NEW YORK (Reuters) - Brick & Mortar Ventures, a venture capital fund founded by a scion of family-run Bechtel Corp, said on Tuesday it had raised $97.2 million from leading construction-related companies as builders turn to 3D printing and other software to cut costs and boost productivity.
San Francisco-based Brick & Mortar initially raised $50 million in late 2017 and the remainder in January to invest in construction, an industry that was slow to embrace technology. The fund is one of the first to try to digitize construction.
Recent deals and valuations surpassing $1 billion, led by Oracle’s acquisition of Australian construction management software provider Aconex Ltd for $1.2 billion in 2017 made investors take note of building-related technology start-ups.
“There’s now a sense of urgency,” Darren Bechtel, founder of Brick & Mortar, said in an interview.
“All of a sudden, the investor market is waking up,” said Bechtel, whose brother Brendan is chairman and chief executive of Bechtel, one of the world’s largest engineering, construction and project management firms.
The company has not invested in Brick & Mortar. The fund, Brick & Mortar Ventures I LP, its investments and limited partners, were formally announced Tuesday.
Other investors include software maker Autodesk Inc (ADSK.O); Mexican cement company Cemex SAB de CV (CEMEXCPO.MX); Sidewalk Labs, an Alphabet company (GOOGL.O); and Obayashi Corp (1802.T), a leading Japanese construction company, among others.
Two other deals involving construction-related software last year proved Aconex was not a one-off.
Trimble (TRMB.O) acquired Viewpoint for $1.2 billion in April 2018. Then last November Autodesk paid $875 million for PlanGrid, which had been Bechtel’s first investment in building-focused technology back in 2012, when he took part in a $1.1 million seed round of funding, according to Crunchbase.
Big efficiency gains can occur in labor productivity if a company can figure out how to increase time dedicated to work or reduce the number of people out in the field, where 40% to 60% of a project’s cost can be labor, Bechtel said.
Resolving the high amount of construction material that is wasted also is ripe for innovation. Some 40% to 50% of the world’s solid waste is estimated to be construction materials.
Branch Technologies, a portfolio company, is introducing new ways of construction through 3D printing, which limits waste as only the amount of material needed is used. The days of cutting lumber down to size and discarding the pieces may be over.
Reporting by Herbert Lash; Editing by Nick Zieminski