The most exciting venture capital opportunity by sector surrounds you daily.
The built environment is one of the world’s largest asset classes ($40 Trillion in the US) and contributors to growth and GDP (4% of GDP in the US). It’s also the second least digitized sector in the world according to McKinsey. You may know built environment technology by different names: PropTech, ConstructionTech, or ClimateTech. How we define it: technology that is innovating how we develop, design, build, and operate the world’s physical infrastructure.
In this report Shadow Ventures make the case for why family offices should pay close attention to the low hanging opportunity in venture to find undervalued venture opportunities and advance one of the most important industry in the world.
I. The Macro Forces For Investment
It’s behind- According to McKinsey, the built world is the 2nd LEAST digitized sector in the world.
It’s big – The average annual spend on the built world in the US is $1.4TN, representing 4% of US GDP.
It’s wasteful – #1 Contributor to Greenhouse Gases into the environment
Limitless Horizontal Application – FinTech, SaaS- Enterprise Software, Big Data, IoT, AI-ML, Robotics
II. Undervalued and Non-consensus
Our industry supports solving zero-to-one problems, not marginal improvements on existing stacks. It is early days, with few investors paying close attention which means realistic valuations.
III. What is Built Environment Technology?
IV. Industry Trends and Predictions: Innovation to Save the Planet
Why Now?
Sector trends in Climate Tech
COVID-19’s continued impact
Our predictions
Climate Tech Landscape
Nascent Market Opportunity
The $40 Trillion Built World Executive Summary The ecosystem that supports the Built World (real estate, construction, architecture, and engineering) represents one of the largest untapped markets for technology in the world. These markets have generally been slow to adopt technology due to the high degree of fragmentation. That is, it generally takes 50+ entities to execute on a single building. This fragmentation creates a void of innovation, new technology, technology integration capability and technology leadership. Due to multiple shifting macroeconomics factors, fragmentation is receding and, as a result, resistance to widespread technology adoption is lifting. Now, generalist mainstream capital has recognized the market opportunity, creating a new source of exits and acquisitions for opportunistic investors with proven domain expertise. The Built World includes the following markets: • Real Estate (Retail, Office, Industrial, Multi-family) • Architecture • Engineering • Construction • Infrastructure & Capital Projects • Security • Utilities & Energy • Logistics, Transportation, & Distribution
Meet The Built World: A Laggard Market Ripe for Venture Capital Opportunity
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