Welcome to this month’s edition of Moorgate Management’s ConTech Matters, where we look at news, related stories and trends from around the construction technology industry to help bring you and your business the information you need to devise and develop strategy, including Go to Market within the built environment.
Monthly Market Review
The latest monthly macro environment continues to reflect the trends seen within Q4-24 as witnessed by the recently published Federation of Master Builders Q4-24 State of Trade survey, which signals a rise in material costs and drop off in both workloads and enquiries. Click here to learn more.
Flash PMI numbers for Feb-25 from S&P Global show a continual stalling of business activity, with job losses mounting amid falling sales and rising costs which, with a lack of growth, raises a danger of a “stagflationary environment”. Order books were seen to have dropped at a rate not seen since Aug-23, with costs rising similarly at a rate not seen since May-23, and before the impact of any national minimum wage and employers’ NI increases taking effect. As anticipated, this impending cost increase has seen employment levels in the month fall sharply at a rate not seen since the global financial crisis. To read more click here.
The downturn of new orders and awards in Feb-25 is well illustrated within the latest Barbour ABI snapshot, showing new orders falling 10% from Jan-25 levels to £7.6bn, with residential falling by 45% to £1.4bn and planning approvals falling by 41% to £2.32bn. On a positive note, infrastructure provides some evidence of green shoots with a large growth in awards to £1.3bn, with the North West benefitting from new hydrogen plan and M60 road projects. Click here to learn more.
Looking forward, however, some significant framework initiatives have been announced that will stimulate demand. The South East Consortium published its Decarbonisation and Fire Safety frameworks worth a combined £1.4bn, together with a £300m top up to the Affordable Homes Programme (AHP) announced by Ministry of Housing, Communities and Local Government to fund a further 2,800 homes. In addition, Southern Housing Group announced a £1bn housing retrofit and upgrade framework tender too.
Set against this backdrop, customer trading updates showed a mixed picture within each sector:
For contractors, BOUYGUES UK delivered a positive set of full-year results, with sales and operating profits marginally up on the prior year and margins up 0.2% at 4.5%. With similar results, KELLER shows a margin increase in sales of 4% but with operating profits up 22% year on year. To learn more click here. Foundation specialist Van Elle, in contrast, showed marginal declines in both sales and operating profit with its interim results for the 6m to Oct-24.
Housebuilders delivered a mixed set of results, with Morgan Sindall Group plc subsidiary Lovell Partnerships Ltd delivering full year results showing a 3% increase in revenue and a 7% increase in its secured order book on the prior year. Taylor Wimpey plc showed declines in both revenues, operating profits and completions in its full year results. In an interesting move, Springfield Properties sold 2,500 plots to Barratt Redrow, using the proceeds to pay down debt and change its focus to building Green energy homes in Northern Scotland.
Facilities Management continued to demonstrate resilient demand with Mitie announcing revenues up 15% – 11% of which was organic – together with M&A including its acquisition of Argus Fire. To learn more click here.
M&A activity continued, particularly within the contracting, service and Housing Association spaces:
United Living Group strengthened its infrastructure capabilities with its acquisition of Jones homes. Within the Housing Association space, South East landlords Paradigm Housing Group and Settle announced discussions to enter into a legal partnership for their combined 30,000 homes.
MMC provider Thurston Group enhanced its capability with the acquisition of fabrication specialist Storplan and its 1,900 sq-m facility. Click here to learn more. In contrast to Thurston, Berkeley Group Plc announced closure of its Modular activities after looking to exit the sector.
Sadly, insolvencies also continued with both contractors and housebuilders:
Contractors figure heavily, with Southern contractor Acheson Construction filing for administration along with both Midlands-based TNA Electrical, the building services specialist filing for administration and North West Civils contractor Colin Briscoe Construction.
Welsh housebuilder Enzo Homes also entered administration. To read more click here.
Industry Trends
Persimmon Homes continues to innovate with its Modern Methods of Construction (MMC) subsidiary Space4, launching a three-storey “Model Home” to both trial new technologies and train their supply chain and teams. Of particular interest are the brick facade systems fitted to the timber frame before erection reducing superstructure time scale. To learn more click here.
With the development by EnveoVent of the first complete Category 2 panelised “through the wall” solution from a single manufacturer, offering a fully tested, complete, ventilated and insulated structural wall, the opportunity for smaller regional housebuilders to adopt MMC becomes more realistic, with a focus on social housing and compliance with the upcoming Future Homes Standard. Click here to read more.
