Exploring the growth of construction technology startups
Many older management executives within the construction industry never worked with desktops or laptops. Though they were receptive to mobile devices, they had to adapt elsewhere. It wasn’t until the proliferation of smartphones and tablets that project managers had true computing power at their disposal.
Naturally, this intimidation factor with technology led to issues with inefficiency and productivity. Even after construction professionals started to employ digital technology on job sites, they needed systems designed for their day-to-day activities in the field. The transition was slow and somewhat troubled.
In acknowledgment of these challenges — and the opportunities they present — technology startups have concentrated their efforts on the multi-trillion dollar industry. They’ve begun to develop applications and tools that transform the way companies design, plan, and execute their construction projects.
With access to improved analytics, advanced software, and industry-focused hardware, construction companies can address many of the problems that held them back in the past. Here are some of those solutions and the startups that have made this progress possible.
Setting the Stage for Change
In the first half of 2018, investors poured a record-breaking $1.05 billion into a number of construction-technology startups. The midyear total was 30 percent above the total investment volume for all of 2017, according to a report from the global real estate services firm Jones Lang LaSalle Inc.
More than money invested, the firm also tracked 119 deals related to construction-technology startups, up from a total of 104 the year before, and up from just 97 in 2016. These numbers reflect that both startups and investors see the potential in construction technology.
A significant part of this potential comes from improved connectivity on job sites. Internet connectivity has allowed for the integration of new technologies and increased the likelihood of their adoption. The development of these technologies is essential to acknowledge as well.
Unlike highly automated industries such as manufacturing and agriculture, construction still has a strong human element. Technology has advanced to a point where it’s useful, even with that human element. Since new systems and software are accessible and functional, the demand remains.
This demand also arises from the assimilation of technology in day-to-day life, outside the workplace. When people use technology in their personal lives, they’re more willing — and often eager — to use it in their professional lives as well. These factors have created a prime opportunity for disruption.
Delivering on the Promise
Today’s startups are developing a diverse range of technologies to simplify and streamline the construction process. These technologies include cloud-based collaboration software, project management tools, off-site construction capabilities, and systems that integrate big data and artificial intelligence.
As an example, Fieldwire offers a mobile platform that allows staff to add markups, annotations, and hyperlinks to blueprints while they’re out in the field. The ability to update project documents while on site might seem simple, but it’s an incredible convenience for workers who have never had that option before.
Other startups are also assisting with digital collaboration, creating and improving upon systems that enable managers to update and share information in the field. Some performance dashboards are capable of importing field data automatically, accelerating the data collection process by a considerable margin.
Construction Technology Startups to Watch
Of these startups, ALICE Technologies is exceptionally impressive for its artificial intelligence scheduling engine. It evaluates millions of different options and determines dozens of schedules optimized across time and cost. The engine also enables rescheduling in minutes if issues or opportunities present themselves.
Imerso has shown promise as well. Its scanning software for mobile devices can create a 3D reconstruction of a building through video capture with phones or tablets. Other startups such as Propeller Aero expand on the capacity of existing equipment like aerial drones with a program that automatically process photos into mapping, modeling, and inspection data.
Silicon Valley’s Katerra has also received serious attention from investors. It’s a tech-driven end-to-end building services provider that integrates design, materials, procurement, manufacturing, and construction, taking a holistic approach to building.
This doesn’t mean the field is dominated by a few forces. Smaller startups have shown just as much potential. Rhumbix has designed a tool for digitizing field data on sites. It can track timekeeping, production, and T&M tags from a smartphone app, saving an average of 2.5 to 3 hours every week on paperwork, according to the company’s estimates.
Making Predictions for the Future
Startups such as Katerra and Rhumbix will continue to transform the construction industry well into the next decade. If these companies remain on their current trajectory, certain speculations about the future of construction technology seem safe. Nothing is guaranteed, of course, but trends are telling.
Venture and investment activity will center on field productivity and site-performance management, as it presently does. These areas will see even greater attention as new systems emerge to contend with some of the problems that plague the industry today. This only scratches the surface.
Startups will integrate the Internet of Things with more of their technologies to increase connectivity on jobsites. As for the job sites themselves, they’ll take on new significance as test labs to view the effects of systems and software on the success of a build. Managers should expect a lot of trial and error.
The Rapid Pace of Change
The rapid pace of change and innovation has shifted the construction industry in a new direction. With cloud-based collaboration software, digital data collection, and the integration of artificial intelligence, it’s difficult to believe that many management executives were at one time unfamiliar with desktops and laptops.
More than that, it’s impressive to see how far the industry has come in only a handful of years. Those in the field of construction have made amazing progress in the last decade alone, and they’ll continue to make strides and overcome obstacles as long as they have support from today’s startups.
Moving forward, investors and industry professionals should feel optimistic about the future. They’re building something incredible, and with each passing year, it’s coming into view.
Written by: Holly Welles
Holly Welles is a real estate writer who covers the latest market trends in everything from residential to commercial spaces. She is the editor behind her own blog, The Estate Update, and curates more advice on Twitter.