Venture capitalists invested $25bn in engineering and construction technology from 2014 to 2019 – a significant boost on the $8bn of investment in the previous five years – according to a new report from McKinsey.
The growth of VC investment in construction technology has far outstripped the growth of the overall VC sector; indeed, in 2019, VC investment in construction technology grew 15 times faster than the overall VC sector.
The McKinsey report notes that $17bn of the investment in 2014 to 2019 was involved in either M&A activity or private equity investment, strongly suggesting a trend towards consolidation.
McKinsey’s analysis of investment levels by stage of construction reveals that the “construction and commissioning phase continues to be the most active, with twice the investment activity and more active players than other phases; pre-construction and ‘overarching technologies,’ which include advanced technological applications such as AI, robotics, and advanced visualisation, were the next largest”.
McKinsey also found that the AI and advanced analytics sector “has the highest portion of new companies, a trend that we anticipate will develop and continue”.
“Taking the good with the bad, we expect that the continuing Covid-19 pandemic will drive a net acceleration in the use of technology and the construction industry will continue its transformation from a highly complex, fragmented, and project-based industry to a more standardised, consolidated, and integrated one,” the report concluded.
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