led the company’s Series A, which was raised in just three weeks and included participation from repeat backers and . The round also included an investment from new strategic backer , a real estate and technology investment firm. It brings New York-based Trayd’s total funding to $17 million.

Co-founder and CEO grew up in a New York construction family, watching her father navigate razor-thin margins and complex compliance requirements.

“I saw firsthand the operational strain that comes with juggling union rules, multistate labor laws, and endless manual back-office processes,” she recalls.

The experience inspired her to team up with , the company’s CTO, who spent 10 years as ’s web platform lead, to start Trayd in 2021.

Specialty trade service

For the unacquainted, specialty trade contractors are businesses that place skilled workers on job sites to perform the actual physical building work. These contractors include concrete crews, electricians, plumbers, ironworkers, painters and fireproofing. They’re distinct from general contractors, who manage and coordinate projects overall but don’t typically perform the hands-on trade work themselves.

Trayd automates payroll, HR, compliance and labor cost tracking for such contractors. Among the benefits it touts are providing real-time visibility into the costs of labor, equipment and materials.

The startup aims to substantially cut the time specialty trade contractors spend on its weekly payroll and compliance process.

“What used to take 14 hours of manual work can now be done in under 30 minutes,” Berger told Crunchbase News.

Trayd is working to fill what it believes is a unique gap in the market. While there are significantly more specialty trade contractors than general contractors, the majority of construction technology has been built for the latter, Berger believes.

The startup’s closest competitors are legacy payroll providers like and , along with newer companies like and .

“The difference is that most of these systems weren’t built for the complexity of specialty trades,” Berger explains. “Trayd was.”

Streamlining payroll

In construction, compensation is uniquely complex, Berger said. A single worker might earn four different pay rates in a single day depending on the specific trade task, the project scope and the jurisdiction.

“Generic” payroll platforms cannot handle this constant rate variability, contends Berger. For example, payroll admins might receive stacks of paper timesheets or phoned-in hours from various job sites. Then they have to manually key all of that field data into Excel spreadsheets and calculate the pay rates by hand, factoring in union rules, prevailing wage requirements and state-by-state taxes.

They might then have to cross-check the spreadsheet math and manually double-enter the finalized numbers into a generic payroll system, and then again into their accounting software.

Trayd, according to Berger, dramatically reduces the time to perform all those tasks by capturing the time data directly from the field and automatically calculating the correct variable pay rates, union deductions, and multistate taxes.

“Unlike salaried workforces, construction workers can earn multiple different rates in a single day depending on the trade, the project, and whether the work falls under prevailing wage, state or union requirements,” she said. “Trayd was designed from day one to handle that complexity.”

National expansion

The product seems to be resonating in the industry. Trayd has grown revenue over 600% year over year and moves tens of millions of payroll dollars each week, according to Berger. Several hundred contractors use Trayd weekly. , and are among its customers.

The startup operates on a SaaS model, with pricing tied to the number of workers processed through payroll.

Trayd started in New York and the broader Northeast, where union density and regulatory complexity are highest. It is now expanding nationally. Presently, it has about two dozen employees.

Before Trayd, Berger co-founded , a consumer social platform that is now defunct.

She acknowledges that being female founders in a male-dominated industry has not been easy.

“As women building in construction — where we’re outnumbered 9 to 1 — the default assumption is that we’re too far removed or don’t have access to truly understand the problems on the ground. In the early years especially, there’s a ‘prove it twice’ dynamic. Without the benefit of the doubt, we had to earn credibility through repetition —- every meeting, every deal, every product decision. We’ve had to work twice as hard to be taken seriously,” she told Crunchbase News. “But that pressure becomes an advantage. You show up more prepared, you listen more closely, and you build conviction faster. Over time, that compounds into a better product and deeper, more trusted customer relationships.”

, general partner at White Star Capital, said his firm was first impressed by Trayd’s founding team, describing Berger and Kessler as “a rare combination.”

“Anna’s background and family ties to the space allow her to understand the unique pain points contractors face from the inside,” he wrote via email. “Cara brings the technical depth to build mission-critical systems without sacrificing product simplicity.”

Beyond the caliber of the founders, White Star also believes that Trayd stands out because “it is truly a better product for its customers.”

“On a technical level, we were very impressed by how thoughtfully the product has been built,” Lee added. “We see that as a real advantage, because by structuring data cleanly at the system level, Trayd is better positioned to scale reliably and to become a strong foundation for AI in the construction industry over time.”

Venture investment in property technology startups has rebounded in recent years after plunging from the pandemic peak. In 2025, startups in the sector pulled in approximately $10.5 billion in seed- through growth-stage financing globally, per Crunchbase . That’s up about 17% from $9 billion in 2024, with much of the recent investment going to startups that promise greater ROI through the use of automation or AI.

