The trillion-dollar construction industry is often tarred with the inefficiency brush, accused of failing to move with the times and ignoring digitization in favor of legacy tools. But there is plenty of evidence that things are changing, with countless startups raising large sums of cash to help the construction industry modernize.

Venture capital (VC) funding in U.S. construction tech startups alone reportedly hit $1.3 billion in the first half of 2022, representing a 44% increase on the previous six months. In tandem, a slew of new funds and initiatives have emerged to support a fresh swathe of entrepreneurs, with Building Ventures recently closing a new $95 million fund for construction tech and real estate startups, while Agya Ventures announced a $32 million fund. Brick & Mortar Ventures, meanwhile, launched an early-stage accelerator billed as the “Y Combinator of construction tech.”

It’s against that backdrop that German VC firm Foundamental today unveiled its new fund, targeting $85 million at early-stage construction tech startups globally and building on the early success it has seen from its inaugural $65 million fund which closed back in 2019.

Foundamental said it has seen four exits and one unicorn over the past three years, with the likes of Procore acquiring Indus.ai and Faro buying Holobuilder, while India’s Infra.Market hit a hefty $2.5 billion valuation last August.

On top of that, Foundamental says that seven of its 64 investments have hit a $100 million-plus run-rate, while 81% have gone on to raise subsequent funding.

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