小蓝视频色情网页版

, the most highly funded and valued startup in the construction tech space, earlier this month filed for bankruptcy protection, a spectacular demise for a company that had raised some $2 billion from private-company investors. But while the sector鈥檚 biggest unicorn has imploded, venture capitalists say they鈥檙e still bullish on the construction tech space overall, though investing more cautiously.听

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Katerra aimed to disrupt the home construction industry by creating prefabricated materials that could be assembled into structures on site. It had raised around $2 billion from investors 鈥� mostly 鈥� before filing for Chapter 11 bankruptcy and announcing it would shut down earlier this month amid investigations into its accounting practices and reports that it .

Despite Katerra鈥檚 spectacular rise and fall, investors and startup executives in construction tech say the company鈥檚 troubles aren鈥檛 indicative of the investment opportunities in the sector overall. Rather, investment in the space is likely to shift more toward software workflow efficiencies rather than new ways of physically building, industry insiders say.

鈥淚 think (Katerra鈥檚 collapse) is going to be a bellwether to spur on more investment in construction technology, but on the software side, and [into technologies that] show a real ROI within weeks, not years, for a construction company,鈥� said , CEO of construction tech startup , which makes a financial workflow system for the construction industry.

The Katerra saga is 鈥渁n education that this isn’t like other industries,鈥� he added. 鈥淭his isn鈥檛 manufacturing adjacent 鈥� construction is its own thing.鈥澨�

The reported issues surrounding Katerra were company-specific 鈥� not a sign that innovation in the construction space is in trouble, according to , a partner who has invested in proptech companies including and .听

Plauche predicts the construction tech space likely will not see a significant dip in funding as a result of Katerra鈥檚 collapse.

鈥淲hat they were trying to solve was around prefab, building materials, streamlining the construction business,鈥� Plauche said. 鈥淎nd the majority of construction tech, proptech solutions is going toward SaaS solutions.鈥�

While it is challenging to innovate in the area of physically constructing homes, there are still opportunities to innovate in other areas of the construction ecosystem, according to Plauche. Construction tech鈥檚 biggest win of the year, newly-public company , raised $635 million through its IPO and reached a nearly $10 billion valuation by creating construction project management software.听

There鈥檚 plenty of room for other software innovators to disrupt the space, Plauche said: 鈥淚t鈥檚 still an industry that hasn鈥檛 been eaten by software.鈥�

Some of the most recent construction tech companies to receive funding include ($5.3 million), which digitizes change orders and helps those involved in a construction project keep track of costs, and Briq ($30 million).听

But Katerra was by far the most heavily funded startup in the space. It had raised around $2 billion from investors including , , and most notably, SoftBank. Japan-based SoftBank led at least three rounds of funding for the company, starting with a $865 million Series D in January 2018, per 小蓝视频色情网页版.听

Katerra held the industry crown

Katerra has drawn more private-company investment than any other startup in the construction tech space for each of the past five years, Of the $1.5 billion raised in the construction tech space so far this year, its $200 million funding round announced on Jan. 1 is tied for the largest.听

The company also had the largest funding round for a VC-backed construction tech company last year, with its $200 million venture round in May of this year surpassing听 Procore鈥檚 $150 million round. It also had the largest funding rounds for the sector in 2018, 2017, and 2016, according to 小蓝视频色情网页版 data.听

Over the years, the company acquired at least 14 traditional firms in the construction, lighting, and design spaces, 听

Searching for the 鈥楽alesforce of construction鈥�

According to Hamdy, Briq鈥檚 CEO, part of the reason Katerra failed was because investors and early management generally didn鈥檛 understand how the construction industry works.听

Katerra鈥檚 former CEO Michael Marks, for example, was previously the CEO of contract electronics manufacturing giant . That pedigree seemed to have instilled confidence in investors who saw in the CEO an executive who had experience in the complex world of supply chains and with running a publicly traded company.

But Katerra began to run into problems delivering on its vision. “The vision was solid. The execution was not, and the execution was the part I was less worried about because of Marks and his experience with big, complex businesses like Flextronics,鈥� one unnamed investor in the company

In many ways, you can think of the construction industry itself as the anti-SaaS, Hamdy said: If subscription software is all about going out and building something repeatable with recurring revenue, construction is the exact opposite of that. But the workflows surrounding construction–such as payments and tracking financials–can benefit from SaaS solutions.

鈥淚 think Katerra started with a decent idea,鈥� said Hamdy, who鈥檚 worked in construction tech for over two decades. 鈥淚 think they started with consumer packaged goods people pitching an idea that they could turn construction into a manufacturing and logistics play…without ever having done anything in construction. And then they frantically tried to hire people in construction, and at that point it was too late.鈥�

Hamdy expects that going forward, investment in physical products will see a dip while investors search for the next 鈥淪alesforce of construction.鈥�

鈥淚 think you鈥檒l see a decline in the idea of, 鈥榃e鈥檙e going to automate the job site with physical products,鈥� and you’ll see a big push into what workflows in construction need to be disrupted,鈥� Hamdy said.

Katerra鈥檚 implosion likely won鈥檛 affect seed or Series A companies in the space that are looking for funding, but investors would likely want to see smaller rounds of funding and incremental progress first, before the big checks roll in, according to of .

鈥淚 think there’s a lot of capital in the private markets in general,鈥� said Flager, whose firm has invested in proptech companies and whose brother previously worked for Katerra.听

鈥淚t鈥檚 a huge space and I don鈥檛 think people are going to be deterred,鈥� he said.鈥滻 think they’re going to believe if done the right way, if done incrementally with the right goals, change is possible. So I don鈥檛 think people are going to stop going after it because there aren’t that many industries left that are that large that haven鈥檛 seen tech really transform it.鈥�

Illustration: Dom Guzman