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As we’ve reported extensively, construction tech is one of those spaces that has not been considered traditionally sexy. It is, however, an industry that is growing both in terms of the number of companies receiving funding in the space and in terms of more mainstream investor interest. It’s also seeing more exits.

Southern California-based Procore is reportedly working with Goldman Sachs Group to lead an IPO, which could value the seventeen-year-old company at more than $4 billion, according to Bloomberg, which cited “people with knowledge of the matter.”  In December, we reported how the company had tripled its valuation to $3 billion after raising a $75 million Series H from .

Bloomberg wrote: “The company is preparing an IPO for this year or early next year, said one of the people, asking not to be identified because the information is private.”

I reached out to the company for comment but it declined to provide any.

Last month, I reported on Procore acquiring its third startup in 12 months as part of its plan to broaden its offerings through M&A.

Procore, which operates as a SaaS company, has seen impressive growth in recent years. As of August, it had more than 1,800 employees, up 600 compared to a year ago, across 13 offices globally. Procore has also seen its ARR (annual recurring revenue) surge from under $10 million in 2014 . In August, I talked with Procore Founder and CEO by phone about the company’s M&A strategy, and he told me then that was “just the beginning.”

Overall, M&A has been rampant in the construction tech industry, as we reported in May 2018. Over the years, large tech companies have been scooping up industry-focused startups that were developing relevant technologies faster than they could. These days, we’re just seeingin the space in general, according to Crunchbase data. For example, in June -backed , a provider of design and construction-related services to broadband service providers, announced it had purchased , a specialized civil engineering and construction firm. And, software giant acquired three startups last year, including its $875 million purchase of and $275 million buy of .

Meanwhile, funding in the space appears to have reached a peak in 2018, and has slowed some this year so far. Last month, we reported on closing on a $97.2 million fund to invest in construction tech startups. I’ve also covered a number of recent fundings in the space, while not necessarily large, involved some big name investors. Last week, for example, I wrote about , which has developed a cloud-based software product designed for those working in the construction field, raising $33.5 million in a round led by .

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led the financing, which also included participation from existing investor , , and . With the funding, which combines a previously undisclosed $8.5 million Series B and $25 million Series C, San Francisco-based Fieldwire has now since its inception in 2013. As part of the financing, Menlo Ventures Partner is joining Fieldwire’s board.

We’ve written extensively about how the sector has seen increased investor interest in recent years. It’s an industry that has been historically run with a more old-fashioned mindset when it comes to technology. But as new leaders emerge and its workforce becomes more mobile while demand has surged with a healthy economy, the industry has slowly become more open to new technologies. This has given startups such as Fieldwire the perfect opportunity to come in and help improve efficiencies and productivity in an industry rife with challenges in both areas.

Fieldwire’s aim is to allow everyone involved in a construction project—from the back office to the numerous subcontractors onsite—to access and share information in real time. By offering a mobile-first solution, the company’s goal is to “make it easy for construction crews to track, record, and share project updates, ensuring proactive responses to all things related to quality, safety, and scheduling.” Users are typically project managers, engineers, and craft workers with a focus on labor coordination in an effort to help fuel productivity.

What’s interesting to me in covering this funding is just how bullish Fieldwire’s investors are about the company’s prospects. Both Menlo’s Sosin and Brick & Mortar Ventures founding partner and managing director raved at length about the company and its potential. One characteristic about Fieldwire that was particularly appealing to both is the company’s ability to be cash flow positive in an era when deeply unprofitable companies are going public and raking in huge funding amounts.

Indeed, being cash flow positive is impressive. Over the years, Fieldwire has quietly already been used by more than 2,000 companies across over half a million projects globally. It’s managed to win company-wide agreements with huge construction companies including Australia’s , out of Canada, and U.S.-based .

By focusing on the craft workers and subcontractors, Fieldwire is winning over those in the field who are then taking their observations to company’s decision-makers, according to Bechtel.

Background

In a phone conversation Fieldwire CEOsaid that when he studied construction at , he observed that most technology was aimed at architecture and design firms. With parents who had remodeled houses as a hobby, Frinault had seen firsthand how behind the construction industry was when it came to utilizing technology to make projects go faster and more smoothly.

“You’d go from looking at a 3D model to going to a site where it was back to the Stone Age with paper and pencil,” he said. “Everybody was trying to plan the perfect project. But if you’ve spent any time on a [construction] site, you know it’s always different than what you plan. I recognized we needed better tools to organize teams and adapt to findings.”

This was around 2006-2007 and Frinault realized his ideas were a bit nascent for this technology-resistant industry.

“The cloud was not something construction companies were comfortable with at that time,” he said.

So Frinault left his idea on the backburner until about 2013 when he and co-founder both quit their jobs to make the concept behind Fieldwire a reality.

