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Construction technology investment and overall mergers and acquisitions (M&A) activity are stronger than ever. Strategic acquirers remain very active, and companies like Procore are continuing the M&A push to broaden solution offerings and provide more technology-enabled options for customers.
As technologies mature, private equity and venture capital dollars make more financial sense in the space as well. In 2019, for example, Brick and Mortar Ventures announced a $97 million fund that’s backed by several big names in the construction industry. At the same time, underlying market dynamics that serve as key investment drivers are continuing to present challenges for the industry. A shortage of quality labor, along with rising labor costs, presents major hurdles that can be addressed by improving construction technology.
Concurrently, we continue to see minimal change in construction productivity, although business owners are now looking to technology to finally move that needle. The problem is that construction executives still have a long way to go in their efforts to develop a coherent technology strategy. Siloed project sites and a lack of technology training for key project managers mean that significant structural changes are still necessary to make tech adoption a success.
With more approved budgetary dollars going toward construction tech, it will be important to monitor those investments in order to see where true value can be acquired.