Indian Constru-Tech landscape

September 9, 2023

012 | Indian Constru-Tech landscape | First-gen Constru-Tech's vs. the next-generation

This week:

What the Indian Construction-Tech market looks like, who are marquee Con-Tech's in India, and how to foster great founder partnerships in India
In what ways the first-generation of Construction-Tech models differ from the next-generation of Con-Tech companies we are seeing break out in USA, Europe and Asia

India emerging as a global construction tech powerhouse

"India already has 5 construction tech unicorns minted in just the last 2-3 years, an impressive feat." says Shubhankar. Out of these 5 unicorns, depending on the cutoff period, "2-3 are already net profitable after tax, showcasing the ability to build sustainable businesses" notes Shubhankar. This rapid emergence has caught the attention of global VCs, many of whom are now actively focused on India as a priority geography for their construction tech investment strategy. The Indian construction tech ecosystem is booming and poses stiff competition to historically strong markets like the US and Europe.

India's managed marketplace model goes global

The managed marketplace model for construction tech and procurement, pioneered in India, is now gaining global adoption. This unique model entails running an "operations-driven digital platform that integrates procurement, logistics, payments etc." explains Shubhankar. It leverages technology as a critical connecting layer across the various workflow modules. Additionally, it utilizes working capital strategically to deliver returns, provide transparency and catalyze scale. This robust solution for reliability, quality and trust issues is resonating worldwide, with companies in other sectors also implementing learning and strategies from the construction tech managed marketplaces across India.

Construction tech expands beyond the US

Construction tech is rapidly diversifying beyond just being a US centric trend. While the US remains a dominant force, the sector is seeing notable global emergence across Europe, Australia, Africa and most prominently India. India especially is a construction tech leader today with major unicorns, profitable businesses and tremendous growth. Meanwhile Europe is pioneering innovations in construction robotics and energy renovation tech. Australia has also produced leading construction tech unicorns relative to its population size. The global growth, proliferation of models and opportunities signifies construction tech is now a worldwide phenomenon with a bright future across various regional markets.

Experienced founders and capital reshape construction tech

The construction tech landscape is shifting to a new generation, marked by more experienced and pedigreed founders. These founders are tech entrepreneurs who have already built and scaled companies, providing invaluable execution experience. There is also far more growth stage capital available today, versus the bootstrap early days of construction tech. This enables the scaling up of disruptive models and removes constraints faced previously. The considerable dry powder, track record and ambition of next-gen founders is a "powerful combination that can yield large generational companies" believes Patric. Incumbents face a heightened competitive environment versus the past.

Novel models emerge in next-gen construction tech

Several new potentially disruptive models are emerging within the frame of next-gen construction tech. One area is digitally-enabled renovation of building energy performance and physical materials. Another is leveraging on-site robotics to counter the skilled labor shortage prevalent in many markets. Additionally, India's vast workforce presents an opportunity to export skilled construction labor as a managed service to other countries. While offsite construction has existed for a while, on-site robotics provides a novel automated approach compatible with most projects. These new segments signify the ongoing expansion and reinvention of applicable construction tech use cases.

Construction tech adoption reaches an inflection point

In the last decade, the pioneering construction tech companies laid the digital foundation and rails across the industry's workflows. This readiness along with workforce and economic trends, is now fueling a steep adoption curve climb. Behaviors are shifting as technology is seen increasingly as a strategic lever for efficiency, cost savings and access to labor. After previously underestimating and overlooking construction tech, incumbents are now in some cases "overeager to implement the latest innovations" notes Patric. While optimism must be tempered, the acceleration is very real as the market accepts construction tech as indispensable digital transformation.

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Keywords: construction tech, india construction tech, construction marketplace, procurement platform, construction robotics, building renovation, energetic renovation, digital construction, future of construction, construction unicorns, construction investing, global construction tech