There are interesting developments in plant automation with the announcement by Pronto, the autonomous technology pioneer, of its agreement with Heidelberg Materials to deploy its autonomous haulage system (Pronto AHS) to over 100 trucks across Heidelberg’s worldwide operations, delivering operational efficiency, enhanced colleague safety and sustainability scope benefits. To understand more click here.
In a similarly positive step, new routes to market have been identified by Maturix | Real-time concrete monitoring, the Danish technology provider for concrete monitoring (using a wireless thermocouple sensor system), following its distribution agreement with Selkent, which includes the Rebar Buddy safety system in its offering. To read more click here.
With a need to provide a common language and shared approach to accelerate the growth in the Digital Twin (DT) landscape and its adoption, the Gemini Framework seeks to revolutionise the way we look at digital twins – working with the Digital Twin Hub to create a framework that empowers organisations to connect, compare and collaborate on their DT projects. Click here to learn more about the project.
In an equally positive step forward with Product Passports, the Government’s Construction Products Reform Green paper embraces the EU’s position on digital product passports (EU-CPR) and embraces the concept of a construction library to hold construction product information. To read more click here.
The move for manufacturers to automatically distribute their Product data with an effective “publish once to many” strategy continued to get closer to reality, with the PIM integrations within the Building Materials space continuing to be replicated within the contracting and FM space. The most recent collaboration is between Cobuilder and PIM provider Bluestone PIM. Click here to read more.
Continued advancement in the adoption of AI is evident with first fully AI-driven architectural project in Croatia, led by Studio Tim Fu – with AI being embedded in the architectural process from prototyping design to optimising for heritage and the environment on the project. To learn more click here.
In a fantastic article authored by RICS together with Gleeds and Autodesk, an expert in-depth analysis is set out of the areas in which AI can improve construction productivity and health and safety, while reducing its environmental impact, addressing what the authors describe as the “wicked problems in construction”. Click here to read more.
To help address the challenges posed within the Government’s 10-Year Infrastructure Strategy published in early January this year, and the opportunities under AMP8, an exciting innovation in 3D printing and robotics has been made by ChangeMaker3D Ltd working in conjunction with United Utilities and The Manchester Metropolitan University with the production of sewer overflow chambers and IED containment walls, with 3D printing providing a 51% saving in CO2. To learn more click here.
New Construction Materials Innovation continues with a new environmentally friendly mortar being produced by the researchers at Newcastle University, using silica aerogel and recycled PET instead of sand, improving insulation (with a 55% reduction in heat loss) whilst reducing plastic waste – but still having the required strength needed for application under BE-EN 413. Click here to read more.
Funding trends
In a positive assessment of the funding market by BuiltWorlds in their 2024 Venture and Investment report, VC funding within the built environment was still seen as buoyant with deal volume up, but cash investment dropping, although ConTech inflows were seen as tracking prior year levels although down from 2021 highs. Interestingly, UK VC funding was noted as dropping by over 80% year-on-year, with Asia and the EU showing positive year-on-year growth in contrast. To read more click here.
Another perspective on the funding marketplace is provided by Cemex Ventures with its analysis of the market and the trends that they are seeing – an interesting quote from which highlights that “ConTech is one of the most untapped sectors in VC, offering significant opportunities for forward thinking investors…” Click here to read the full insight.
Recent funding rounds closed totalling over US$194m and ranging from seed through to series A,B and C for 6 Contech startups highlighted in Construction Dive, continue to show the funding opportunity and appetite from investors, for start ups addressing specific needs with the industry – with examples ranging from US$127m for project management software provider BuildOps through to US$4.5m for construction HR and payroll provider Trayd: Construction Payroll. To learn more click here.
In a positive move to provide even more sources of liquidity to start ups, Turner Construction Company, the US’s largest contractor by volume, joins its peers including Suffolk Construction and DPR Construction in setting up its own venture fund – Turner Ventures – focusing on the decarbonisation and digitalisation of the sector. These mirror similar manufacturer venture funds such as CRH Ventures and Cemex Ventures, which together provide industry domain expertise alongside venture funding. Click here to read more.
From an M&A perspective, an interesting report by Bain & Company on M&A in the Building products and Technology space entitled “Deals to Shape the Future” highlights the context in which ConTech is being seen, with “…M&A.. being less about short-term synergies and more about acquirers securing the technology and tools that will define their future business”. To read the report click here.
