When we started Foundamental in 2018, the amount of aggregate VC funding in Construction-tech across the globe stood at ~ $4.5 Billion, a tiny sliver that represented only about 0.15% of the Global VC funding between 2010 and 2018.
Of the 359 VC-funded Unicorns at the time, even when allowing for a broader definition of what constitutes a “Unicorn”, only 5 were Construction-tech firms:
Katerra (US)
Procore (US)
Houzz (US/Israel)
To8to (China)
Aconex (Australia)
Fast-forward to today (January 2024), and the cumulative VC funding in Construction-tech today has expanded 14x to approximately $30 Billion and the number of Construction-tech unicorns has increased to 16, brilliantly analyzed by my Partner Patric in October 2023 ( The count of unicorns has decreased from 17 to 16 as a result of Veev reportedly shutting down in November 2023).
While we have been celebrating the growth in VC-funding and Unicorn-creation in Construction-tech (and strongly believe that the space is only just getting started all across the globe), looking at the countries from which these Unicorns originated reveals a fascinating trend.
Breaking down the 16 Unicorns by country :
US: 6 (3 in 2018)
India: 5 (0 in 2018)
China: 2 (1 in 2018)
Australia: 2 (1 in 2018)
France: 1 (0 in 2018)
Did that geographic breakdown surprise you ?
Incredibly, India is now not only a close second, just behind the US, in terms of the number of Unicorns in Construction-tech (5 from India vs 6 from the US), but has clearly outpaced the US in terms of creation of net-new unicorns in the last 5-6 years (5 in India vs 3 in the US).
[Australia is also a hidden Champion in Construction-tech, always punching above its weight – But that's a topic for a different post]
I must admit that in spite of all of my bullishness on the long-term prospects of the Construction-tech ecosystem in India, the starkness of these data points and their implications took me by surprise. After all, I (just like nearly every other VC professional) have been conditioned to believe (for good reason, especially because of precedent) that the US leads
For those of you who are invested in India, or have been following the market, you are perhaps aware of the increasingly positive sentiment about the Emerging market that seems to have finally Emerged in response to the potential it always promised.
Predictions and proclamations along the lines of “It’s not India’s decade, it’s India’s century” or that India is ”the “perfect” emerging market” have become more frequent and more positive than ever before.
Is this excitement based on substance and fundamentals, or might it be the foreshadowing of a new bubble ?
To form a perspective that might help answer this question, I decided to dig into publicly available information on the 5 VC-backed Construction-tech unicorns from India and take a look at how the Indian companies we at Foundamental have invested in, performed so far.
First, from the 5 Indian Construction-tech unicorns :
Of the 5 Unicorns (Infra.Market, OfBusiness, Zetwerk, LivSpace, Moglix), we are privileged to be early backers of Infra.Market and (before we started Foundamental) the first investor in Zetwerk;
3 of these firms currently operate at a scale exceeding $1Billion in annualized revenue / GMV – Infra.Market , OfBusiness and Zetwerk;
At least 2 of these unicorns are net profitable (i.e. they have positive Net Income / Profit After Tax) – Infra.Market and OfBusiness.
Forming an initial hypothesis based on a 30,000 feet view, the first 5 Construction-tech unicorns from India appear to represent a very solid cohort of companies, demonstrating the scale and profitability that leads to rewarding venture-backed outcomes.
Turning now to the portfolio of 15 companies that we at Foundamental have so far invested in (Most of which currently represent a holding period of less than 2 years) :
4 firms operate at a scale of >$100Million in annualized revenue / GMV;
5 firms are either net profitable or have had multiple net profitable months;
7 firms (also) serve markets outside of India.
Even with all of the conservatism from 2023 carrying over into the beginning of 2024, and with the standard industry caveat that the feedback cycle of a successful VC fund takes 5-10 years to fully manifest, we have to admit that we are excited about how our Indian portfolio has shaped up thus far and are eager to back more category leaders rewriting the rules in India.
This is just the first of a series of posts on our observations and experiences as a Global Construction-tech VC doubling down on India.