Artificial intelligence (AI)-enabled construction start-ups have raised more venture capital investment in the last three years than AI-enabled fintech start-ups, according to a new report.
Demand for AI-enabled start-ups deploying technologies for the Built World is soaring globally, with start-ups raising a collective $12.3bn in the last three years, according to a new report by construction technology venture capital firm A/O PropTech.
The report found that AI-enabled construction start-ups raised as much as the fintech sector in 2022, demonstrating the appetite from investors for companies developing technologies including machine learning and computer vision to make building construction, management and transactions smarter and more efficient.
Construction AI start-ups in Europe and North America alone received a total of $18.6bn in venture capital funding, of which close to half was in the last two years ($8.6B). In both 2020 and 2022, AI construction venture deals overtook the fintech AI sector, reaching over 600 deals globally in 2021 alone.
Start-ups focused on construction technologies are leveraging technologies from robotics to computer vision, IoT, digital twins and generative AI, to make processes, operations and decisions more efficient, streamlined and informed.
Gregory Dewerpe, founder and CIO of A/O PropTech says that technologies like generative AI look set to cause seismic changes in a number of sectors. “When it comes to the built world, we are already seeing the adoption of generative AI applications across the entire lifecycle from design, architecture and construction to operations and management.”
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However, Dewerpe warns that it is important to look at innovation in a holistic manner, and while AI has massive potential, it will require the entire construction tech stack to develop (data, transparency, automation) in order to yield game changing impact. “Broadening digitisation will be key to enable innovators to leverage generative models and other AI technologies to unlock true automation in the construction technology – which can be essential for decarbonising our buildings and cities,” adds Dewerpe.