#Software

Construction Tech

Construction technology spans the full industry lifecycle, helping general contractors, architects, engineers, and building owners participate in the broader construction ecosystem before, during and after construction and on and off the jobsite.

LLR made its first investment in construction technology in 2006. Much has changed over the years, but we today we believe the opportunistic market conditions have created the environment for even bigger growth. We welcome technology companies and intermediaries working in this space to contact Katie Lankalis about opportunities to invest in and support their growth.

 

With a set of industry challenges tailor-made for technology solutions and historically low adoption rates, we see a massive greenfield opportunity in construction tech. Mounting industry pressures, an appetite for change and improvement, and a downturn have given the industry time to explore better ways to get the job done.

Cheng Li, Principal at LLR Partners

Greenfield opportunities in construction tech

Growing population and accelerated urbanization

The combination of a growing population and accelerated urbanization results in a significant increase in the need for construction projects and spending.

Lofty price tag for skilled labor

Skilled labor today is not only hard to come by, but also expensive when it is available. 41% of the current U.S. construction workforce is expected to retire by 2031.<2

Rising builder sophistication

Increasing sophistication of builders creates pressure on the total cost of ownership for contractors, including funds spent on the construction process itself.

Large market with persistent pain points

LLR estimates the construction software market to be $10-12 billion, with the vended market roughly $4 billion.<3 A 2015 study found that project owners lack visibility into progress and 98% of projects incur cost overruns or meaningful delays.<1

Increasing likelihood to vend

Construction is one of the last industries in the global economy to undergo a digital transformation. Scarcity of skilled labor, continued cost pressures, and further work site safety measures will force construction companies to be more efficient.

Complacent incumbents create opportunity for innovation

There is currently a two-horse race between Procore and Autodesk, who are focused up-market, costly, and require meaningful configuration. Opportunity exists for cloud-native solutions in various industry subsectors.

Industry pressures multiply the need to digitize

98%
1
of projects incur costly delays or overruns
41%
2
of U.S. construction workforce expected to retire by 2031
$6-8 billion
3
size of unvended construction tech market

Get to Know LLR Partners

25 Years of Investing Technology

  • Founded in 1999, LLR is a growth oriented private equity firm investing in high growth, disruptive technology companies
  • Raised over $7.0 billion of capital across seven funds
  • We are focused on organic, topline growth initiatives and complementary acquisitions to create value for all stakeholders
  • Thesis-driven investment teams look to build fit-for-purpose strategies along side management teams.

Operational Support

  • Leverage best practices developed through codifying successful strategies across our 130+ investments since inception
  • LLR’s Value Creation Team (strategy, talent, S&M, Product, finance, M&A) to help accelerate growth

Focus on Partnership

  • Flexible capital provider (majority or minority ownership)
  • Reward and motivate key players with equity

Investment Criteria

  • Flexible investment criteria
  • Ability to invest $40 – $150M of equity
Select Investment Experience

LLR invests in the sectors where our investment experience indicates there are attractive business models and market trends supporting strong growth potential. Here are some of our related investments.

Latest GrowthBits

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#Software
Construction Technology is Poised for Takeoff in 2023 and Beyond. Here’s Why.
Cheng Li / Principal

Meet the LLR Team

Katie Lankalis

Katie Lankalis
David Reuter

David Reuter
Cheng Li

Cheng Li
Edward McCann

Edward McCann

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References

  1. Changali et al. “The Construction Productivity Imperative.” McKinsey & Company, 2015. https://www.mckinsey.com/capabilities/operations/our-insights/the-construction-productivity-imperative 
  2. Zibell, Kelsey. “Expanding the Reach of Influence.” National Center for Construction Education & Research, 2019. https://scoar.org/wp-content/uploads/2020/06/VOICE-Magazine-10-19.pdf 
  3. LLR proprietary data analysis.
Disclaimer:

The information presented herein is intended for an audience of potential LLR portfolio companies and the intermediaries supporting their capital raise processes. Named LLR investments presented herein do not reflect a complete list of LLR investments and are provided for informational purposes only. Certain statements about LLR made by portfolio company executives and other quoted parties herein are intended to illustrate the work of LLR’s Value Creation Team with such portfolio companies or reflect the individual’s perspective on the featured industry sector. Such portfolio companies are controlled by investment vehicles managed by LLR. Quoted parties were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company or Senior Operating Advisor roles, and in certain cases are also owners of portfolio company securities and/or investors in LLR-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.