An office built in a shipping container
Investment in the sector totaled $6.1 billion last year, nearly double what was invested in 2017 and a 1,632 percent increase from the $352.1 million invested in 2016, according to the Wall Street Journal.
So far this year, around $4.3 billion has been invested in construction tech, putting 2019 on pace to break last year’s record.
Goldman Sachs is a leader in the trend and invested into at least five firms this year, including a $95 million investment into the British modular housing firm TopHat. It also led a $34 million round of fundraising for Built Technologies, which sells a platform for lenders to track construction loans.
Some see modular construction technologies and other labor-saving advances as good bets because of the nation’s shortage in skilled construction labor. A 2017 survey found one-third of contractors nationwide have turned down work because they don’t have the labor.
Modular construction — in which parts of a building are built off site for on-site assembly — is seeing endorsements by builders too. The Chun family recently secured funding to build a modular AC by Marriot hotel in Manhattan. It’s billed as the tallest modular hotel in the world.
Investors are also attracted by big payouts secured by other investors when companies they bet on were bought out. Michael Berolzheimer, founder of investment firm Bee Partners, told the Journal that he netted seven times his investment when software maker Autodesk acquired a company he invested in. [WSJ] – Dennis Lynch