Equipment Management Technology Deals in Overdrive, As Investors Converge on Sector

Project Collaboration Software seems to get all the attention in the world of construction technology, and not without merit. Companies like Aconex, Bentley, Plangrid, and PROCORE continue to grab headlines with valuations for the category pushing closer and closer to the $10 billion dollar range.  Despite all the headlines around digitization of project management workflows, investment in construction equipment technology in areas such as equipment marketplaces, equipment management, and autonomy may actually garner more investment this year. The sector has been heating up with big players like Caterpillar, Command Alkon, ITOCHU, Momenta Ventures, and Ritchie Brothers making investments in the sector. With the advances being made, we may yet find that the key to advancing construction productivity in this century, as in the prior century, lies in better, smarter, and more technology-enabled construction machinery.

While Other Areas Grab Headlines, Equipment Grabs Investment Dollars

BuiltWorlds tracks investments in construction technology (members can access our Venture Dashboard for the complete list), and after project management, a sector bolstered by PROCORE's $150 million private placement in May of 2020, the next two biggest categories for investment were in equipment technology, as the chart below shows. Out of more than 60 deals in the construction technology sector we tracked this year, two of the top company types garnering investment were in the equipment sector.

Notable Deals This Year in the Construction Equipment Tech Sector (See our Deal Dashboard for more):

• This past October, Command Alkon announced it was acquiring Trimble's Construction Logistics Business.
• Also this October, Ritchie Brothers announced a $275 million acquisition of Rouse Services, According to the Ritchie Brothers press release, Ann Fandozzi, Chief Executive Officer, Ritchie Bros indicated that Rouse offers a "highly complementary suite of data and service products that will continue and accelerate our evolution from an auction company to a global, trusted marketplace and provider of services."
• While equipment management is evolving rapidly, manufacturers like Caterpillar are pushing deeper into autonomous and robotic equipment that promises to manage itself. This past July, Caterpillar announced the acquisition of the assets of San Francisco, California-based Marble Robot, Inc.
• Further shaking up the sector, beyond the more mature players in the sector, the six year old Missouri-based startup, EquipmentShare, topped off several earlier funding rounds with an added investment from Momenta Ventures, announced this past July.
• Meantime, BigRentz announced a $15 million private placement led by ITOCHU, as part of its merger with LizzyLift and acquisition of Equipment Management Group.
• In March, Haulhub Technologies announced a $30 million investment led, in part, by funds and accounts advised by T. Rowe Price Associates, Inc

Although it may be more difficult to leverage advanced machinery to drive productivity in the construction industry than in other sectors where manufacturers can maintain a consistent and controlled environment, contractors have always loved their tools and equipment, knowing full well that along side the best plan for the project and the best labor, the best tools and equipment make the job.  As we indicated in a briefing this past August (Equipment Management Software Becomes Table Stakes; Four Key Factors and 20 Leading Players In the Sector Now), solutions continue to pour into this part of the industry's technology sector. Also, as we discussed in our recent Analyst Call with Milwaukee Tool and Autodesk, companies are also forming alliances and integrations to drive more value in the sector. The challenge is being met from many angles, but as investment continues to pour into the sector, and new solutions continue to become more robust, it is increasingly clear that the 21st century will bring radical change to construction equipment, and to how that equipment is managed.