The construction industry has long been known for its resistance to technology. However, a new venture capital firm is looking to change that with the backing of some major players in the field.
Zacua Ventures has recently launched a $56 million fund aimed at supporting early-stage startups in the construction technology sector. The fund is backed by 19 of the largest companies in construction, including Procore, Volvo, and Cemex.
Founders Vivin Hegde, Mauricio Tessi Weiss, and Juan Nieto established Zacua in San Francisco in 2022. Hegde previously worked for construction tool manufacturer Hilti Corp, while Tessi Weiss and Nieto were part of Cemex Ventures.
According to Tessi Weiss, who represents the European Union and Latin America for Zacua, the construction industry is mostly made up of small and medium-sized companies, which has led to fragmented adoption of technology. However, she believes that this presents both a challenge and a significant opportunity. Tessi Weiss explains, “Today, we see technology being implemented in many different areas, such as AI, industrialized construction, IoT devices, and robotics.”
The recent shift towards digitalization has resulted in more startups offering solutions for the construction industry. For example, Kleiner Perkins led a $31 million Series A funding for PermitFlow, a startup aiming to simplify the construction permitting process. Another startup gaining attention is Buildstock, which recently raised $1.6 million in pre-seed funding to address the industry’s prevalent issue of late payments.
Aside from addressing productivity and urbanization, Zacua is also focusing on sustainability. Tessi Weiss explains, “Given that the construction industry contributes around 14% of worldwide gross domestic product and produces 40% of total worldwide greenhouse gas emissions, we are looking for startups that can tackle these issues, along with enhancing efficiency in the industry and developing resilient structures for the future.”
The venture capital firm, which also has a presence in Spain, Mexico, and Singapore, looks for startups within these three areas of focus. Hegde, who represents North America, adds, “We are particularly interested in startups that can contribute to reducing the carbon footprint of construction and building operations and creating smarter, more resilient structures to serve the cities of the future.”
Since its launch, Zacua Ventures has invested in over a dozen startups in the construction technology sector. One notable investment is Construex, an Ecuador-based software-as-a-service marketplace for the construction and design industries. The firm has also led a $9 million seed round in Flexnode, a startup specializing in data infrastructure.
Hegde is proud of what Zacua has accomplished in such a short time. He states, “Raising a $56 million fund in today’s challenging environment is not an easy feat, especially for a first-time fund. This achievement speaks to the immense potential and opportunity that lies ahead.”
