Watch Episode 5: Singularities
Proudly produced alongside Bricks and Bytes.
Irreversibility
Irreversible mega-shifts drive our investment thesis. We're not chasing fleeting trends - we're backing founders solving enduring problems in the built world.
The construction industry is facing several irreversible mega-shifts that will reshape its future. As investors, we're laser-focused on identifying and capitalizing on these transformative trends. It's not about riding temporary waves - we're looking for fundamental changes that will persist and grow over the next decade and beyond.
One of the most pressing issues we're seeing is the severe shortage of qualified labor. This isn't a cyclical fluctuation - it's a structural problem that's only going to intensify. In Europe alone, we're already short 900,000 construction workers. By 2030, that number is projected to surpass 1 million. And we're not just talking about general labor - this is a shortage of skilled, experienced workers who are critical to complex projects.
The truck driver shortage provides a stark example of how quickly these labor issues can escalate. In Europe, we went from a shortage of 500,000 drivers in 2021 to 650,000 in early 2022 - a 30% jump in less than a year. The Ukraine conflict suddenly removed 150,000 drivers from the workforce. By 2030, we're looking at a deficit of over 1 million drivers. This isn't just a logistics problem - it has major ripple effects across the entire construction supply chain.
We're also closely watching the massive push for energy-efficient building retrofits, especially in Europe and parts of North America. This isn't a passing fad or policy whim - it's an economic and environmental imperative that will drive construction activity for decades to come. The sheer scale of existing building stock that needs to be upgraded creates an enormous, persistent opportunity.
Another critical area that's woefully under-addressed is cybersecurity for buildings and infrastructure. As our built environment becomes increasingly connected and automated, the attack surface for malicious actors is expanding exponentially. Yet we see very few founders tackling this problem head-on. We believe this space is primed for innovation and will become a major focus in the coming years.
The electrification of economies and the subsequent need for massive grid infrastructure upgrades is another irreversible trend we're watching closely. The rise of EVs, smart homes, and energy-hungry technologies like AI are putting unprecedented strain on power grids worldwide. By some estimates, data centers alone could consume up to 20% of grid capacity in the near future, up from about 5% today. This isn't just an energy sector problem - it's a construction and infrastructure challenge of epic proportions.
As Patric Hellermann puts it:
"Whenever we think of mega shifts, what makes it mega is the scale but also that it's irreversible. You can have temporary shifts, but those are actually really poor investments for venture capital."
We're looking for founders who recognize these tectonic shifts and are building solutions that directly address them. It's not enough to have a clever idea - we want to back companies that are positioning themselves at the forefront of these multi-decade trends.
At the same time, we're wary of false prophets and hype cycles. Shub Bhattacharya cautions: "Make sure that what you're attacking as a mega shift is really irreversible. Like COVID - it destroyed as much value as it created for some of the founders that built in that space. The history is littered with companies that went like this [up and down quickly]."
Our job is to separate the truly transformative opportunities from the noise. We're not interested in incremental improvements or Band-Aid solutions. We're backing founders who are reimagining entire systems and processes to tackle these massive, irreversible challenges head-on.
The next generation of legendary construction tech companies won't be built on passing fads. They'll be the ones solving the most pressing, persistent problems facing our industry. That's where we're placing our bets.
Robotics
On-site robotics is revolutionizing construction, tackling labor shortages while creating new distribution models. We're backing founders who see the massive potential in this space.
The construction industry is facing a perfect storm of labor challenges. An aging workforce, difficulty attracting young talent, and increasing project complexity are creating a massive skills gap. This isn't a temporary blip - it's a structural shift that's forcing the industry to rethink how work gets done. That's where robotics comes in, and we're particularly excited about the potential of on-site robotics to transform the construction landscape.
Why are we bullish on on-site robotics? It comes down to the realities of construction. While off-site prefabrication has its place, the vast majority of projects require significant on-site work. Urban infill, renovations, and complex architectural designs all demand adaptable solutions that can operate in varied and unpredictable environments. On-site robotics meets this need head-on.
Adam Zobler explains our thinking: "Off-site, you're in a confined area with fewer variables. Each construction project is unique, so it's harder to train [robots] unless you focus on very repeatable, monumental tasks." On-site robotics, on the other hand, can be deployed across a wide range of projects and adapt to site-specific conditions.
But the real game-changer with on-site robotics is the distribution model it enables. Patric Hellermann elaborates:
"I can offer my services as an outcome. I can offer a subcontractor model - I just happen to do it with robotics. I'm running into a buy-ready market with a distribution motion that is completely established."
