Boston VC firm wants to take the waste out of building trades
Walk by any construction site, large or small, and you’re sure to see a dumpster full of scraps, mistakes, and packaging material. About 40 percent of all waste in US landfills comes from construction sites.
Better technology, particularly in software and construction techniques, could make a big difference, according to Travis Connors, cofounder and general partner at Boston VC firm Building Ventures.
“At the end of building your car, you don’t have a bunch of scrap metal and rubber and plastic sitting outside the factory,” Connors said. “We know the geometry of every wall for every building before it goes up. There’s no reason for this amount of wastefulness, if we had coordination and decisions were made better and earlier in the process.”
Building Ventures focuses on funding startups that can improve sustainability in construction and real estate. The five-year-old firm just raised $95 million for its second investment fund.
Connors and his cofounder, Jesse Devitte, originally didn’t think they could attract enough interest from investors until a couple of major deals from Japanese firm SoftBank garnered headlines. SoftBank plowed billions into construction-tech startup Katerra and office-space firm WeWork. Both deals ultimately flopped for SoftBank but still sent a message.
“They did wake people up to the idea that there could be different models,” Connors said. “We thought there had been an inflection point where the industry could no longer ignore the opportunity to take advantage of technological innovation.”
Building Ventures is hardly alone in spotting the opportunity. Venture capital firms invested $13 billion in real estate and construction startups, a sector known as proptech, in the first half of the year, up 6 percent from 2021, according to the Center for Real Estate Technology & Innovation.
“The biggest opportunity ahead for proptech companies and entrepreneurs is retrofitting aging infrastructure and legacy buildings,” Ashkan Zandieh, co-chair of the center, said.
The push is coming from large property owners such as pension and endowment funds that want to help the environment by improving their properties, he said. “We anticipate hardware and software-enabled tech solutions to increase as institutional and large real estate organizations race to decarbonize their assets,” Zandieh said.
Building Ventures has invested in several local startups. Newmetrix in Cambridge is using AI to reduce waste and accidents on construction sites. And EnVerid in Westwood is developing HVAC technology to produce cleaner indoor air using less energy.
The massive tumble in tech stocks and venture capital funding this year has not hugely affected the proptech sector, which didn’t have as many overvalued startups as other areas, Connors said.
“The shakeout means that a lot of the tourists and opportunists left the market, but those founders who see a problem that they really want to solve are still around,” he said. “So we’ve not really seen a slowdown. If anything, we’ve just seen more quality in the companies that we’re looking at and less froth.”
Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him on Twitter @ampressman.
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