Disrupting the disruptors: How the Construction sector is opening Corporate Venturing eyes.

If you’re in it, you’d know what we’re talking about. The Construction industry – pragmatic and, at times, traditional, is under radical disruption and the Internet of Things is connecting the sector, and its players, like never before. The connection between everyday devices and building practice, and the internet, is now becoming more and more common. The application of smart-tech in buildings, machinery and even construction materials is quickly transforming the property and construction worlds, into a hot topic – which is why investors are sitting up and taking notice.

In a previous blog, we featured FastBrick Robotics in our Focus on Friday article. What they are doing is revolutionising the way we build – turning the process from a 9-5, into a 24/7 activity. And they do that through robotics and automation, calling their solution the Hadrian X.

According to research conducted by CB Insights, investment into this sector is at an all-time high too. Investment into construction tech – through accelerators, and corporate venture capital, has grown by a whopping 169% since 2012. Although the overall number of investors currently remains small, the trend into a digital explosion in the sector has made investors become acutely aware of the opportunity that exists within SMEs who are looking at new ways of delivering better, on time, ahead of time, and more effectively.

 

A Corporate Investor with Insight

The involvement of corporate investment remains conservatively small in comparison with other sector investments – but that’s not to say it’s not happening.  Take a look at one such investor; Brick and Mortar Ventures. Their entire mission reads: “The mission is simple: Identify, invest in, and grow emerging companies developing innovative software and hardware solutions for the industries of architecture, engineering, construction, and facilities management.” If that’s not an organisation that is built on spotting talent, development and potential within a sector, then we hang our hats on the hook.

Here’s how they see the market, and the opportunity that lurks. “The $8.5T global construction market is expected to grow to $15.5T worldwide by 2030, yet the industry has been late to the game to adopt new technologies to improve project delivery and process management. With IT expenses hovering around 1% of gross revenue, construction holds last place in the rankings of IT spend by global economic sector. Fierce competition between firms to win future bids, necessity to reduce operating expenses in response to shrinking margins, and challenges in recruiting and retaining young talent are forcing the industry to innovate.”

 

Disrupting the Dominators

Technology and Pharma have, for the longest time, dominated the Corporate Venturing market. But more recently, industries that traditionally had little, or no, involvement in the space, are starting to join the game. According to data provided by the Boston Consulting Group, the construction industry has traditionally been among those who have not relied on corporate venture investment to drive growth. In recent years, however, they (along with other traditional industries) have come under more and more pressure to innovate in response to demands for cleaner technology, more sustainable operations and a better user experience. The result is that they are looking beyond internal R&D toward other innovation channels – and that’s where corporate venturing has been the driving factor for many of the larger construction businesses.

 

Following last week’s hugely successful Construction Week expo held in Birmingham, a clear agenda that focusses on the new, the innovative, the future, was very evident with core areas like The Future of Construction Hub, the Innovation Trail and The Digital Construction Hub taking their rightful place at the event. Seeking out to showcase the UK’s developing technology-driven construction industry, there is no doubt that this is one industry to keep an eye on. And Oracle is already on the money – having spent nearly $2bn building up its project management and payment platforms to target the construction industry specifically. And if you’re wondering how the disruptors are disrupting, then you may want to check out some of these innovations – which include anything from self-heating concrete to kinetic roads and asset mapping.

 


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2018-10-17T11:30:16+00:00October 17th, 2018|Corporate Venturing, News|Comments Off on Disrupting the disruptors: How the Construction sector is opening Corporate Venturing eyes.