This is a crucial point. By offering robotics as a service, these companies can plug directly into existing construction workflows and budgets. They're not asking general contractors to radically change their processes or make massive capital investments. Instead, they're offering a plug-and-play solution to tackle specific, high-value tasks.
We're looking for robotics solutions that target what Patric calls "large homogeneous surface areas with a low ratio of edges and corners." Think tasks like bricklaying, roofing, or paving large areas. These applications offer the right balance of complexity and repeatability to make robotics economically viable.
Another key factor we consider is the visual fidelity requirements of the task. As Patric notes: "If the customer needs absolute perfection in the finished product, that's one of the toughest things to start with." We're more excited about applications where small imperfections won't significantly impact the end result.
Of course, hardware startups face unique challenges. They're capital intensive and can be difficult to scale. But as Adam points out, there's a silver lining: "Scoping out hardware-related firms - they're hard to be successful, but they're very hard to copy. I could copy-cat an enterprise SaaS company relatively easily, but doing a robotic solution for bricklaying? That's f***ing hard."
This built-in moat is incredibly valuable. Once a robotics company cracks the code for a specific application, they have a significant first-mover advantage that's difficult for competitors to overcome.
We're not just theoretical about this - we've put our money where our mouth is. We've backed companies like Kewazo, which is revolutionizing scaffold assembly with its robotic solution. These aren't pie-in-the-sky concepts; they're real businesses solving real problems on job sites today.
Looking ahead, we see massive potential for on-site robotics to expand into new applications. Fencing for large industrial or commercial complexes is an area ripe for innovation. We're also keeping an eye on more complex tasks as the technology evolves.
The construction robotics revolution isn't coming - it's already here. We're excited to back the founders who are building the next generation of intelligent machines that will reshape how we build our world.
Design
The AEC design stack is overdue for disruption. We're backing startups bringing real-time collaboration, cloud-native tools, and AI to an industry stuck in the past.
The architecture, engineering, and construction (AEC) industry was one of the first to adopt digital tools, with computer-aided design (CAD) dating back to the late 1960s. Yet, paradoxically, it's also one of the industries where software innovation has stagnated the most. The core stack of design and engineering tools has remained largely unchanged for decades, creating massive inefficiencies and frustrations for practitioners.
Patric Hellermann doesn't mince words:
"If you listen to the architecture community, to the engineer community, all you're hearing is frustration. You're rarely hearing any good word about any of the major authoring tools."
This isn't just grumbling - it's a sign of a massive market opportunity. The current generation of design tools is failing to meet the needs of modern AEC professionals. They're desktop-bound, siloed, and struggle with real-time collaboration. In an era of distributed teams and complex, multi-disciplinary projects, this is a recipe for disaster.
Two areas ripe for disruption in the AEC design space we see are for example:
Data Infrastructure and Interoperability: The current ecosystem of design tools is a fragmented mess. Different disciplines use different software that doesn't play well together. Real-time collaboration is a pipe dream, and moving data between systems is a constant headache.Patric explains the problem: "Making Martin work in his software, Owen in his software, Adam in his software, and me in my software - and they're all different software vendors, and we're all working on the same model with each other - it's just not a thing. It doesn't exist."This is why we've made bold bets on companies like Speckle, which is building a data infrastructure layer to enable seamless interoperability between different AEC software tools. We believe this kind of foundational technology is critical to unlocking the next wave of innovation in the industry.
Next-Generation Authoring Tools: The current crop of design tools looks and feels outdated. They have steep learning curves, are difficult to master, and often tie users to specific hardware setups. We're excited about a new wave of cloud-native, browser-based tools that are lowering the barrier to entry and enabling true collaborative design.Patric highlights the opportunity: "For everyone who's coming into the industry - the students, the aspirational academics that want to break into architecture engineering, that want to build with 3D and construction - now is the time to give them a better tool stack."We've backed companies like Snaptrude and Arkio, which are building intuitive, collaborative design tools that run in the browser. These platforms are making advanced design capabilities accessible to a much wider audience, democratizing the design process.
But it's not just about making prettier, easier-to-use software. We're looking for tools that fundamentally change how design work gets done. This includes leveraging AI and machine learning to automate repetitive tasks, provide design suggestions, and catch potential issues early in the process.
We're also excited about tools that bridge the gap between design and construction. BIM (Building Information Modeling) has been around for years, but its full potential remains largely untapped. We see huge opportunities in making BIM data more accessible and actionable for everyone involved in a project, from architects to contractors to facility managers.
