Construction tech is looking to disrupt an industry that's been notoriously slow to embrace change — insiders say these are the 10 contech startups to watch in 2020

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• Construction labor costs continue to increase and construction productivity has been flat for decades. These forces have created demand for cheaper construction, leading to the application of new tech like machine learning, robotics, 3D-imaging, and drones. 
• While the sector hasn’t seen nearly as much attention as fintech or its cousin, proptech, it has received $27 billion in funding since 2008, according to McKinsey partner Jose Luis Blanco. There are two contech unicorns —  Procore and Katerra. 
• We’ve polled construction tech experts, VCs, and analysts to create a list of 10 of the hottest contech startups to watch in 2020.  
• Read more BI Prime stories here.

With proptech funding booming and experts predicting that housing prices will continue to rise in the 2020s, a new slew of construction technology — or contech, for short — startups have emerged that are aiming to make building cheaper, easier, and safer. 

Construction labor costs continue to increase and construction productivity has been flat for decades. These forces have fueled demand for cheaper construction, leading to the application of new technologies like machine learning, robotics, 3D-imaging, and drones. 

While the sector hasn’t received nearly as much attention as fintech or its cousin, proptech, it has received $27 billion in funding since 2008, according to McKinsey Partner Jose Luis Blanco. He noted that much of the funding has come from M&A, though that is beginning to change. 

“Since 2015 — a peak year for VC investments — construction tech space has been able to sustain a relatively high level of investment from VCs,” Blanco wrote Business Insider. 

This VC backing has minted two unicorns in the space.

Katerra, a SoftBank-backed modular construction company, has raised $1.2 billion and reports value it as high as $4 billion. But the tail-end of 2019 was bumpy for the company. Katerra’s cofounder, Fritz Wolff, left as the company pulled out of six projects, closed a factory, and laid off more than 100 people, according to a report from The Information.

Procore, a construction management software startup, has raised $304 million. Crunchbase reported that the company is considering an IPO that might value it at more than $4 billion.

While Procore and Katerra get the most attention, they’re far from the only players in the field. We’ve polled a list of construction tech experts, VCs, and analysts to create a list of ten of the hottest construction tech startups (in no particular order). 

Rabbet is a construction finance platform that brings paper forms online.

Rabbet, founded in 2017, is a software startup that aims to bring the highly manual process of construction finance online. The company has raised $8.1 million in total funding from backers as diverse as Goldman Sachs, proptech fund Camber Creek, incubator Y Combinator, and financial services fund QED Investors. 

Rabbet’s software uses machine learning to analyze documents, allowing information to be digitally shared and used across banks, developers, and contractors. Goldman Sachs’ own construction group uses the software, according to Rabbet’s CEO. 

Built Robotics is a manufacturer of tools that make construction vehicles autonomous.

Built Robotics, founded in 2016, manufactures equipment that turns normal construction vehicles into autonomous vehicles. It has raised a total of $48 million.

The company’s most recent funding round was led by Next47, Siemen’s venture capital arm, and included funds from proptech fund Fifth Wall, NEA, and Founders Fund. 

Built Robotics sells and installs conversion tools to construction companies, and then charges the company a fee every time the autonomous mode is used. The equipment uses lidar, sensors, and cameras to make sure the machine is aware of its environment. 

Avvir creates a digital twin of construction in real-time.

Avvir, a company that’s created building information modeling software, was founded in 2017. The software uses laser scans and machine learning to notice mistakes in construction, automatically update a digital model of the building with any changes, and to monitor progress.

Avvir is in pilot with Facebook, ExxonMobil, Goldman Sachs and the New York City Economic Development Corporation. 

The startup has raised $2.5 million in seed funding in a round led by Khosla Ventures that included proptech VC MetaProp.

Rhumbix brings paperwork to a mobile platform, connecting construction workers directly with other stakeholders.

Rhumbix, founded in 2014, is a mobile platform that connects construction workers directly with administrators and project stakeholders. The app brings paper workflows to a worker’s mobile device, allowing for real-time communication and data collection about material usage and labor productivity. 

