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Construction technology attracts US$24 billion in investment
Despite the decline in funding across a range of sectors, construction technology continues to attract investor interest. They have attracted US$24 billion of investment in 2024, overtaking sectors such as climate technology and fintech.
Noa presented a construction market analysis that showed high investor interest in innovation in the industry. One key driver is the need to tackle climate change. Analysts believe that the development of new construction technologies will accelerate the adoption of sustainable construction methods.
Note that the global financial market has been in recession for several years. Experts note a decline in investment in many sectors, including the most popular ones. Nevertheless, the construction industry has fared better than other sectors:
- venture capital investments in fintech decreased by 18%;
- climate technology funding fell by 23%;
- construction investment declined by 7%.
In addition, some areas of the sector saw significant growth. Due to the growing urgency of reducing carbon emissions, decarbonisation solutions were particularly in demand.
Industry segment overview
2024 was a successful year for the electrification of the construction industry.
Investment volume increased by 10%. Venture funding for grid technologies grew by 40%. Despite this, analysts noted a decline in the electrification equipment and installations sector. The drop was 30%. The reasons for this result are the effects of the energy crisis in Europe and the failure of reforms.
Robotics and automation attracted 61% more investment in 2024 than in 2023. At the same time, the construction robotics segment grew by 895%. The key factor behind this development is the introduction of AI in building construction and renewable energy installations.
Experts cite imperfect regulatory standards as a limiting factor in the industry’s development. In addition, some reforms in the renewable energy sector have negatively impacted the construction of such facilities.
Regional specificities
Inconsistent regulatory processes in Europe have reduced the sector’s potential. For example, Germany removed incentives for residential modernisation, which led to a downturn. However, the authorities soon decided to reintroduce the incentives. The UK postponed the implementation of measures to phase out gas boilers, reducing funding for the electrification sector.
The US, where the volume of investment is seven times higher than in the UK, recorded the highest number of construction technology deals. Nevertheless, the UK remains the European leader in terms of funding. London ranks third in terms of deal numbers, ahead of New York and San Francisco. Companies offering network technology solutions are of particular interest to the UK market.