“I remember saying ‘Let’s give each other six months to see where we can get and if not far, we can look for another job,’” he recalled.

To their surprise, it wasn’t small companies that were initially interested in using the Fieldwire platform. “Really big companies” started showing interest.

“We were only five people at the time,” Frinault said. “It was a little scary. But we kept building, and selling the product.”

The startup raised in 2015 and continued to grow. It found that word of mouth was drawing more attention to its offering.

“Most companies in our space tend to distribute from the top down with sales people trying to convince people to use it,” he told me. “But we distributed a built product with foremen on site who downloaded our app and started sharing it with more and more people so that ultimately, the headquarters of a company would have everyone in that company using it.”

As the company started getting “some large deals,” it recognized the need for more capital, hence an $8.5 million undisclosed series B “insider round” and more recently, a $25 million Series C.

Fieldwire has been cash flow positive since December of 2018 and growing rapidly. Unlike other SaaS companies, Fieldwire said it is at an advantage because most construction companies pay for a year upfront as opposed to a month-to-month basis. As such, the company has seen its annual recurring revenue (ARR) increase two to three times every year, according to Frinault. Currently, Fieldwire has 65 employees, up from 35 at the beginning of this year, with plans to reach 150 by next summer.

“With this raise, we’re going to start hiring very, very aggressively so we might see that change,” Frinault said. “But every dollar we’re raising is not to finance heavy burn. We didn’t need to raise it and could have raised twice as much if we wanted. But the capital will allow us to build a better company.”

Looking ahead, Fieldwire plans to use the new funds to fuel research and development as well as to further global expansion. Besides its San Francisco headquarters, the company has offices in Phoenix, Arizona, and Paris, France. The company plans to open an additional office in Australia by year’s end.

“We already have very large customers in Australia,” Frinault said. “Our model allows us to not need to be physically present in every market until we have very large customers there. At that point, it’s good practice to be able to visit them once in a while.”

Investors Weigh In

For Menlo’s Sosin, the investment is in line with his firm’s ongoing thesis of looking for “really attractive vertical SaaS opportunities.”

“We were very familiar with the size of the construction space, and knew it was a Luddite category in terms of adopting technology,” he said. “At the same time, as the guard in construction seemed to be changing with the older people who were resistant to technology retiring to younger people with smartphones in their hands, there were suddenly higher expectations of doing things in a more digitally native way.”

Menlo recognized that construction was going to be one of the last big industries to use mobile and cloud-native software so the firm spent time in the sector looking for opportunities.

One of the things that gets Sosin excited about Fieldwire is that it has managed to “build out a huge amount of functionality” around task management.

This gives field workers a “digital Bible” of sorts to be able to see what’s been done and what’s been done correctly, he said.

Menlo is also impressed with the startup’s distribution model, which has helped with its capital efficiency.

“It’s easy enough for people to download and use and because it’s designed so well it’s spread virally,” he said. “One person on a project uses it and then suddenly the entire project adopts it and then the GC began using it in a couple of projects and then they’ll get an enterprise license to use on all their projects. It’s a very powerful model that not a lot of companies have been able to achieve.”

Brick & Mortar Ventures’ Bechtel, who first invested in the company in 2016, agrees.

Fieldwire, he said, went from an era of only construction-minded VCs really seeing its value to getting “term sheets from great tier 1 VCs.”

“It’s exciting to see that play out as we’d hoped,” Bechtel said.

Photos courtesy of Fieldwire; Blog Roll Illustration:

Note: This article was updated to reflect that this was not Menlo Ventures’ first investment in construction tech, and to break down the stages of the investment.

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�ұ�������Բ�’s ), the corporate venture capital company of the Bosch Group, led the round, which also included participation from , construction technology enterpreneurs (CEO and co-founder of Australian construction software developer ) and Rob Phillpot (co-founder and SVP at Aconex), and previous backer .

Previously, three-year-old Versatile Natures raised $3 million from Root Ventures, Tidhar, (the MINI-backed accelerator for “startups reimagining city life), and angel investors.

Versatile Natures has worked out of 3D design software giant  Build Space in Tel Aviv, Israel, since April 2017 although the company is not an investor in the startup. The company recently relocated its headquarters from Tel Aviv to San Francisco but most of its staff remains in Israel, including its engineering team in particular, according to co-founder and CEO .

Versatile Natures was founded after a casualty occurred at a construction job site in Israel where Oren’s brother was working as a project manager.

“It prompted me and my partner to examine why we were not looking at how we could better control the manufacturing process,” she told Crunchbase News. “He started drafting a solution on a Post-It that night that would enable data to flow out of a job site in a non-obtrusive way and run it through our platform.”

That Post-It landed on the desk of one of Israel’s top general contractors, Tidhar, which ended up using the company’s proof-of-concept and ultimately becoming a paid customer.

