and will provide an RFP from the information you provided in 15 minutes.
Target Market: European contractors who follow the Eurocodes, as well as other shared standards.
Traction: It raised $8M in seed funding and is rapidly building its team.
The Reality Check: Fast RFPs provide no value unless they contain accurate information. A buyer must review and evaluate the AI output thoroughly against the human standard.
13. TerraFirma
Heavy civil construction can be extremely hazardous and expensive. TerraFirma has developed semi-autonomous heavy machinery - dozers, load and excavators - and has paired them with remote commanding software.
Target Customer: Major infrastructure builders and heavy civil contractors.
Traction: In September 2021, TerraFirma raised an impressive $115M in financing with a $100M Series A financing.
The Reality Check: While the technology architecture looks impressive, buyers must observe how this equipment conducts itself under unforeseen soil and weather conditions before replacing their existing fleets.
14. Arrakis
Industrial enterprises typically struggle with incorporating AI into their legacy systems. Arrakis uses a team of engineers at the practice site to integrate bespoke AI agents into legacy workflows.
Target Customer: Large construction and industrial companies whose software is outdated.
Traction: They exited stealth mode with $37.5M in funding.
The Reality Check: They claim that agents can be trained in several weeks. This is a company claim; enterprise IT deployments usually take longer than sales presentations suggest.
15. Gritt
Buying a complete fleet of autonomous machines is too costly for most companies. Gritt retrofits currently used equipment such as skid steers and forklifts with robotic arms and computer vision capabilities.
Target Customer: Job sites that want to automate without discarding their existing machinery.
Traction: They launched with $32.4M in funding.
The Reality Check: They purport millimeter accuracy and enormous time savings. Pilot retrofit technology on lower-risk locations prior to scaling.
16. Monumental
Men have been building with brick for thousands of years, but it’s difficult to find skilled masons to build masonry walls. One solution to this problem is Monumental. The company has developed a robot that lays bricks.
Rather than selling this robotic equipment to you, Monumental will act as a subcontractor and charge you to build your walls using their robots.
Target Market: Developers looking to have masonry walls constructed but do not want to invest in heavy robotics.
Traction: Monumental has raised $32 million in Series B financing to date.
The Reality Check: According to Monumental, they have constructed walls for more than 100 homes and commercial projects in Europe. They also tell us that by subcontracting out the robot, they have transferred the maintenance responsibility of that robot back to Monumental, which is a very smart way for buyers to do business.
17. Buildforce
Buildforce is a technology-enabled staffing agency that uses technology to match electrical contractors with commercial project owners and their needs for skilled electricians.
Target Market: Electrical contractors who are having a difficult time finding enough skilled workers.
Traction: Buildforce has raised $10 million in Series A funding to date.
The Reality Check: Buildforce reports that they have created over 2 million hours of work for more than 2,000 commercial projects to date. The primary value of Buildforce's service lies not necessarily in the matching of contractor and electrician worker, but rather in the quality of the workers they provide.
18. SubBase
In an effort to eliminate billing discrepancies, SubBase has created an online system to unify the processes of making a pricing request, ordering materials, and reconciling invoices with the contractor's accounting software.
Target Market: Both self-performing general contractors and specialty builders.
Traction: SubBase has raised $7 million in Series A funding to date.
The Reality Check: SubBase is also developing an AI layer to help contractors evaluate and monitor their suppliers' performance. Until that layer is complete, the service can be summed up as helping contractors take their material orders from their text messages to an actual ledger.
19. OpenSpace
Jobsites undergo constant change. OpenSpace relies on both hard hat cameras and photographs taken on construction sites to automatically keep record of everything that happens on a construction project as well as track the progress of a project over time.
Target Audience: Teams who are coordinating complicated or far reaching projects.
Current Growth Level: According to their investment database, OpenSpace has raised about $199 million.
Current Assumptions: OpenSpace has been estimated by three different industry experts to be charging approximately $10,000 a year on a per enterprise customer basis for smaller customers. It may be worth getting a quote directly from OpenSpace on that pricing. OpenSpace's tool is already validated and trusted by many construction companies at large.
20. DroneDeploy
Without being able to see your massive job site, you cannot effectively manage it. DroneDeploy provides the ability to provide aerial mapping of sites, take material volume measurements, and create progress reports.
Target Audience: Surveyors, sitework-like companies, and large contractors.
Current Growth Level: They have reached their break-even point, and have also received strategic funding of $15 million.
Current Assumptions: There are significant differences in pricing models based on the size of the team. DroneDeploy's solution has shown to work extremely well with dirt moves and large site mapping.
21. ICON
The slow process of constructing a house by hand does not work well for developers. ICON utilizes gigantic 3D printers to build residential structures from sophisticated materials.
Target Audience: Developers with large-scale housing and programs requiring housing to be completed quickly.