The shift to these new tools won't happen overnight. There's significant inertia in the industry, with professionals who have invested thousands of hours mastering existing software. But as Patric notes, the new generation of AEC professionals will drive adoption: "They will be hitting the market next year and the year after and the year after, and they are such an important and underserved target audience."
We believe we're on the cusp of a design tool revolution in AEC. The companies that can deliver intuitive, collaborative, and powerful design tools will not only capture massive market share - they'll fundamentally change how our built environment is conceived and created.
It's an exciting time to be investing in this space, and we're committed to backing the founders who are building the design tools of tomorrow.
Labor
The construction labor crisis demands innovative solutions. We're investing in upskilling platforms, cross-border sourcing, and technologies that multiply workforce productivity.
The construction industry is facing a labor crisis of unprecedented proportions. It's not just about numbers - though those are staggering enough. We're looking at a shortage of millions of workers across Europe and North America in the coming years. But the real challenge is in skills and experience. As veteran workers retire, we're losing decades of accumulated knowledge that can't be easily replaced.
This isn't a problem that will solve itself. It requires innovative, multi-faceted solutions. At Foundamental, we're backing founders who are tackling this challenge from several angles:
Blue-Collar Education and Upskilling: We're seeing exciting models that combine technology-enabled training with standardized processes to quickly bring new workers up to speed. Patric Hellermann describes one approach: "You pick a trade, radically standardize the process, and train people on exactly that process. Then you add software, train them radically on that software, and add other elements like how to found and run a company."This model doesn't just create workers - it creates entrepreneurs. By giving people the skills, tools, and business knowledge to start their own contracting businesses, we can attract a whole new demographic to the construction industry.
Cross-Border Labor Sourcing: With many developed countries facing aging populations and shrinking workforces, tapping into global labor pools is crucial. We're investing in platforms that ethically and compliantly connect skilled workers from other countries with job opportunities in Europe and North America.Patric notes: "We're looking for cross-border models to help aspirational workers from countries like India, or the Latin America to Spain corridor, or the North Africa to Europe corridor, in an ethical and compliant way."
Labor-Productivity-Enhancing Technologies: While we're bullish on robotics, we're also excited about technologies that augment human workers rather than replace them. This includes things like exoskeletons that reduce physical strain, AR/VR systems for training and on-site guidance, and IoT-enabled tools that track and optimize performance.
Labor Process Standardization and Modularization: By breaking complex construction tasks into standardized, repeatable modules, we can make it easier to train new workers and improve overall efficiency. This approach also opens the door to more prefabrication and off-site construction, which can help mitigate on-site labor shortages.
One area we're particularly excited about is the intersection of education and entrepreneurship. By creating pathways for workers to start their own specialized contracting businesses, we can address several issues at once. We're giving people a compelling reason to enter the construction industry, creating a new generation of innovators and business owners, and developing a more resilient, distributed network of skilled labor.
Adam Zobler emphasizes the importance of this approach: "How do you get around [the labor shortage]? How do you build on-ramps?" By lowering the barriers to entry and providing clear paths for advancement, we can make construction careers more attractive to a wider range of people.
We're also keeping a close eye on how technology can help extend the careers of experienced workers. While full automation of complex construction tasks is still a ways off, there are many opportunities to use technology to reduce physical strain and leverage the expertise of veteran workers in new ways.
Adam also muses on one possibility: "I always thought the intermediate step of full-scale robotics would be maybe exoskeletons. Especially for alleviating [the strain on] retirees - if you can squeeze out a couple more years of their professional arc, that would be really interesting."
The labor challenges facing the construction industry are daunting, but they also represent a massive opportunity for innovation. We believe the companies that can successfully address these issues - whether through training, technology, or novel labor models - will be among the most valuable in the AEC space in the coming decades.
At Foundamental, we're committed to backing founders who are reimagining how we build, train, and deploy the construction workforce of the future. It's not just about solving a labor shortage - it's about creating a more skilled, efficient, and entrepreneurial construction ecosystem.
Collaboration
The future of AEC tech is collaborative, cloud-native, and AI-enhanced. We're backing platforms that break down silos and enable seamless workflows across disciplines.
The architecture, engineering, and construction (AEC) industry is fundamentally collaborative. Every project, from a simple home renovation to a massive infrastructure development, requires the coordination of multiple disciplines, stakeholders, and workflows. Yet the technology stack underpinning this collaboration is woefully outdated, still relying on siloed desktop applications and clunky file exchanges.
At Foundamental, we believe the next wave of AEC tech innovation will be defined by truly collaborative platforms that break down these artificial barriers and enable seamless workflows across the entire building lifecycle.