“We were pretty proud of landing our first customer for our full-stack hardware and software solution as an essentially bootstrapped company,” Oren said.

For now, Versatile Natures is listening to the requests of its current customers so that it can integrate more features and abilities into its platform.

“We’ve started with a limited offering, and are figuring out what the product can and should do so that we can deploy on a larger scale,” Oren told Crunchbase News.

Versatile Natures also plans to use the new capital to hire and “scale across North America.”

How It Works

Versatile Natures offers a holistic view of a construction project by mounting IoT sensors under the hook of a crane. The sensors “constantly collect and analyze data,” per the company, with the goal of giving site managers “actionable insights” such as “information on materials, redundancies, construction progress and crane utilization.” Ultimately, its goal is to turn any “construction site into a smart, data-collecting field for project improvement.”

The company’s patent-pending platform, dubbed CraneView, is designed to be non-intrusive and automated while increasing efficiency, safety and cost-savings, Oren said. The technology is already being deployed on construction sites across the U.S., including in San Francisco, New York, Miami, Seattle, San Jose, Fort Lauderdale and Hawaii. It’s also fully integrated with Building Information Models (BIM), Enterprise Resource Planning (ERP) as well as Project Management and other systems.

RBVC Managing Director Dr. said his firm believes the startup is “building an industry-changing AI and IoT solution that will transform how the world views construction.”

The funding is the latest in a flurry of investments into construction tech startups, as we’ve covered extensively. Last week, I wrote about , an imaging and AI-driven platform providing 360-degree visibility for construction sites, raising $14 million in a Series A round led by . We also reported last week that , a venture firm with deep domain expertise, had closed on a $97.2 million fund to focus on construction tech investing. In June, Savannah Dowling covered ��Ƿ����ٳܲ�����-��������� , a marketplace that allows companies to supply and rent construction machinery, raised a $5.8 million seed round.

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Other participants in the financing included a mix of institutional venture firms (, and ), the venture arm of commercial real estate brokerage () and a developer and construction company ( and ). Real estate developer and co-working giant also put money in the round.

WeWork and the participating construction company investors were all customers prior to backing OpenSpace, according to co-founder and CEO .

“In some ways, WeWork is very unique in the construction world, and in some ways they’re a glimpse into the future because the rate at which they are building is so fast and vast that they have to solve problems everyone else is coming up against, such as getting more work done with fewer people faster,” he said.

Founded two years ago this month by grads, San Francisco-based OpenSpace uses patent-pending artificial intelligence to “automatically create navigable, 360-degree photo representations of any physical space.”

“We’re using AI to augment workers’ capabilities by making documentation fast, easy and complete,” Kalanithi said.

The financing marks the company’s first raise since it closed on a $3.5 million in September 2017. So far, the company’s technology has been used on projects valued at more than $50 billion on a combined basis, including currently at the Spiral, a three million square foot being developed by Tishman Speyer in New York City.

The way OpenSpace works is that builders attach a small camera to their hardhats and walk around a construction site. Its technology “passively captures” imagery in the background. Per the company, that imagery data is then uploaded to the cloud, “where OpenSpace’s algorithms map the photos to project plans and stitch them together, creating a visual representation of the site similar in style to Google Street View.” The data then accumulates over time, so that builders have the ability to review site conditions from as little as a day before or as far back as years prior.

“OpenSpace makes it incredibly easy to walk a job site, gather detailed imagery and automatically generate a 360° view that’s pinned to the floor plan. What used to be a complex, laborious task is now a simple and elegant user experience,” said David Gerster, vice president at JLL Spark, a venture fund launched by commercial real estate brokerage JLL last year.

OpenSpace claims that customers report its technology “allows for 30x faster data capture compared to traditional, manual methods.” I

Looking ahead, OpenSpace plans to use its new capital to scale its operations, with a particular focus on sales and marketing, as well as to develop new computer vision-powered products.

“The product we have today allows us to collect a massive amount of information and we want to take that to build products that can analyze that information and make the lives of our customers much more efficient and easier,” Kalanithi told Crunchbase News.

In 2019, he projects the company will see revenue climb by “four to five times” compared to last year.

Background

OpenSpace’s founding team brings both a tech background and domain expertise to the table.

CEO Kalanithi sold his first company, , to where he eventually became president. More recently, he was an Entrepreneur-in-Residence (EIR) at Lux Capital. Co-founder also helped form  a social TV analytics company.

OpenSpace has purposely chosen to work with investors who are directly involved in construction and real estate, Kalanithi said.

“In this industry in particular, it’s really important to have people that are users and customers deeply connected to the company itself,” he said. “That’s what their lives are every day.”

Indeed, earlier today, we reported that , a venture firm with deep domain expertise, has closed on a $97.2 million fund to focus on construction tech investing. Its LPs are exclusively corporate strategics, or companies working in the industry in one form or another.

