Mapping the Israeli Construction Tech Industry: Disrupting A 10-Trillion-Dollar Industry
The Israeli entrepreneur has a sixth sense for business opportunities, a mysterious way to find the most traditional industry to learn it, to build it and then to disrupt it. And the more the traditional and conservative it is with the combination of little the digitization is even better. Welcome to a 10-trillion-dollar industry - the Construction-Tech.
Breaking all records
2018 was a record year for construction tech startups. According to Crunchbase database, startup companies in the construction and infrastructure industries have raised more than 3.1 billion dollar - an increase of more than 300% compared to 2017.
Along with mega financing rounds of late-stage startups in the value chain ($865 million in Katerra), cloud base solutions ($75 million in Procore), there is a significant increase in early stage startups.
In addition, extensive M&A activity can be seen and the market leaders software companies acquired smaller companies. In the last year at least 13 major mergers and acquisitions were made, including Autodesk, which announced a few months ago about acquisition of two cloud-based start-ups: PlanGrid for $875 million and BuildingConnected for another $275 million, while, Trimble announced on July about the acquisition of Viewpoint for $1.2 billion.
Disneyland of innovation
The global trend has not skipped Israel - the Startup Nation - and we are witnessing here in the land of milk and honey a significant increase in entrepreneurs entering this traditional market, local players and global players who adopt the innovative solutions and lead the change and the investors who recognize the opportunity. In this race for innovation not only the startups are participating - we can see global leaders whom are looking for technologies and solutions that can change the industry and provide them with a competitive advantage in this disruption race.
While mapping the Israeli construction-tech ecosystem we identified an increase of more than 30% in the number of new startup companies that entered to this lion’s den of construction. And it seems that the new entrepreneurs that have joined us this year are more mature, raising bigger financing rounds from investors and developing solutions that some of them — with tons of hard work, good guidance and lots of luck — have the potential to change this traditional industry.
Tackling a 10-trillion-dollar industry
The sector of activity in the field of construction and infrastructure is so broad and the fields of specialization are so fragmented that there is no singular point that will disrupt an entire industry. It’s difficult to imagine a company that can do what UBER did to taxis or the Airbnb to hotels. On the other hand, the ecosystem together like an aircraft fleet of technological solutions are tackling all together the industry and moving it forward.
At Shikun&Binui - Israel’s leading construction and real estate company and Infralab - the construction tech and smart infrastructure innovation lab, we believe that in coming years (or even months) we will see many entrepreneurs invading into this area that affects all of our lives - housing, offices, roads, tunnels, energy, bridges and many many more. Existing startups will become businesses that are growing and based on global markets. At the same time, large and traditional companies will promote innovation in the industry and take steps that will change the facing the industry.