In this conversation, we explore the distinction between construction tech and prop tech, with a focus on the former. Construction tech is a project-based business that optimizes supply chains, while prop-tech is an operations-based business that focuses on real estate transactions and utilization. The conversation delves into:
- The different segments within construction tech, including architecture, engineering, construction, and supply chain technology.
- The importance of outcome-based business models.
- The role of AI and data infrastructure in the construction industry.
The conversation concludes with an analysis of the funding trajectory of construct tech and its potential for future growth. Andreas and Patric examine the waves of technology in the construction industry and the importance of data connectivity and harmonization. They also touch on the challenges of pre-manufactured housing and the fallacies in VC fund strategies. Patric shares insights on their fund model, which is vertically dedicated, global, and focused on early-stage investments. They prioritize preempting follow-on rounds and emphasize the importance of staying involved and not delegating decision-making. Patric also offers advice to young people in the industry, including thinking from a DPI perspective and finding differentiation.
About the guest.Patric Hellermann, the Founding General Partner of
Foundamental, an $84M EUR venture capital fund focusing on construction technology, with $100M EUR Fund III just launched.
About the firm.Foundamental is led by three GPs, 1 in the US, 1 in Europe, and 1 in Pacific Asia. They are investing in AEC-Tech: 3D-design, Construction, Renovation, Supply Chain & Logistics, and Blue-Collar Work, starting from day zero up to Series A.
Portoflio highlights count
Infra.Market (Series A),
Enter (pre-seed),
Speckle (pre-seed),
Rayon (pre-seed),
Metalbook (pre-seed),
SafeAI (seed), and
Wizfreight (seed).
Key facts include a 94% follow-on rate among Fund-1 companies, the vast majority of which they invested at seed, top-decile returns in both funds, incl. top-decile DPI (Fund-2 actually top 3-5% currently), circa 10 portfolio companies have achieved net-profitability.
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Chapters:00:03 Meet Patric Hellemann and Foundamental
00:32 ConstructTech Explained
03:40 PropTech vs. ConstructTech
05:40 AECS: Architecture, Engineering, Construction, and Supply Chain
06:58 Robotics in Construction
08:51 Challenges and Opportunities in Construct Tech
19:33 Data Infrastructure and AI in AECS
33:07 Market Trends and Investment Insights
41:06 Automating Data Connectivity
42:59 The Second and Third Waves of Data Integration
43:22 Consolidation in the Infrastructure Sector
45:00 Challenges in Construction Robotics
46:21 Onsite vs. Offsite Construction
47:04 Automating Bricklaying
48:36 VC Fallacies and Sector-Specific Insights
01:13:05 Personal Productivity and Fund Strategy
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