Construction’s digital revolution

The $12 trillion architecture, engineering, and construction (AEC) industry has been among the slowest to digitize and innovate. Now, however, digital adoption in the sector is being accelerated by strong demand for infrastructure, a shortage of skilled labor, and increased stakeholder pressure for data transparency and integration. Senior partners Jose Luis Blanco, Aditya Sanghvi, and colleagues say late-stage venture capital in AEC tech investment reached $11.5 billion between 2020 and 2022, more than triple the level of the previous three years.

Funding sources for architecture, engineering, and construction tech are evolving, with late-stage venture capital investors gaining prominence.

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A series of 3 line graphs, with 6 lines on each, show different metrics on changes in funding for architecture, engineering, and construction technology. The line metric shows the change in number of deals, funding in billions of dollars, and average deal size in millions of dollars for 2017–19 and 2020–22. The 6 funding sources studied are late-stage venture capital, angel and seed, early-stage venture capital, private equity, M&A, and IPO. The major changes apparent are a jump of almost double for late-stage venture capital in number of deals, a jump upward in funding value in M&A and late-stage venture capital, and a significant increase in average deal size for IPOs.

Source: PitchBook, November 15, 2022.

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To read the article, see “From start-up to scale-up: Accelerating growth in construction technology,” May 3, 2023.