Foundamental closes $85 million fund to invest in early-stage construction tech startups
Early this year, we wrote about two tech startups that raised over $180 million in combined funding to scale their operations. The first is Tül, a Colombian tech startup that sells construction materials to small-sized retailers. The other is Estonia-based Werk raises $1.3M Pre-Seed for the first hiring and relocation platform for skilled migrant construction workers.
What do these startups have in common? They were both funded by Foundamental, a German VC firm and a global investor in construction tech companies. Foundamental is backed by some of the world’s largest construction and materials companies.
As we reported before, the global construction industry is expected to reach an estimated $10.5 trillion by 2023. However, the industry is plagued with inefficiency and often accused of failing to move with the times and ignoring digitization in favor of legacy tools. For example, there are millions of small and medium-sized construction businesses in Europe and the Americas, all of whom face universal challenges in terms of performance, administration, and deadlines.
Most of these businesses are still largely under-digitized or deploy fragmented software for specific tasks. This presents an enormous productivity increase potential for the industry, measured at $1.6 trillion, leaving room for hundreds of construction tech startups driving the change to help modernize the construction industry. It’s against this backdrop that Foundamental decided to invest in early-stage construction tech startups to disrupt the sector.
Today, Foundamental announced it has closed an $85 million fund to invest in early-stage construction tech startups. The latest fund builds on the success of its inaugural $65 million fund closed back in 2019. The firm will use the new capital infusion to double down its investment in emerging regions like Latin America while focusing on “historically neglected verticals.”
Founded in 2018 by founding partners Patric Hellermann, Adam Zobler, and Shub Bhattacharya, the Berlin, Germany-based Foundamental is a global investor in construction, renovation, and design technology. The firm backs ambitious startup founders across the Americas, Asia-Pacific, and Europe from inception to IPO.
Each of Foundamental’s partners focused on distinct geographic regions. Adam Zobler covers North America. Shub Bhattacharya targets Asia-Pacific (APAC), while Patric Hellermann covers Europe.
Foundamental currently manages millions of dollars across its early-stage funds and is an early investor in several category leaders in construction-technology and design-technology, including Infra.Market, Tul, Welcome Homes, Mighty Buildings, Wiz, and Speckle. Its portfolio of companies has a combined valuation of $5.88 billion across 91 investments, according to its website. The firm has also raised a total of $1.21 in funding.
In a statement, Zobler said: “Construction is the biggest, undisrupted market in the world. It’s a 12 trillion-dollar market — 10% of the world’s GDP — which employs one in fourteen workers globally. Yet the construction and built-world industry is massively inefficient, and it’s getting worse.”
Zobler added: “The time to invest is now. Technology that fundamentally reshapes the world of construction and the built environment is needed now more than ever — and it can drive great returns — but is currently underserved and underfunded.”