Construction tech startups are on track to see another yearly decline in deals this year following a peak in 2018. Despite the expected decline, however, funding appears to be bouncing back, driven by the integration of frontier technologies — such as AI, robotics, and 3D printing — into the construction process.

Below, we take a closer look at funding trends in construction tech.

Our definition of “construction tech” includes companies that are leveraging software or robotics to digitize, automate, or orchestrate construction processes.

despite deal Decline, funding bounces back

From 2015 to 2019, investors allocated $5.1B to construction tech startups across 571 deals.

Global deal activity in the space grew from 2015 to hit 130 deals in 2018. Funding notably spiked that year when prefabricated construction and project management startup Katerra raised nearly $1B in its Series D round.

Deal activity in 2020 year-to-date (YTD) is on track to come in at its lowest volume since 2016, a 19% decline year-over-year (YoY) at the current run rate.

Funding, on the other hand, is showing clear signs of growth and is expected to reach $1.3B in 2020, a 56% increase YoY.

The uptick in funding has been driven by 2 mega-rounds (worth $100M+) this year:

Additionally, prefabricated construction startup Prescient raised a $90M Series F in June.

Historically, construction tech startups have focused on developing Software-as-a-Service (SaaS) tools that digitize the project management, risk management, and procurement processes. But now, the space is seeing a greater emphasis on integrating AI, robotics, and other emerging technologies into the construction processes.

A number of startups developing these technologies have raised financing in 2020:

• ICON 3D raised a $26M Series A in February. The company develops 3D printing technology for cement-based, single-story residential properties.
• Briq, which offers an AI-based financial forecasting platform for construction managers, raised a $10M Series A in May.
• Gauzy, an Israel-based startup working on smart glass that can be used to control shading and window displays for residential and commercial buildings, raised a $10M Series C in April.
• ALICE Technologies, which creates 3D construction project simulations with AI, raised a $7.3M Series A follow-on round in March.