Patric Hellermann paints a picture of the current state: "Most of the authoring tools, I mean, sorry, they look like we just left MS-DOS and we now moved into Windows 95. That's what it looks like." This isn't just an aesthetic issue - it's a fundamental limitation on productivity and innovation in the industry.
We're excited about several key trends in collaborative AEC tech:
Cloud-Native Platforms: The future of AEC software is in the cloud. We're backing companies building browser-based tools that enable real-time collaboration from anywhere, on any device. This isn't just about putting existing software on a server - it's about reimagining workflows for a connected, always-on world.
Interoperability and Data Standards: The fragmentation of data across different tools and disciplines is a massive hindrance to collaboration. We're investing in companies building the connective tissue between different AEC software, enabling seamless data flow and reducing costly errors and rework.
AI-Enhanced Design and Engineering: Machine learning and artificial intelligence are poised to revolutionize AEC workflows. We're looking for platforms that leverage AI to automate repetitive tasks, provide design suggestions, catch potential issues early, and enable more informed decision-making throughout the project lifecycle.
Democratized Access to Advanced Tools: Historically, many powerful AEC tools have been limited to specialists due to their complexity and high learning curves. We're excited about companies making advanced design and engineering capabilities accessible to a broader range of professionals through intuitive interfaces and AI assistance.
Digital Twins and Simulation: As the lines between physical and digital blur, we see enormous potential in platforms that create detailed digital representations of built assets. These "digital twins" enable better collaboration, predictive maintenance, and ongoing optimization of buildings and infrastructure.
Adam Zobler emphasizes the importance of lowering barriers to entry: "Decreasing the bar to let everyone actually participate in automation, participate in AI - that's what this technology really does." By making powerful tools more accessible, we can unlock creativity and innovation across the entire AEC ecosystem.
One of our key investments in this space is Speckle, which is building a data infrastructure layer to enable seamless interoperability between different AEC software tools. Patric explains the vision: "Making Martin work in his software, Owen in his software, Adam in his software, and me in my software - and they're all different software vendors, and we're all working on the same model with each other - it's just not a thing. It doesn't exist." Speckle is changing that, creating a foundation for truly collaborative workflows.
We're also excited about companies like Snaptrude, which are building intuitive, browser-based design tools that enable real-time collaboration. These platforms are not just making existing processes more efficient - they're enabling entirely new ways of working that were previously impossible.
The shift to collaborative, cloud-native platforms isn't just about technology - it's about changing the culture of the AEC industry. Shub Bhattacharya notes:
"Young architects or engineers, when they go into industry and see how clunky the whole process is of designing things, they just move away."
By backing more intuitive, collaborative tools, we're not just improving efficiency - we're making the industry more attractive to the next generation of talent.
We believe that the most successful AEC tech companies of the future will be those that seamlessly integrate different disciplines and stages of the building lifecycle. This means breaking down the artificial barriers between design, engineering, construction, and operations, creating a continuous digital thread that runs from initial concept through the entire life of a built asset.
Patric sums up our vision: "The biggest improvements that you can make is actually the collaborative side to it. The desktop-based versions now transitioning into cloud, they are still not browser-based, they still require you to make certain installs, they still require you to run a certain rig and certain hardware. They definitely don't let you edit anywhere on the mobile phone."
At Foundamental, we're committed to backing the founders who are building these next-generation collaborative platforms. We believe these tools will not only make the AEC industry more efficient and productive but will also enable new forms of creativity and innovation that we can hardly imagine today.
The future of AEC is collaborative, cloud-native, and AI-enhanced. We're excited to be at the forefront of this transformation, investing in the companies that are reshaping how we design, build, and operate our built environment.
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Ep. 5: Singularities
tl;dr
Irreversibility: We're focused on enduring mega-shifts in construction, from labor shortages to grid infrastructure needs. These irreversible trends drive our investment thesis.
Robotics: On-site robotics is revolutionizing construction, tackling labor issues while creating new distribution models. We're backing founders in this high-potential space.
Design: The AEC design stack is overdue for disruption. We're investing in startups bringing real-time collaboration, cloud-native tools, and AI to modernize industry workflows.
Labor: The construction labor crisis demands innovative solutions. We're backing upskilling platforms, cross-border sourcing, and technologies that multiply workforce productivity.
Collaboration: The future of AEC tech is collaborative, cloud-native, and AI-enhanced. We're investing in platforms that break down silos and enable seamless workflows across disciplines.
Crafted Proudly In Partnership With Bricks & Bytes
This video and associated content was produced alongside Bricks and Bytes. Please support the amazing work they are doing for the AEC founder community by visiting their full Super Series page here.