The built world venture capital niche is buzzing with exciting capital, as the broader equity market continues to remain idle. Since the beginning of 2022, an additional ~$5B in deployable capital has been raised, bucking the broader VC fundraising enviroment's contraction. There are investors from every corner of our economy ostensibly playing a hand in this ripe investment space. With this much money at stake, it is impossible to think about the future of how we design, build, operate and maintain our buildings without also considering the impact of venture capital and the array of fast growing companies that this money has wrought.
Within those focused on the built environment, the venture capital arena is varied and diverse, helping to fuel an equally wide spectrum of tech companies. At the Building Conference we will hear from major proptech funds like Fifth Wall, a firm that has raised more than $3 billion to invest in the sector in recent years; ADL Ventures; CRH Ventures; Shadow Ventures; Energyze Ventures; DIVERGE; and others on trends within the sector.
In recent years, a slowdown in investment in some parts of proptech seems to be offset by a strong demand for all things climate-tech within the field. In BuiltWorlds most recent investment report, we look at trends across many subsectors in proptech and construction and identify areas of relative strength and weakness. For example, our recent report the Q1 Venture Report, dives into the current demand for climate and sustainability-oriented solutions.
"Despite valuation compression across nearly every asset class, environmentally focused startups appear to be the most resilient to financial headwinds, with the built environment contributing to ~40% of global CO2 emissions. Term sheets for early-stage businesses with net-zero pursuits continue to see secular valuation buoyancy as “Mission-Driven” ESG funds/investors continue to flood any promising solutions with oversubscribed funding."
At our Buildings Conference next month, we will be diving deeper into how investors are thinking about opportunities at the intersection of proptech and cleantech. We will be highlighting how this trend is playing out in solutions aimed at development and design of buildings, building materials and systems, and in the operations of buildings.
Another area that remains resilient is construction tech; proptech and building tech investors are increasingly turning to the adjacent construction sector for opportunities. The result is increased convergence across these investment sectors. BuiltWorlds will host a session specifically to examine the where and how proptech and construction tech intersect at the upcoming Buildings Conference.
In increasingly uncertain times, it is that much more important for tech sector investors to be smart and selective about their investments. As our research indicates, investment flows into the proptech and construction tech sector are still much higher than in years past, even if they are down from last year. As we meet with investors, technologists, and industry insiders at Buildings 2023, we look to sort out which of those investors and which of those dollars will find the best returns.
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