Current Growth Level: According to a number of market sources, ICON has raised approximately $492 million.
Current Assumptions: ICON is not a software as a service (SaaS) product. Instead, ICON requires a significant capital investment and other costs associated with developing and preparing a building site. However, once the correct planning has occurred regarding site development and ICON's technology is integrated into the site, it is an extremely efficient way to develop housing on a large-scale.
22. Higharc
When homebuilders create new homes, they are generally designing the exact same home a number of times with only minor variations. Higharc allows production builders to consolidate their design efforts into a single cloud-based resource.
Target Audience: Residential developers and production builders.
Current Growth Level: Higharc has received $95 million in funding through their Series C round.
Current Assumptions: If you build custom luxury homes, Higharc is not going to be a fit for you. Building 500 similar homes within one large development allows for the standardization of your operations.
Market Trends For Construction Tech Startups
In terms of raw dollar volume, the built-environment area is raising a lot of money. By the third quarter (Q3), year-to-date (YTD) funding was $3.7 billion and funding is growing rapidly year-over-year. The money, however, is not evenly distributed across all areas; rather it is concentrated in very few areas or "work flow" categories.
Pre-Construction Is a Priority
Mistakes made on paper (e.g., taking too long to finalize plans) can be very costly, but when a contractor makes a mistake in the dirt (i.e. building something incorrectly), the losses are much larger, often thousands of dollars.
As such, funding into pre-construction processes has recently reached $400MM across 40 deals, representing a huge jump (225%) when compared to last year. Investors know that by automating estimation processes, bidding processes, and design review processes, they will realize ROI significantly faster and more dramatically than any other process.
If a product can reduce a contractor's takeoff by 3 weeks to a 2-day review process, that contractor will pay for it today.
Shift in Robotics Use to a Service Model
Robotics funding growth increased by 125% year over year and represented 37% of all of the total sector's funding. We are seeing a marked change in how these products are sold.
Many contractors do not want to purchase a $500,000 bricklaying robot and figure out how to maintain it. Rather, they want to contract with the robotics company as a subcontractor to perform the work, lowering their financial risk.
Companies that provide hardware as a service models or retrofit equipment with new robotic technology will be winning in this segment.
Awakening the Specialty Trade
The majority of construction software is directed toward general contractors, however the 63% of construction workers in the USA are specialty trades. Specialty trade contractors make up over 5 million in the USA with approximately 80% of them being self employed.
These contractors do not require a large, complicated platform to manage their business; rather they require simple mobile applications to manage their payroll, track materials used and receive payment faster.
In the last quarter alone over $750 million has been invested into construction tech startups for specialty trade contractors, indicating that the market has finally recognized those individuals who construct our buildings.
How To Choose Construction Tech Startups Before Buying
It is common for software demos to be flawless. It is rare that job sites are perfect. Therefore never rely solely on the demo and use an absolute, uncompromising standard to determine the credibility of a new vendor in the construction technology industry.
Integration Is Essential
The construction industry as a whole relies on established systems such as Procore, Autodesk Construction Cloud, Sage, and NetSuite.
Without the ability for a new AI tool to pull and/or push data to/from an existing ERP or project management application, do not purchase the tool.
Without integrated systems your team will be forced to enter data into two different systems, increasing error rates and causing your field team to stop using the new tool altogether.
Proven Baselines Are Essential
Vendors love to tell potential customers that they will "revolutionize" or "transform" the way they do business. Ignore all sensationalist vendor claims.
Ask for concrete details about what tasks a vendor's product replaces. Ask about the verifiability of the ROI metrics being claimed, particularly if claimed ROI has only been substantiated by satisfied customers.
If a vendor states that they can reduce the time needed to process invoices by 75%, demand to speak with a customer currently performing similar trades with similar project volumes in order to validate that percentage figure.
Implementation Barriers
Ask how long it will take to get the new system up and running; if the vendor states that it is going to take six months to set it up with the help of their IT consulting team, walk away!
The most effective tools available now allow you to prepare and test them on a single controlled project by developing your testing in less than 30 days.
If a vendor requires you to perform a company-wide or multi-year rollout before you can test their product in actual real-world conditions, remove them from your potential vendor list.
Bottom Line: Stop Buying Hype, Fix Your Bottlenecks
The days of purchasing technology simply for the purpose of being viewed as innovative are no longer viable. The market has shifted to meet the need for construction companies to maintain their gross profit margins in light of rampant inflation and decreasing availability of adequate labor.
Start-up companies that will survive in the next three years will not be the ones with the best marketing and most sophisticated AI models.
They will be the start-ups that understand how to electronically track the late delivery of a lumber order, or how to sort through and produce bids from a large volume of documents in the middle of the night.
Look closely at your own business. Identify the top three areas where your team wastes the most time; spend time and money finding the right construction tech startups dedicated to fixing the highest area of waste and your company will be able to return to being profitable.