Some significant players on Wall Street, including Goldman Sachs, are putting more of their cash into startups that aim to boost automation in the construction industry.
Venture investment in private construction-technology companies leaped to $6.1 billion in 2018, from $352.1 million in 2016, according to research company CREtech. With $4.3 billion invested as of late June, 2019 is on track to be another record year.
Investment-banking giant Goldman Sachs is one of the most active investors, participating in funding rounds for at least five construction startups since last fall. The bank says these investment decisions were made independently by different divisions.
In April, Goldman invested £75 million ($95 million) in the British modular-home maker TopHat. The bank this year also participated in a $33 million funding round forPro.com, a marketplace for contractors, and led a $34 million funding round for Built Technologies, which sells an online tool for lenders to manage construction loans.
“I think that folks have realized how large the construction industry is and that there are extraordinary gains to be had from leveraging technology,” said Michael Berolzheimer, founder and partner at venture investment firm Bee Partners.
Of course, the industry has been slower than most to adopt various technologies and no investment is a completely safe bet. But it is something to keep an eye on. Remember, what happens in the stock market doesn’t necessarily reflect the broader economy as it exists today but instead is an indication of where investors think the economy is headed.