Rhumbix has raised $34.9 million in funding to date. Its most recent round, a $14.3 million round this July, was led by Blackhorn Ventures, a VC that invests in industrial companies, and Tenfore holdings. The company has also received funding from Greylock Partners and contech venture fund Brick & Mortar Ventures. 

Openspace uses hard hat-mounted cameras to create a real-time 360 degree map of a worksite.

Openspace, founded in 2017, uses helmet-mounted cameras and software to stitch together 3D renderings of work sites for contractors and developers alike. The company has raised $17.5 million in funding. 

Its most recent round, a $14 million seed round, was led by Lux Capital, and included funding from Tishman Speyer, JLL’s venture arm, Suffolk Construction, proptech fund Navitas Capital, and WeWork.

WeWork, JLL, Tishman Speyer, and Suffolk Construction were all customers before the funding.

Plant Prefab makes prefabricated buildings with an emphasis on sustainability.

Plant Prefab, founded in 2015, builds sustainable prefabricated homes. The company closed a $6.7 million round led by Amazon’s Alexa Fund earlier this year. It had previously raised a $3 million seed round that included funding from ex-Twitter CEO Ev William’s Obvious Ventures, which is also one of the largest stakeholders in Beyond Meat. 

The company recently launched a line of scalable small homes to provide housing quickly after last year’s Woolsey Fire in Southern California. The combination of sustainable building and a collection of homes created for disaster response are extra-timely as 14.6 million acres of Australia has burned in the ongoing bushfires. 

Factory OS is one of the largest modular housing manufacturers, with two warehouses in the Bay Area.

Factory OS, founded in 2017, is a modular residential construction company that builds multi-family homes in their two factories in the San Francisco Bay Area.

Founded by Bay Area developer Rick Holliday, the company announced an undisclosed fundraise earlier this year from AutoCAD creator Autodesk and Citigroup’s Spread Products Investment Technologies initiative and its affordable housing branch, Citi Community Capital. 

Factory OS builds multifamily buildings in its factory using an assembly line. Similar to Plant Prefab, the company is planning to build a Rapid Response Factory that will respond to natural disasters.

Google placed Factory OS’s first order in 2017 for 300 homes for their employees. 

Branch Technology has created the world’s largest freeform 3D printer and is using it to build homes.

Branch Technology, founded in 2014, is a 3D printing company that is developing technology to create fully 3D printed structures.

So far, it has created the world’s largest freeform 3D printer and the world’s largest 3D printed structure. Instead of typical 3D printing, which is created by printing layers and layers of material, Branch’s printer creates a lattice-like structure that is then filled with an expandable foam. 

The company is in the process of building Curve Appeal, which it claims will be the first freeform 3D printed home. Branch has raised $7.2 million since its founding. The most recent round was led by MetaProp. 

Spacemaker has created design and construction simulation software that studies how different designs fit into the environment.

Spacemaker was founded in 2016 in Norway. The company’s flagship product is an AI simulation tool that creates and analyzes thousands of potential developments on one site. The software analyzes the surrounding landscape, local regulations, and demographic data to simulate how different potential designs would impact the environment and the future occupants of the space. 

Spacemaker raised $25 million this year in a Series A round led by European investor Atomico and included funds from British proptech fund Round Hill Ventures and Nordic property developer OBOS.

Mighty Buildings is a stealth-mode startup that has attracted big dollars to lower construction costs with 3D printing.

There isn’t much information about Might Buildings, but the experts we spoke with confirmed that there is a lot of hype.

The company’s website only contains a form to enter its Beta Program, though Khosla Venture’s website contains the following description: Mighty Buildings is a YC (W’18) stealth-mode startup, working on a disruption of the construction industry with 3D printing tech and composite materials.

The company’s SEC-D forms show that the company has raised roughly $33 million so far, with Crunchbase recording a variety of investors, including Khosla Ventures and Y Combinator.

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