Oct 08, 2023

The state of Constru-Tech in Q4 2023

Constru-Tech Crosses $30B in Total Venture Funding

The construction technology (Constru-Tech) sector has now surpassed $30 billion in total venture capital funding raised (even excluding former unicorn Katerra). To give you the context: We barely were at $5B when we started Foundamental almost 6 years ago. This milestone demonstrates the massive growth and momentum behind Constru-Tech startups aiming to transform the traditional construction industry, and is actually consistent with the pattern we noticed a long time ago that between $10B and $50B, sectors accelerate their venture funding growth.

Constru-Tech Expands with Accelerating Growth Since Early 2022, Faster Than Before 2021

Constru-Tech’s growth is accelerating. The last 6 quarters of funding into Constru-Tech, post the crazy VC year of 2021, saw 160% higher funding than the 6 quarters before 2021. Constru-Tech also grew 280% from its pre-2021 quarterly peak to its post-2021 quarterly peak. Moreover, from Q4 2020 to the most recent quarter of Q3 2023, Constru-Tech funding grew 7% vs. the last quarter before 2021.

While the Total Venture Market Shrinks Over Same Time

Unlike Constru-Tech, the overall venture capital market has contracted recently. Total VC funding decreased 11% from its quarterly peak in the 6 quarters before and after 2021. And from Q4 2020 to Q3 2023, total VC funding declined 36% even as Constru-Tech dramatically expanded.

The Contribution of Constru-Tech to Total Venture Has Increased 3x

Constru-Tech’s share of total venture funding has jumped 3-fold from pre-2021 levels to post-2021. Constru-Tech is claiming an ever-larger portion of the venture pie.

Constru-Tech’s Round Sizes Grow 28% YoY, While Total Venture Round Sizes Are Down -2% YoY

The upward trajectory in Constru-Tech is further evidenced by round sizes. The median funding raised per Constru-Tech venture round has grown 28% year-over-year, whereas median round sizes for overall venture are down 2% over the same period.

17 Constru-Techs Reached Unicorn Status So Far – More to Come

At least 17 Constru-Tech startups have already attained unicorn valuations of $1 billion or more. And given the sector’s momentum, many more are likely to follow suit.

My Numbers Are Open-Source and You Can Find Them Here

The data and analysis behind these findings are open-source. You can access the full spreadsheet documenting Constru-Tech’s rise here. Constru-Tech’s exponential growth shows no signs of slowing down. In my opinion, the future looks bright for startups aiming to revolutionize construction through technology, and Constru-Tech is proving to be one of the hottest sectors in venture in general now and for years to come.