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Exclusive: Construction tech deals up, total down

Illustration of a pair of hands laying down bricks made of hundred dollar bills. 

Illustration: Aïda Amer/Axios

Global investors did more deals backing construction tech startups last year but invested fewer overall dollars, according to a new report that the VC arm of building giant Cemex shared with Axios.

Why it matters: While construction tech is a tiny slice of the overall VC pie, interest is growing, and it represents an emerging financial and climate opportunity.

Details: Cemex Ventures says there were 236 deals, up 3.5% from 2022, for construction tech startups, which include sectors like greener building materials and using digital tools for enhanced productivity and new construction methodologies.

  • Overall total funding for construction tech companies last year, at $3.03 billion, dropped 44% from 2022, mirroring the decline of overall VC funding across sectors. It declined less than overall VC funding last year, and construction tech's share of overall VC grew.
  • In particular, there were more early-stage construction tech investments at the seed and Series A round, compared with 2022.
  • Some of the biggest construction tech deals of the year included $262 million for green steel company Boston Metal, $52 million for 3D printing and modular home startup Mighty Buildings and $80 million for CarbonCure, which makes concrete using recycled CO2.

What they're saying: "Investors still have faith in the vertical and are still willing to take certain risks," said Gonzalo Galindo, head of Cemex Ventures.

  • Cemex Ventures invests off the balance sheet of Mexican construction giant Cemex, and the group has done 23 investments to date.

Thought bubble: There's major potential for the decarbonization of the construction sector by using new low-carbon building materials and more efficient and circular processes.

  • Investors are rushing to fund certain hot sectors like green steel, while other verticals are still under the radar.
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