One example of this is ERP solution provider Klipboard, with its acquisition of RAM Tracking, which provides vehicle tracking and fleet management solutions, providing it with enhanced solutions within the physical and field operations space to offer its customers. To learn more click here.
Founder Trends
Understanding your peers’ journey can provide as much insight as it can comfort that your journey and the obstacles you face are not unique. In this interesting interview Altaf Ganihar, the founder of Snaptrude, the collaborative 3D design tool, shares his journey with Bricks & Bytes – of particular note is the role that values played in his success. To understand more, click here.
In a similar vain, this frank piece by Foundamental on the hidden pitfalls of construction tech start ups highlights what they see as common mistakes made by founders include the need for founders to successfully balance innovation with respect for existing knowledge and processes – which is not easy to achieve. Click here to learn more.
As part of a founder’s journey, mentorship can play a key role in a founders development, both to scale up and grow their business and to develop and grow into their evolving role as leaders as their organisations grow. In this helpful and practical guide, Octopus Ventures talk about Mentorship really matters including the role of the Modern Elder in helping founders benefit from their experience. To learn more click here.
Understanding corporate governance and its role within a start up can prove problematic as it may not seem like the highest priority as you are trying to find Product market fit. Understanding what it is and implementing a “size appropriate corporate governance framework” are crucial as you scale. In the interesting article from the Institute of Directors (IoD), the benefits of implementing a framework at the right time can provide untold benefits, particularly when looking for a raise. Click here to read more.
The key to a successful construction technology start up is to provide a solution to an actual industry problem that exists – this may seem obvious but customer centricity is paramount. In this interesting article from RIB Software, the top 10 construction trends and problems faced are perfectly outlined. To learn more click here.
Industry Associations
Among the many founder associations, including the UK’s C-Tech Club and the US’s Contech Alliance, the EU-Startups Association provides an annual forum to connect over 2,000 founders with Angel, VC and Corporate investors over a two-day period – this year in Malta. Click here to understand more.
UK Construction Week on 7-9 May-25 at Excel includes both the Digital Construction Hub and the Offsite Show, focused on MMC, with seminar programmes supporting these themes too To learn more click here. For MMC in particular, one further show is the Offsite Expo 2025 show at the Coventry Arena on 16-17 Sep-25.
ConTech Insight
The growth of B2B marketplaces within construction, particularly within procurement, have helped to take significant friction out of the value chain. In this interesting article, Concept Ventures provide an incisive view of B2B Marketplaces and their continued meteoric rise. Click here to read more.
Providing an interesting insight, Hephaestus Ventures looks at the headwinds being encountered by Modern Methods of construction (MMC) and why it is not yet mainstream – using specific case studies, it highlights both practical steps and, importantly, the value that Contech innovation can play in its evolution. To learn more click here.
The increasing trend for Chief Information Officers (CIO’s) of contractors, FM and Building Materials manufacturers to look to Contech start ups for innovation, big ideas and agility to help with significant pain points being experienced within their organisations is nicely analysed in this CXOTalk podcast providing some key takeaways for start up founders on how to successfully collaborate.
As founders increase the use of AI within their solutions, the need to understand policy and regulation has become paramount. In this helpful Founders guide to AI policy and Regulation the team at Balderton Capital set out considerations by geographic market, from UK to US and EU as well as providing practical top tips for founders to takeaway. Click here to read the guide.
As one of the key elements in your Go to Market strategy, building scalable lead generation strategies can often prove as difficult as the technology challenges faced in creating your minimum viable product. In the really helpful “step-by-step” guide, Saleshandy set out 12 actionable lead generation strategies for start ups, and emphasises the importance of having a clear Go to Market plan. To read the full step by step guide click here.
Choosing the right Tech Stack for your solution that can not only scale but also provide stability and agility when required as you develop your proof of concept (POC) to find a minimum viable product (MVP) can be difficult. Problems arise when you identify you have used the wrong one and need to rewrite the platform, while trying to service those customers you have onboarded. This helpful article by software development house Fively provides a well-thought-out approach that is well worth the read. Click here to learn more.
ConTech Case Studies
When considering a funding round (whether seed or series A), we have shared our experiences helping Contech founders with the creation of a Pitch Deck, in this case a seed round supporting them through to funding. To read more click here.
If you’d like to learn more about any of the topics covered and how we can help you and your business to devise and develop strategy including Go to Market within the built environment, get in touch with Moorgate Management Limited today, or call 07767 291 379.
Thank you for reading.