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Founder and Managing Partner is leading the charge.

“It’s safe to say I was born and raised in the industry,” he told Crunchbase News. “I started young, got dirt under my nails, and came to appreciate the challenges the industry faces.”

Bechtel’s family owns and has run construction and engineering behemoth The Bechtel Group for 120 years. The San Francisco company last year.

Bechtel is taking his personal experience to the next level as his firm Brick & Mortar closes on its first institutional capital. Construction tech startups, as defined by the company, are “emerging companies developing software and hardware for the industries of architecture, engineering, construction and facilities management.”

Bechtel is also no stranger to investing. He began backing startups as an angel in 2012 and personally funded Brick & Mortar’s early investments in the construction tech space.

And he’s already seen a number of impressive exits. For example, Bechtel was the largest investor in software startup s in 2012. That company was acquired by in November 2018 for $875 million. Bechtel also invested early in , which was also acquired by .

These two exits, however, point to a larger trend: construction tech, once a not-so-sexy industry, is increasingly attractive to investors. With a booming economy, construction companies have been busy and the need to become more efficient with time and money has created a gap for startups to fill.

Despite the activity in construction tech, Brick & Mortar has intentionally flown under the radar.1 However, now that the firm has closed its fund, Bechtel is ready to tell us more about how it operates.

A Look Inside Brick & Mortar

Brick & Mortar exclusively counts construction corporate strategics as its LPs, according to Bechtel.

Those LPs include the aforementioned Autodesk as well as Ardex, CEMEX, Ferguson Ventures, FMI, Glodon, Haskell, Hilti, Obayashi, Sidewalk Labs, and United Rentals. According to Brick & Mortar, all the LPs have the option “to share information concerning challenges its organization faces; to collaborate on opportunities it sees; and to explore emerging technology solutions that might be available for proof-of-concept pilots, co-development, or commercial use.” 2

As a Stanford-trained engineer, Bechtel ultimately joined and ran a medical device startup before becoming an angel investor. It was at that point he realized his passion for investing and focused his attention on putting money into other companies.

“While angel investing across a wide variety of verticals, I observed that out of my portfolio of roughly forty companies, the Built World investments were standout performers and looked to be the start of a larger trend,” Bechtel said. His first four construction tech investments were into the seed rounds of PlanGrid, , BuildingConnected, and . Bechtel acknowledges that his family name didn’t hurt in that it opened doors to deals involving investors who were somewhat intimidated by the highly regulated and complex construction industry.

“I got access to some pretty phenomenal deals from generalist, Tier 1 VCs who were looking at companies in the construction space but had limited knowledge of it,” he said. “So they’d reach out to me to assist with some of the deal flow and valuation and to be a value-add investor.”

Over time, Bechtel realized that “it wasn’t scaleable to be a generalist.” He was also encouraged by the rapid growth, impact, and early success of the companies he’d backed. So in 2015, Brick & Mortar Ventures was born.

Bechtel is also a former classmate, and close friends, with , the co-founder of another venture firm in a similar space that also recently announced the close of a $503 million fund: . The pair even invested together for a while before deciding they were better suited to invest separately. While Brick & Mortar is focused more on construction tech, Fifth Wall invests in real estate tech so the two don’t really compete and actually often collaborate, according to Bechtel.

“There’s so much opportunity in these sectors so there’s not really a land grab yet,” he told Crunchbase News. “Eventually as more capital comes to the scene and more people see the potential in the space, we’ll see an increase in competition and valuations. For now, I believe we’re still in the early innings and we’re excited about the opportunities and value we can get as early-stage investors.”

Since the initial closing of its current fund in January 2018, Brick & Mortar has built up a portfolio of 16 companies including ,,, , and. Looking ahead, the firm plans to continue to lead seed and Series A rounds with a focus on the U.S., Canada, Europe, and Australia. It typically invests between $1 million and $4 million into new deals but also reserves some capital for follow-on investments in its portfolio companies. The firm’s team of five consists of Bechtel, Alice Leung, Kaustubh Pandya, , and Austin Yount.

“In 2014, there were a handful of startups in the space, sales were slow and confidence that the construction industry was ready for change and would spend money on solutions,” Bechtel told Crunchbase News. “But when we closed this fund, we had a backlog of 500 startups that we’ve been tracking for several years. So we were able to hit the ground running. And now we’re seeing people who were cautious observers become fast followers.”

In choosing investments, Bechtel said his firm studies the landscape and picks out the top performer in a space, pools its resources behind it in the form of capital, networks and relationships. Despite having industry players as LPs, Bechtel emphasizes Brick & Mortar is “not restricted on its investments at all by the desires of LPs.”

“This is not a shared corporate venture office,” he said. “It’s a traditional institutional venture fund, and we’ll deploy the funds as we see fit.”

