Brick & Mortar fund raises $97 mln to make construction tech-savvy

OBAYASHI

13/08/2019 17:00

By Herbert Lash
    NEW YORK, Aug 13 (Reuters) - Brick & Mortar Ventures, a
venture capital fund founded by a scion of family-run Bechtel
Corp, said on Tuesday it had raised $97.2 million from leading
construction-related companies as builders turn to 3D printing
and other software to cut costs and boost productivity.
    San Francisco-based Brick & Mortar initially raised $50
million in late 2017 and the remainder in January to invest in
construction, an industry that was slow to embrace technology.
The fund is one of the first to try to digitize construction.
    Recent deals and valuations surpassing $1 billion, led by
Oracle's acquisition of Australian construction management
software provider Aconex Ltd for $1.2 billion in 2017 made
investors take note of building-related technology start-ups.
    "There's now a sense of urgency," Darren Bechtel, founder of
Brick & Mortar, said in an interview. 
    "All of a sudden, the investor market is waking up," said
Bechtel, whose brother Brendan is chairman and chief executive
of Bechtel, one of the world's largest engineering, construction
and project management firms. 
    The company has not invested in Brick & Mortar. The fund,
Brick & Mortar Ventures I LP, its investments and limited
partners, were formally announced Tuesday. 
    Other investors include software maker Autodesk Inc
 ADSK.O ; Mexican cement company Cemex SAB de CV  CEMEXCPO.MX ;
Sidewalk Labs, an Alphabet company  GOOGL.O ; and Obayashi Corp
 1802.T , a leading Japanese construction company, among others.
   
    Two other deals involving construction-related software last
year proved Aconex was not a one-off. 
    Trimble  TRMB.O  acquired Viewpoint for $1.2 billion in
April 2018. Then last November Autodesk paid $875 million for
PlanGrid, which had been Bechtel's first investment in
building-focused technology back in 2012, when he took part in a
$1.1 million seed round of funding, according to Crunchbase.
    Big efficiency gains can occur in labor productivity if a
company can figure out how to increase time dedicated to work or
reduce the number of people out in the field, where 40% to 60%
of a project's cost can be labor, Bechtel said.
    Resolving the high amount of construction material that is
wasted also is ripe for innovation. Some 40% to 50% of the
world's solid waste is estimated to be construction materials.
    Branch Technologies, a portfolio company, is introducing new
ways of construction through 3D printing, which limits waste as
only the amount of material needed is used. The days of cutting
lumber down to size and discarding the pieces may be over.

 (Reporting by Herbert Lash
Editing by Nick Zieminski)
 ((herb.lash@thomsonreuters.com; 1-646-223-6019; Reuters
Messaging: herb.lash.reuters.com@reuters.net))