Construction tech is one of those verticals that is not enormous. But it has certainly grabbed a lot attention from investors.
Recently, I met with a Bay Area-based VC firm that specializes in early-stage SaaS. He in particular has invested in a trucking-related company and an insuretech deal. But when the subject of other vertical sectors came up, he nodded his head and said he absolutely would love to invest in a construction tech company.
I relayed this story to Darren Bechtel, founder and managing director of Brick & Mortar Ventures in San Francisco. He and I met for hot tea at The Battery.
He said he gets at least one call a week from other VCs, who are wanting to co-invest in early-stage construction startups or are looking for a pipeline of such deals to invest in the later rounds. He also gets calls from folks looking to join construction tech companies or launch their own startups. The pipeline of deals is strong.
Earlier this year, Brick & Mortar, which focuses on construction tech, wrapped up its debut fund with $97.2 million in commitments. Bechtel has construction and engineering in his family tree (he is the great-great-grandson of Warren A. Bechtel, who started the Bechtel engineering and construction conglomerate in the early 1900s).
He told Venture Capital Journal that he came up with the idea for the firm four years ago when he was using his own capital to build up a portfolio.
Among the startups he seeded in 2012 was PlanGrid, which Autodesk bought last year for $875 million, and he was a backer of BuildingConnected, which Autodesk purchased for $275 million, also last year.
Crunchbase reported that construction tech peaked in 2018. But Bechtel says that construction tech is only going to heat up more. Part of the reason is because of construction management software company Procore Technologies. The company, located near the Santa Barbara, California, coastline, is planning to register for an IPO before year’s end and will go public in early 2020.
Bloomberg reported the company could be valued at about $4 billion.
Procore, which has received backing from such investors as Tiger Global, Bessemer Venture Partners, ICONIQ Capital, Dragoneer and Lumia Capital, among others, has raised about $300 million, according to Crunchbase.
Brick & Mortar is not an investor in Procore. But Bechtel acknowledges the success of that company and expects its public offering, which is not certain, will help lift the construction tech startup industry if it happens.
I would love to hear your feedback about construction tech and anything else venture-related. You can contact me via my email at firstname.lastname@example.org. I’m based in the San Francisco Bay Area and happy to meet folks in person.
I look forward to hearing from you.
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