A venture capital firm led by a scion of one of the world’s largest construction companies has launched a $100 million fund to invest in construction tech.
The fund, launched by San Francisco-based Brick & Mortar Ventures, is the largest to focus exclusively on construction-technology startups, and will target seed and Series A funding rounds, the firm said Tuesday.
Led by Darren Bechtel, Brick & Mortar Ventures raised $97.2 million from a dozen limited partners, including Autodesk, CEMEX, Ferguson Ventures, FMI, Hilti, Obayashi and Sidewalk Labs, a subsidiary of Google’s parent company Alphabet. A spokesperson for the firm said 10 percent of the money in the fund is Darren’s own personal investment.
The news comes at a time when investment in construction technology is booming. About $6.1 billion was invested in the sector last year, nearly double that of 2017, according to the Wall Street Journal. Institutional lenders are driving much of that growth; Goldman Sachs, for example, has invested in at least five construction tech startups this year, including a $95 million investment in British modular housing firm TopHat.
Darren is the brother of Brendan Bechtel, chairman and chief executive of Bechtel Group, a construction company founded in 1898 by their great-great grandfather Warren. The conglomerate, which generated $25.5 billion in revenue last year, has built a long list of notable projects, including the Hoover Dam, the “Chunnel” connecting France and Britain, and the world’s largest solar-thermal plant in California’s Mojave Desert.
“Bechtel is not an investor in B&M or any of its portfolio companies,” a spokesperson for Bechtel Group said in a statement. “However, due to Darren’s familial and past professional relationship with Bechtel, B&M considers the company a Preferred Industry Partner, along with its anchor investors.”
Darren launched Brick & Mortar Ventures in 2015 with his Stanford roommate, Brendan Wallace. While they both saw real estate as ripe investing ground, the scale of their ambitions differed.
“We were noodling and drafting a pitch deck,” Darren said in an interview. “Brendan said $500 million, I said $50 million.”
Darren realized his interests skewed more toward construction tech, while Wallace was targeting hospitality and commercial real estate innovation.
Wallace, who worked at Blackstone Group, went on to launch Grey Wolf Ventures, the predecessor to Fifth Wall, which he leads today with fellow Blackstone alumnus Brad Greiwe. Fifth Wall has since launched three funds, including a $500 million fund launched in June to focus on real estate technology. Wallace, who declined to comment, remains an advisor to Darren’s firm.
Brick & Mortar has invested in angel rounds for more than 40 startups, including Branch Technology, Canvas, FieldWire, Connect Homes, SafeAI, Timber and SafeSite. Another startup, construction software firm, Plangrid, was backed by Brick & Mortar and later acquired for $875 million in 2018 by Autodesk, a limited partner of Brick & Mortar.
Darren said the latest funding will allow him to “double down on the investment thesis,” and ramp up investments between $1 million and $4 million, a sign of soaring confidence in the sector.
“In 2015,” he said, “if you could cut a $2 million check in construction tech, it was King Kong.”