A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.

Homebuilding has long been one of the slowest industries to modernize, and commercial construction isn’t far behind. Its scale is enormous, and yet it remains one of the least digitized industries in the world. 

That lack of innovation in commercial technology contributes to outdated documentation and errors in tasks that then have to be redone as well as administrative drag. It’s a huge drain on time, budgets and materials and can lead to costly delays and unnecessary environmental waste.

All told, it contributes to nearly $1 trillion in lost productivity each year, according to an August 2024 report from McKinsey Global Institute. Historically, construction companies spent an average of less than 1% of revenues on IT, less than a third of what is common in automotive and aerospace, according to the report.

Sarah Buchner learned all this the hard way. The daughter of a carpenter in Austria, she came to the U.S. to learn construction and worked her way up to foreman, superintendent and eventually contractor. 

“At the peak, I was running a $400 million high-rise, 600 guys working for me in the job. And on that specific construction side, I had a fatality, which in construction happens, unfortunately, a lot,” she said. “But I was, I think, very young, and couldn’t fully process what was happening.” 

So Buchner decided to build a health and safety app, switching careers from construction to construction software and construction tech. A decade later, with the proliferation of AI, she launched Trunk Tools, a generative AI platform trained on real construction workflows. It automates some of the more tedious tasks and also pinpoints project risks and simplifies documents.

“We take all of the unstructured documentation on a construction site, and we use different AI and machine learning tools to restructure it,” Buchner explained, noting that an average high-rise project in New York City, costing about half a billion dollars, would require about 3.5 million pages of documentation. 

“Those pages change every single day, because the planning isn’t finished by the time you start construction,” said Buchner.

So contractors often get conflicting orders and can’t search the documents to clarify. For example, take the installation of an emergency exit door. One data set says it needs electricity, but the electrical drawings don’t have an outlet there. Discrepancies in the data, Buchner says, not only waste money but contribute to carbon emissions due to work inefficiencies.

Trunk Tools’ technology can process millions of unstructured documents, from blueprints to drawings to schedules and specs, and then return them in a clearer format that workers can better follow. The startup is partnering with Microsoft to integrate the technology into the company’s suite of options.

Trunk Tools just announced a $40 million Series B funding round led by global software investor Insight Partners with participation from Redpoint Ventures, Innovation Endeavors, StepStone, Liberty Mutual Strategic Ventures and Prudence. This investment brings its total funding to $70 million.