If we had to sum up 2024 in a few words, we鈥檇 call it a year of uncertainty鈥攇eopolitically and socially鈥攁cross the globe. It was a challenging year, yet one that also brought early signs of economic stabilization, including in the Contech (construction tech) investment landscape.
There鈥檚 no doubt that the construction industry remains one of the world鈥檚 largest, and as Cemex鈥檚 corporate venture capital and open innovation arm, we play a key role in its transition鈥攄riving growth and pushing the shift toward sustainability, efficiency, and digitalization. But first, let鈥檚 take a deep dive into what shaped the Contech ecosystem in 2024, guided by our investment experts: Mateo Zimmermann 鈥� Head of Investments; Ibon Iribar & Miguel Carral贸n 鈥� Investment and Open Innovation Advisors.
Keep scrolling to explore the key insights & investment activity of 2024!
Table of contents
A quick picture of the venture capital market
Last year, total venture capital (VC) remained relatively stable in 2024, growing by 6% (vs. 2023) in total investment, though deal activity dropped by 14%. However, the last quarter of 2024 showed a +53% QoQ (quarter-over-quarter) surge in funding鈥攁 positive sign, even as deal count continues to decline.
Contech’s impact on the VC ecosystem
Open innovation in Contech is on the rise, with 33 active strategists identified, and 20% of transactions involving at least one strategic investor. But where are strategic investors allocating their capital? (See the graphic below 馃憞)
- Contech has produced 2 new unicorns in 2024: JobNimbus & Gropyus馃
(United States- Enhanced Productivity): All-in-one software to help streamline roofing operations, contractors can quickly create quotes, order materials, and manage projects鈥攁ll from a single, user-friendly platform.
(Austria 鈥� Future of Construction): Vertically integrated affordable and sustainable housing, offering flexible and modular building systems to optimize land use, customize plans, and build with both off-site prefabrication and on-site assembly.
It鈥檚 crucial to highlight that Contech investments make up only about 1% of total VC funding鈥攁 figure that, despite steady growth over the years, remains extremely small compared to the industry’s overall scale.
鈥�Contech is one of the most untapped sectors in VC, offering significant opportunities for forward-thinking investors and vast growth potential still waiting to be unlocked.鈥� – Mateo Zimmermann, Head of Investments
The core role of innovation
Open innovation in Contech is on the rise, with 33 active strategists identified and 20% of transactions involving at least one strategic investor. But where are strategic investors allocating their capital? (See the graphic below 馃憞)
Furthermore, cement players are continuing to expand their open innovation strategies, including direct/indirect investments, acceleration, venture clienting, and adopting similar approaches to investing in the sector.
鈥淭he growth of corporate venture capital over the past decade has reshaped Contech investment. It is impressive to see that 20% of transactions in 2024 involved at least one industry CVC鈥� – Miguel Carral贸n, Investment & Open Innovation Advisor
North America vs. Europe
Last year, continuing the trend of previous years, North America accounted for 46% of the deals, while Europe and APAC saw a resurgence, increasing their share. However, Enhanced Productivity leads in North America, whereas Europe shows a more balanced distribution across focus areas.
- The UK and Germany lead Contech activity in Europe, representing 44% of all transactions
Early-stages dominate all round types
In 2024, early-stage deals showed strength, accounting for 65% of all deals. Based on this, we expect most investors in the Contech sector to continue focusing primarily on startups in these early phases.
- Early-stage investments continue to dominate, accounting for nearly half of the total funding
This aligns with the expectation that the number of deals will continue to grow, but not the deal sizes, due to the nature of these rounds. At the same time, companies securing larger-scale deal sizes are likely to remain focused on sustainability solutions tied to Cleantech (clean technologies), as these pilots typically require higher upfront costs due to their scale, unlike digital companies, which require less infrastructure. However, the largest deals have significantly reduced in size over the past 5 years, dropping from 50% to 32% in 2024.
- Did you know? The average deal size decreased from $13M in 2023 to $9.3M in 2024&苍产蝉辫;馃搲
A good piece of news is that nearly all-round types saw significant growth last year, except for Series C, which decreased by 20% compared to 2023.
鈥淭he reduction in large rounds forces us to be even more selective. 365bet中国 must identify those Cleantech companies with scalable and long-term viable business models, which can demonstrate efficient use of capital” – Ibon Iribar, Investment & Open Innovation Advisor
M&A activity keeps growing
In the AEC (Architecture, Engineering, and Construction) sector, M&A (Mergers & Acquisitions) activity has grown for three consecutive years (since 2022), with strategic investors making up half of the acquisitions in 2024鈥攕ignaling renewed confidence and strategic recalibration among key players.
On the other hand, Private Equity (PE) interest remains strong, particularly in construction software, as firms focus on expanding their client base and enhancing product functionalities.
AI breaks records in enhanced productivity solutions
All Cemex Ventures鈥� focus areas saw an increase in deal activity in 2024 compared to 2023, but Enhanced Productivity* stood out as the largest, growing by 119% in both deal count and investment amount鈥�an exponential rise driven by the integration of AI into these technologies. AI-driven Contech deals accounted for 37% of total funding, with larger average deal sizes.
- AI in venture capital hit a record high in 2024, raising $101 billion 馃捀
*Enhanced Productivity includes topics like geotechnical analysis, project tendering, project design and budgeting, planning and schedule optimization, BIM & digital twins, project monitoring and control, document management, health and safety tools, insurance and risk management, payments and finance tools, insurance and risk management, payments and finance tools, project quality and asset maintenance.
Top 5 Contech deals fueled by AI
Three of the top five AI deals in 2024 were in the Enhanced Productivity category:
Key takeaways
Closing out 2024, these are our 5 major conclusions:
- Contech investment is stabilizing, and the growing activity and investment in the last two quarters of 2024 is a positive signal for 2025.
- The United States and Europe continue leading investment and activity with 85% of all transactions.
- Productivity has again taken the lead as the largest area 鈥� 119% YoY in US$ invested 鈥� fueled by AI and value-added solutions.
- AI deals have been 53% larger than the rest of deals, concentrating 37% of total funding. 365bet中国 expect this trend to continue globally in 2025.
- With the increasing number of corporate open innovation units, we expect more strategic investments in the next years.
If you want a deep dive into all the 2024 Contech investment data and the outlook for 2025鈥攑lus a list of the 50 most promising startups of the year鈥攄on鈥檛 miss our Top 50 Contech Startups List & Report 2025, developed by the Cemex Ventures investment team.
