It’s clear that the construction industry has some challenges ahead of it. For one thing, skilled laborers are aging out at an impressive rate. As it currently stands baby boomers, with a median age of about 56 make up 40% of the construction labor pool.

Add to this fact that there are already roughly 300,000 vacant construction jobs, and a picture begins to form. A necessary industry with a debilitating problem. And yet, potential looms on the horizon. Tech solutions can mitigate construction challenges with robust venture capital fundraising leading the way and providing many benefits.

Long thought to be among the least technologically advanced industries in the nation, construction, valued at $1.5 trillion in the United States alone has vast potential to revolutionize the effectiveness of their operations—securing a bright future even amid a labor crisis.

Pain Points

Labor shortage notwithstanding, there are several pain points that ring out as familiar to construction sites all across the nation.

• The Division of Labor: Large construction projects commonly use hundreds of subcontractors making it difficult to operate with cohesion on a project.
• Communication: Not surprisingly, this division of labor makes information sharing very difficult. This is a real problem in an industry where miscommunications can not only slow progress but also result in serious injuries. 36% of construction workers have been in danger solely because of communication errors.
• Data Sharing/Implementation: The construction industry also lags quite seriously in the department of data, where spreadsheets, and even paper and pencil systems commonly account for the entirety of an operations data-tech.

All totaled, these tech solvable problems cost the industry a staggering $31 billion annually. In terms of monetary loss and human safety, these problems are an enormous issue for a significant US industry. And yet, ahead looms a technological disruption that could well hold the answers to many issues that modern construction companies face.

Construction Tech Startups

Since 2015, construction tech startups have witnessed an interesting trajectory where venture capital fundraising is concerned.

• In 2017 $731 million in VC went to construction tech startups
• In 2018, that number went all the way up to $3.1 billion
• In 2019, funding dipped considerably to $823 million.
• 2020 has since seen a 19% YoY decline.

Has VC for tech startups peaked? It’s possible. Industry-leading experts observed that 2019 was not a significant year for emerging tech startups, nor for the construction industry as a whole, which may have contributed to the decline. And, of course, the very unique conditions of 2020 make it difficult to forecast what this year’s dip means for the future of construction tech funding.

However, there are still many construction tech startups that have been on the receiving end of some serious VC.

• ICON 3D raised a $26M February
• Briq raised $10 million in May
• YardLink raised £1.7 million seed round
• Built Robotics raises $33M

As of right now, the major emphasis in construction tech seems to be on AI and robotics. However, everything from 3D printing to financial forecasting software are finding VC success. Despite apparent VC dips in the last two years, construction tech is well-positioned for a bright future. As you can now see, tech solutions can mitigate construction challenges.

If you want to know more about how to accelerate your Construction startup, contact us at hello@product10x.com.

About the Author: Suresh Madhuvarsu is a serial entrepreneur and investor. He is the Managing Partner of Product10x Accelerator, a SaaS accelerator that helps founders build and launch successful startups. He is also the Co-Founder and CEO of Salestable, a purpose-built sales readiness platform for SMBs.

Suresh has over 20 years of experience in the technology/SaaS industry. He is a 4x founder with 2 exits. He is also an active angel investor and mentor to early-stage startups. Suresh is passionate about helping entrepreneurs build successful businesses. He believes that technology can be used to solve real-world problems and improve people's lives.

About Product10x: Product10x is a SaaS accelerator that helps founders build and launch successful startups. The accelerator is run by experienced operating partners who have "been there and done that." Product10x provides founders with mentorship, advisory, and access to a network of investors and partners. The accelerator focuses on Product Led Growth (PLG), Sales readiness, and Fundraise readiness, helping founders all the way from product to go-to-market.