The world’s economies are grappling with turmoil, but one venture capital expert is betting big on construction technology to weather the storm.
Between the war in Ukraine, supply chain issues, renewed lockdowns in China and inflation, industries have their hands full wondering what’s coming next. But Max Brickman, the managing director of Columbus, Ohio-based venture capital firm Heartland Ventures, believes the current economic environment presents a “perfect storm” of opportunity for construction technology.
The firm announced a $52 million fund targeted at high-growth technology startups with B2B strategies serving real estate, construction, manufacturing and logistics, according to a press release.
Here, Brickman discusses what’s making contech so appealing, his predictions for the future of the economic landscape and big trends that people should look for going into 2023.
Editor’s note: This interview has been edited for brevity and clarity.
CONSTRUCTION DIVE: From your point of view, what will the economy look like over the next couple years?
MAX BRICKMAN: Construction is a huge part of the economy. And as we're looking at making investments, we're not seeing industries like that change very much. With the amount of construction backlog that exists, a lot of construction companies are going to be relatively fine, if not thriving, through the next couple of years because of backlog and federal infrastructure spending.
It creates a situation of “haves” and “have nots,” where I think some industries are going to be really impacted by inflation and by a downturn. Then others — just because of some other factors — won't, and I think construction will be one of those. Not to say construction won't be hurt by the labor shortage, but I think it's the amount of demand that exists that will help industries like construction stay strong.
How does construction technology factor into this forecast? What’s your prediction for how it will perform over the next year or two?
It creates a perfect storm of opportunity, because you have high demand, and lack of labor. The only way out of that is to increase productivity. And the best way to increase productivity is through technology.
I think it's going to be one of the leading sectors in the technology space. It's not slowing down, even if the economy slows down.
What do the mass layoffs at tech companies mean for the field of construction technology?
I think when you have big layoffs like this, it leads to a lot of new business creation.
You have people that are at a turning point in their career, and have the expertise or skill set to start something. And historically, we've seen a huge spike in new business creation during times like this. So for us, that's an exciting time, and we want to be hearing from those folks.
What are some big trends coming out of the construction technology space?
I think it's going to be around labor. That's going to be an asset, not really as much sourcing as much as it is upskilling, or allowing a worker with one skill set to do much more or to gain more experience faster. And so that might be better training, that might be technology that exists on site to provide better instruction.
