We released the 2016 edition of Opportunities In Vertical Software last week which laid out our point of view on ten specific verticals and the potential for various software solutions to dominate each of these ten verticals in the coming years. As discussed in our prior post, for the next ten weeks we will release content focused around the impact of software on these ten industries. For our inaugural week, we continue with the Construction vertical and follow up with an analysis of Construction market themes, players, & investors.
Construction Market Themes:
(1) Construction Starts Are Rising – Among Construction Market Themes is that there has been notable expansion in the construction industry, the Dodge Outlook Report predicts that total U.S. construction starts for 2016 will rise 6% to $712 billion, following gains of 9% in 2014 and 13% in 2015. This provides opportunities for entrepreneurs looking to venture into construction as technology will consistently expand alongside a widening industry. This will also lead to a further rise in prevalence of BIM technologies. Construction SaaS solutions are no longer a “nice-to-have” as collaboration across a growing number of sites becomes a necessity. Even for functions as simple as documentation, BIM provides tangible benefits, and will begin to be adopted as a requirement.
(2) Mobile and Cloud Technology Will Keep Expanding – The use of mobile technology and cloud-based software, alongside the need for mobile applications to integrate with office software will continue to grow. Information sharing is becoming increasingly dependent on mobile solutions. Mobile integrations allow for reduced costs by empowering job site documentation and faster responses to questions and issues. Things like onsite pictures and quality checks can further contribute to the fluidity of work. SaaS platforms that enable this type of collaboration have already begun to take root, and are expanding the capabilities of construction project managers.
(3) New Business Models Beyond Mobile Will Disrupt the Construction Industry – Data-driven design through Building Information Modeling (BIM), combined with augmented reality (AR) will allow for new ways to visualize and map construction projects. Technologies like drones will add to this by helping to analyze and track progress on construction sites with new ways to capture and source field data. This will require data analytics software that provides insights for contractors to boost productivity. All of this will result in an increase in construction site safety as automation and improved analytics puts less people in harm’s way. It will also allow sites to be better planned and managed, with superior modeling and less unexpected failure and delay.
Construction Industry Major Players:
AutoDesk is perhaps one of the best-known public BIM providers with solutions ranging across multiple use cases and revenues north of $2 billion. PTC, Siemens, and Dassault join Autodesk as PLM/BIM companies above $1 billion in revenue. In a neighboring industry vertical, Sage commands a significant presence for its construction management software alongside Oracle and Trimble, which also offer project management solutions for the constructions space.
Construction Industry Emerging Players:
We’ve seen emerging technology players in the construction space gain momentum over the last few years. To highlight a few, Rhumbix, a company that provides construction field supervision with a robust mobile platform, and Flux, the cloud-based collaboration service that allows contractors, engineers and architects to add helpful plugins into their existing work flows and saves them crucial time in simplifying file transfer, data conversion, and data-merge. Equally worth noting on the project management front is PlanGrid, a more well-known company that helps contractors, owners, and architects collaborate easily from their mobile devices and desktop, managing blueprints, specs, photos, RFIs, and punch lists. Another interesting company, innovating outside of construction management, is Building Connected, which provides builders with cloud-based bid procurement services.
Most Active Investors Focused On Construction Technology:
There are several prevalent investors that we see across many of the prominent construction technology raises covered in our report including firms like Brick and Mortar Ventures, Obvious Ventures, and Andreessen Horowitz. Accelerators like 500 startups and GritLabs also make appearances under several notable companies. Historically names like Y Combinator, Business Growth Fund, Praesidian Capital, and Infuse Ventures have topped the charts alongside others for most active in the construction space. Many of these continue to be active today, and are an important source of capital for the industry.
Construction Market Themes Link Roundup For Emerging Software Founders:
CB Insights: https://www.cbinsights.com
Thank you for reading our analysis on Construction Market Themes, Players, & Investors. Make sure to check out the 2016 edition of Opportunities In Vertical Software for the full report and we will be back next week with our next series of industry deep dives.
Below we have compiled a list of metrics that could be relevant for most B2B marketplaces and hope that it serves as a framework for tracking KPIs for success.