1、May 2023Private Equity&Principal Investors PracticeFrom start-up to scale-up:Accelerating growth in construction technologyTo achieve scale,founders,executives,and investors in construction technology need to eliminate the barriers to efficient growth.Heres how.by Jose Luis Blanco,David Rockhill,Adi

2、tya Sanghvi,and Alberto TorresConstruction sites in 2023 might in many ways resemble those in 1923,with manual bricklaying,paper blueprints,and scaffold towers.At$12 trillion,1 architecture,engineering,and construction(AEC)is one of the biggest industries in the world,but historically it has been am

3、ong the slowest to digitize and innovate.This,however,is changing fast:strong demand for infrastructure,a shortage of skilled labor,and increased stakeholder pressure for data transparency and integration are all accelerating digital adoption.As a result,the AEC tech ecosystem has experienced an exp

4、losion of investment and a wave of start-up launches.An estimated$50 billion was invested in AEC tech between 2020 to 2022,85percent higher than the previous three years.During the same period,the number of deals in the industry increased 30percent to 1,229(Exhibit 1).Although the AEC tech industry

5、is maturing,it is not yet at the scale and sophistication of more established software markets like logistics,manufacturing,and agriculture.The industry boasts fewer scale-ups and unicorns relative to its size.And it is hard for AEC tech companies to grow efficiently due to several dynamics among AE

6、C customers,including fragmentation,low IT spend(relative to other industries),and entrenched analog ways of working.In this environment,how can AEC tech companies accelerate adoption and sales and achieve scale?To answer this question,we surveyed approximately 100 investors and AEC tech players in