CRH has officially launched its strategic venture arm: CRH Ventures – a $250M corporate venture fund aiming to reshape the built environment through early-stage minority investments in digitization, industrialization, marketplace-enablement, decarbonization, and next-gen products.
The launch of CRH Ventures comes at a time when alternative investments are red hot and built world-specific VCs are raising more capital than ever in history. In the first three quarters of 2022 alone, VCs across the globe raised a staggering $150.9B, already exceeding the $147.2B raised through all of 2021 (across 1139 funds). The AECO-tech ecosystem is gearing up to scale as the pandemic's digital acceleration eases stakeholders' hesitancy to adopt new technologies, largely a result of the immediate cash-flow needs and paper-thin margins of the industry.
This is all changing as mission-critical strategic investors enter the fray, with some skin in the game. These strategic investors not only function as initial customers but are able to test, prove, and scale these innovations for not only their own internal benefit but to advance the entire industry.
CRH Ventures, a member of BuiltWorlds Venture Forum, has made one investment in AICrete (Seed extension round) and is looking to close another soon. The group has grown from just 3 employees to 5 and is looking to add a few more team members in 2023 as this innovation-backing corporate financier looks to scale up its investment activity.
Daniel Laboe, Director of Venture Investments at BuiltWorlds, had the pleasure of conducting an interview with Eduardo Gomez, Head of CRH Ventures, prior to the official launch to get the inside scoop. Here's what he had to say:
Q: What was CRH’s motivation to launch a venture capital fund?
A: The establishment of CRH Ventures is part of CRH’s continued commitment to investing in new technologies that will shape the built environment of tomorrow. CRH Ventures will serve as a valuable partner to start-ups and entrepreneurs that will benefit from the technical capabilities, knowledge and expertise of a global industry leader to pilot and scale new technologies and innovations that will enable safer, smarter, and more sustainable construction.
Q: How will the deployment of CRH Ventures’ $250M in funds play a role in this industry’s advancement? What do you see as CRH Ventures’ prevailing strategies of the portfolio?
A: CRH Ventures is an early-stage fund, with the flexibility to invest in later stages under the right circumstances. We are seeking minority investments primarily focused on Series A and B (where we believe we can offer the most value). However, CRH Ventures offers more than just capital. We are also seeking to develop other types of collaborations through pilots, commercial arrangements, and partnerships.
CRH Ventures will support the development of new technologies and innovations that will enable safer, smarter, and more sustainable construction. We will focus on five areas at the core of the construction industry’s changing landscape:
- NextGen Products -Commercialize and scale the next generation of advanced sustainable products
- Marketplaces - Increase market efficiency and optimize the interaction between how we sell, rent, and hire materials, equipment, labor, and services
- Decarbonization - how we create value by decarbonizing our industry and accelerating our industry's path to carbon neutrality
- Industrialization - Increase on-site productivity and safety
- Digitalization - Build a smarter and more efficient world
Q: Has CRH Ventures’ made any initial “stealth” investments?
A: We have already made our first investment into AICrete, a start-up that optimizes concrete mixes using AI and Machine Learning. Through this technology, concrete producers can reduce their costs and carbon footprint. We’ll be announcing our second investment in the decarbonization space in a company that converts waste into supplementary cementitious materials (SCMs). We don’t disclose specific amounts and have the flexibility to lead or follow. This will be determined on a case-by-case basis.
Q: What is CRH Ventures’ perspective on the opportunities in the Architecture, Engineering, and Construction (AEC) sector? What are the mission-critical technologies of the sector today, and how does that relate to the transition to cloud-infrastructure technologies instead of onsite servers? Additionally, how does this relate to the shift away from skilled labor and efforts to improve sustainability?
A: You have mentioned two of the biggest challenges that we are facing as an industry, labor shortages, and decarbonization. We believe the development of new technologies will be essential to tackle these challenges, and that’s why we selected both as part of our focus areas (Decarbonization and Industrialization).
We think that industrializing our industry through robotics, and off-site construction will drive performance across the construction value chain, while also bridging the gaps from existing labor shortages.
We believe we’ll need breakthrough innovations in CCUS, low co2 materials, alternative fuels, and green energy areas. Our goal at CRH Ventures is to identify these technologies and find ways to partner to accelerate the path to carbon neutrality.
Q: What is CRH Ventures’ perspective on implementing vertical integration across the lifecycle of the building value chain? Is this something that CRH Ventures’ sees as a driver of investment in the AEC space, and do you see technology being the adhesive that helps to fully integrate this industry?
A: At CRH Ventures, we are focused on addressing the customer’s pain points, and our approach is to partner with companies to create best-in-class solutions. Yes – there could be scenarios where integrating across the value chain will help facilitate the delivery of best-in-class solutions, but it is one of a number of levers available to us
I think technology will be an enabler to reduce friction across our industry as a function of generating and sharing better data, streamlining our manufacturing process, and getting closer to end consumers to really understand the drivers of those making the purchase decision.
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