Startups See Advantages

From the perspective of the startup, there’s a clear advantage to having an investor that not only has firsthand industry experience but also connections (in the form of LPs) to so many potential customers. Bechtel observed that founders in the space “really like” working with an investor who gets the space.

“I realized early on I was in a unique position to connect tech developers with industry users,” he told Crunchbase News.

is a Potomac, Md.-based startup that specializes in pre-sale home renovation that just closed on a $7 million that was co-led by Brick & Mortar and , a Washington, D.C.-based firm that offers capital and advisory services for real-estate businesses.

Rick Rudman, CEO of Curbio, told Crunchbase News that it was obvious from his first meeting with Brick & Mortar that the firm was “different.”

“Instead of just the usual business school crowd, sitting around the table were not only MBAs but also a team of people with deep expertise in all aspects of engineering and construction,” Rudman said. “When it comes to innovative technology for the built word, Brick & Mortar has put together a serious team. Every VC firm claims to deliver more than just money. This is one of the few firms that actually has the expertise and connections to deliver on that promise.”

Fundamentally, the time for such a step is right, said Bechtel, as the industry increasingly opens up to innovation.

“We no longer look like crazy people, being among the first to invest in this space,” he said.

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Late yesterday, the southern California company announced its buy of , an AI-driven analytics company for the construction industry. This follows Procore’s July of , a provider of project management software for owners and developers, and its September 2018 acquisition of , a visual BIM (building information modeling) collaboration platform for construction and facilities management.

Founded in 2002, Procore’s cloud-based software is aimed at streamlining a variety of processes for the construction industry, a sector that has historically been slow to adopt technology. Per , “Procore connects people, applications, and devices through a unified platform to help construction professionals manage risk and build quality projects—safely, on time, and within budget.”

Procore, which operates as a SaaS company, has seen impressive growth in recent years. It currently has more than 1,800 employees, up 600 compared to a year ago, across 13 offices globally. Procore has also seen its ARR (annual recurring revenue) surge from under $10 million in 2014 . In December, we reported how the company had tripled its valuation to $3 billion after raising a $75 million Series H from Tiger Global Management.

Yesterday, I talked with Procore Founder and CEO by phone about the company’s M&A strategy, and he told me “this is just the beginning.”

“We have a full-time team of folks evaluating opportunities for us to bring cultures, products and companies into the Procore ecosystem through M&A,” he said. “We have a deep pipeline of companies we’re always looking at, and expect to do at least one more this year.”

In the case of Construction BI, the company’s founder Jason Ramsey had built his product on Procore’s app marketplace in 2017. After hearing nothing but “great things” from its customers who had adopted the technology, Procore made the move to acquire the company and integrate it into its platform.

Overall, M&A has been rampant in the construction tech industry, as we reported in May 2018. Over the years, large tech companies have been scooping up industry-focused startups that were developing relevant technologies faster than they could. These days, we’re just seeingin the space in general, according to Crunchbase data. For example, in June -backed , a provider of design and construction-related services to broadband service providers, announced it had purchased , a specialized civil engineering and construction firm. And, software giant  acquired three startups last year, including its $875 million purchase of and $275 million buy of .

Meanwhile, funding in the space appears to have reached a peak in 2018, and has slowed some this year so far.

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Funding in US-based construction tech startups totals just $196.5 million across 44 deals halfway through 2019. Of course, there are caveats: reported data often undercounts seed and early stage rounds. Furthermore, it takes just a couple of big rounds (likes $865 million Series D last year) to skew those numbers pretty significantly. Still, $192.6 million across 44 deals is still significantly lower than the $1.274 billion raised by US-based construction startups in the first half of 2018.

By comparison, in February, I reported on how funding in U.S.-based construction technology startups had surged by 324 percent to nearly $3.1 billion in 2018 compared with $731 million in 2017, according to Crunchbase data. Of course those numbers were slightly skewed by a number of very large rounds.

So far in 2019, the biggest known round in U.S. construction and building material tech companies is raised by Los Angeles-based , which builds water waste prevention and monitoring tools. Next down the list is Woburn, MA-based , which instead of using traditional blast furnaces utilizes a patented molten oxide electrolysis process to make steel and other metal materials. Given ore and electricity, its process produces pure molten metal, with oxygen bubbles as the only industrial byproduct, according to . Boston Metal raised announced in January. led the deal, in which and also participated.

So, what could be behind the apparent slowdown? Some investors who have invested in the space have a few thoughts.

s  (who invested in Rhumbix) believes that what may be happening is that “while there are a ton of construction tech companies being started, the number of companies that can attract a lot of capital is small in number.”

, managing partner of Colorado-based , is no stranger to the sector. In addition to also investing in Rhumbix, Blackhorn backed software startup , India-based and this year alone. It’s also made several other construction tech investments and “plans to continue investing heavily” in the space, with more deals planned for 2019. According to Zimmerman, Dr. , another Blackhorn partner, is “a construction tech guru” and able to help startups in the space beyond capital.

In general, Zimmerman believes the “white space” in construction tech to build on the infrastructure of the information and communications technology revolution “is profound.”

“Today, foreman and laborers have supercomputers in the form of smartphones in their pockets,” he added. “That’s enabling companies like Rhumbix to bring efficiency gains to construction that other sectors, like manufacturing, were able to access over a decade ago with desktop computers.”

With regard to the drop in funding, Zimmerman, just like us, wonders if 2018 was just “influenced by an unusually large round or two.”

Also, he believes the best is yet to come.

“Anecdotally, we’re seeing many of the most compelling construction tech companies coming to market this year,” Zimmerman told Crunchbase News.

, managing partner of , said his firm has historically focused on data-driven companies and that aspect of Rhumbix’s offerings made it attractive to Tenfore.

He isn’t surprised at the fact that funding is down, citing the “really large investments” that took place in 2018.

“For this reason alone, it’s not surprising that sector growth has appeared to slow down so far in 2019 — it can be attributed to the ebb and flow of specific companies,” Levine added. “However, I think the future holds continued growth for this industry as companies continue to grow and improve through new innovations.”

, partner and co-founder of MetaProp (which invested in Avvir), remains bullish on the space.

“From our perspective, the market is hot. All of the deals are super competitive and we are scratching and clawing to win allocations,” he told Crunchbase News via email.

Recent Deals

, a San Francisco-based startup with a mobile platform designed for the construction craft workforce that we’ve covered in the past, announced the closure of a $14.3 million Series B led by and . And , a New York-based automated construction platform for monitoring and building digitization, announced a $2.5 million seed round led by partner with participation from and .

Rhumbix CEO Zach Scheel said via email that the company, which was launched by two U.S. Navy veterans in 2014, is using the new capital to hire across all departments including sales, engineering, product, and field operations. Rhumbix, he added, has seen year-over-year revenue growth “in excess of 3x the past few years.” According to Scheel, the company is seeing major demand for its “enterprise-grade field tools for tradesmen and women that not only digitize paper and Excel-based workflows, but do so in a way that generates structured data that can be fed into BI tools, project management platforms, ERPs, and other back office software platforms.”

Greylock Partners, , South Park Ventures, and also participated in the Rhumbix financing, which brought the company’s total raised to .

Meanwhile, Avvir says it is using its capital infusion to continue building a “system of reality” for buildings, or “a system of record that connects building plans to built reality and syncs them automatically,” eliminating the need for manual data entry. The goal of its system is to cut down on “rework.”

The Avvir platform uses computer vision algorithms to compare laser scans and photographs captured onsite to a building information model (BIM) and then automatically update it, “effectively creating a digital twin of the site,” according to the company. This digital twin can be used for construction monitoring purposes during the construction project and as a platform for building management once construction is complete.

Whether 2018 funding numbers represented an anomaly remains to be seen. My gut says there’s still plenty of disrupting to be done in this space, and that could be reflected in funding dollars to come.

contributed data analysis and some text to this article. 

Note: This article was updated post-publication with amended funding numbers as well as additional sourcing and information.

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In an exclusive interview, CEO and Co-founder shared some details with me about the company’s history, first external capital and what it plans to do with the cash.

Goodjohn launched the company in May 2017, about a year after selling a similar startup in the space, Canada-based , to publicly-traded . Dvele recently relocated its headquarters from Santa Rosa, Calif. to San Diego, where the company acquired a 75,000 square-foot production foundry.

With its fresh capital, Dvele plans to “aggressively” hire – with plans to boost its headcount from 100 today to more than 240 over the next year. So far, Dvele has built about 125 homes. This year it will shift its focus to a higher-end product.

Like all prefab home builders I’ve talked to, Dvele touts its ability to build homes “faster” as an advantage over traditional home builders. Factory time is about six to 10 weeks, while total construction of a home takes about six months, according to Goodjohn. The offsite building process allows the company to sell its homes for the same prices, regardless of the market.

“So there’s no price inflation based on the area,” he told Crunchbase News.

The majority of homes Dvele builds are in the 2,400-3,400 square foot range and will sell (including cost of land) for about $1.3 million to $1.5 million. The company emphasizes its use of software automation, lean manufacturing techniques and the ability to build “extremely” energy efficient homes with the option to be “net positive.”

Dvele saw a modest $6 million in revenue in 2018 with expectations to more than triple to $20 million in 2019. Eventually, the startup aims to develop software tools to “allow people to design their own homes online,” according to Goodjohn.

In the short term, Dvele plans to use some of its funding to build homes in Ventura and Santa Rosa which were both badly damaged by wildfires. The new homes will go on sites where previous homes were destroyed by the fires and become available for sale this summer at a price point Goodjohn estimates will be lower than other homebuilders will offer, and faster than traditional home construction timelines.

Perhaps the highest profile company that has raised venture money in the space, a segment within the expansive construction tech sector, is Menlo Park-based . The startup has raised since its inception in 2015. It is focused on garden style apartments and other multifamily construction. Of course, there are a number of smaller players in the space, such as Dvele.

Goodjohn likens Dvele’s approach to that of �����ٱ������’s but on a smaller, different scale.

“We are Katerra, but for a much larger market of single-family homes,” he said. “I happen to really like a lot of what Katerra is doing and I think we can help each other finally turn the industry as a whole around.”

Coincidentally, I also caught up today with Executive Chairman . Durham, N.C.-based Prescient is focused on prefab construction as well, but is locked in on multifamily, student housing, market rate apartments, senior living, hotels and armed forces and employee housing. Patel first told me back in October how a powerpoint presentation in 2012 led to 75 patents across 30 countries (and 64 more on file), $195 million in equity funding, a pre-money valuation of $650 million, and a 119 percent compounded annual growth (CAGR) since 2012. Over the past seven years, Prescient has completed 36 buildings for a total of 5.6 million square feet of construction with another 4.7 million under development.

Prescient recently began construction on a 1.3 million square foot student housing project at University of California-Davis that marked the company’s first seismic job and what is being touted as the ever built. The company is reportedly in the process of raising a $100 million round of funding, according to the Wall Street Journal.

Ultimately the players in this space are interesting because they are not only drawing VC interest (naturally, that’s our deal) but also because they are attempting to market themselves as innovative and affordable options – two angles we consider noteworthy.

Historically, the sector has been slow to adopt new technologies, as builders rely on a variety of disparate systems to manage projects, traditional building methods to construct homes, and non-smart materials.

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But a wave of startups is looking to capitalize on opportunities within the sector. Companies that have developed software solutions aimed at streamlining processes and increasing efficiencies are increasingly common. Prefab construction has evolved thanks to innovation in that space and 3D printing technology can create homes in a matter of days.

Investors are taking notice. Funding in US-based construction technology startups surged by 324 percent to nearly $3.1 billion in 2018 compared with $731 million in 2017, according to Crunchbase data. While the 2018 numbers are impressive, it’s important to note that a few large rounds did take place last year and thus skewed the results. One startup alone, Menlo Park-based , brought in $865 million from , , and in a Series D round last January. And, smart glass company closed a in November. Also, , a (unicorn) provider of cloud-based construction management applications, in December raised a $75 million Series H round from .

Without those two rounds, the construction tech sector saw just $1.135 billion in funding in 2018, up a more modest 55 percent over 2017’s totals.

The industry continues to see M&A activity. Larger software companies are recognizing that it makes more sense to acquire companies in this space rather than try to reinvent the wheel from within. For example, in the fourth quarter of last year, 3D design software provider announced plans to acquire two cloud-based software startups in the space: for $875 million and for $275 million. Publicly-traded software developer in July construction management software startup for $1.2 billion.

, partner at , is bullish on the sector and expects 2019 will only see more funding and acquisitions. His firm invested in San Francisco-based , which has raised $28.6 million to grow its mobile platform designed for the construction craft workforce. That company, he says, had a “record year” in terms of customers and users.

“2018 was an inflection point for the construction tech industry,” Chen told Crunchbase News. “Major venture investing and strategic M&A by incumbent players continued… and I think you will see other major enterprise software companies begin to invest more in construction in 2019.”

One construction tech startup founder, of Chicago-based , believes that despite the big numbers, the industry has a way to go in terms of true startup growth. Part of that is simply due to one thing: tech founders and some investors are intimidated by the space.

“A lot of people don’t understand it,” he said. “There’s a massive learning curve. Companies have been building buildings the same way for hundreds of years and not everyone understand its complexities.”

The fact that construction is a largely unregulated industry is also a factor, Carter believes.

“Eventually money will flow into the sector because of the pure size of the market,” he told Crunchbase News. “The money is there. There are VCs at every angle wanting to get into this space but they’re looking for the right opportunities. There just aren’t a ton of startups in the space.”

Construction is also a and one has to wonder if a potential economic downturn would give investors pause. But to Carter, a downturn would only create more need for products like the one his company is working to build. IngeniousIO’s platform uses artificial intelligence to redefine the process of construction projects by creating what Carter describes as “a unifying, data-driven approach.”

“Tighter budgets are where a company like ours can do very well,” he said. “Companies wouldn’t have the overhead of outdated apps that take a significant amount of support to manage, scale and implement.”

The construction sector may not have the cache of other more Twitter-friendly markets, but it does have the sheer size and potential to provide ripe soil for investors willing to break ground on new opportunities.

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