Venture capital, also known as VC, is a financial tool for companies and a vehicle for institutional investors to participate in emerging businesses.
Therefore, it is an opportunity for new companies to secure funding, strengthen their business models, and/or explore new markets by receiving money in the short-term. As is usually the case, venture capital investors tend to have a purely economic motive and will have a negotiated participation with the new company or startup.
Venture capital firms raise capital to create investment funds, used to invest in both early and mature stage startups depending on the specialization of the firm – although VCs do not necessarily always pay attention to the stage of the company at the time of closing the investment. For VCs it is very important to have good performance measures, especially financial, in order to see the level of development of the company.
Corporate venture capital, also known as CVC, is the practice where corporate entities test, accelerate or invest directly in external startups to pursue innovation and strategic returns.
Often, startups will approach these corporations to test their technologies, initiate new collaboration agreements for the development of their business models, obtain new clients, or raise capital.
Another key benefit of corporate venture capitals is their ability to help startups expand into new markets and connect them to the network of collaborators and clients of the parent corporation.
We also see support in collateral disciplines: from legal teams, communication and marketing services, or access to facilities, among many others, to provide a complete service tailored to the particular needs of each party.
As Cemex’s corporate venture capital, we aim to be the eyes of Cemex abroad, providing the company with new technologies and business models that will allow us to innovate in our offerings to customers and respond to the major challenges in the sector. Meanwhile, we leverage our position as one of the major players leading the revolution of the construction industry.
Innovation in any industry is not possible without collaboration, which is why the ow of solutions is developed with innovation leaders in the industry.
We connect fellow investors with entrepreneurs and work jointly with the startups.
We develop and enhance solutions that respond to the current needs of the construction industry.
The main objective of a corporate venture capital is to provide the parent company with new technologies and solutions that allow it to advance its strategy and position in the market.
Contrary to venture capitals, corporate venture capitals not only pay attention to the economic return. CVCs also prioritize certain information or strategic advantages that startups can provide them with, either within the market segment where they already operate or a new one.
Startups in search of support approach these two vehicles looking for benefits based on the stage they are in (i.e., early stage, commercialization stage, etc.). During the initial conversation, both parties must evaluate the service-offering and agree on how to make the collaboration tangible.
With the objective to collaborate with the most promising startups, the most common offer found among CVCs is:
Startups rely on this collaboration model in order to grow, strengthen their business models, or expand their solutions to other geographies.
Although it may seem like a new concept and frighten companies that have not yet approached innovation, the only thing that is new about corporate venture capital is the speed at which it has taken off in the last decade. More and more companies are setting up vehicles of this type and becoming more agile in testing new solutions and tapping into the entrepreneurial drive, innovation mindset, and fresh vision that startups bring.
Forbes states that startups looking to partner with corporate venture capital units should look for companies that allow them to test their solutions quickly and leverage their large customer base, where investors take on the role of the leader, forging initial introductions. For CVCs that are part of international institutions, these crucial connections are not only personal and customized, but also global.
The construction industry is no exception, despite being one of the sectors most lagging in technology adoption and innovation. Arguably, the industry is entering into a new revolution thanks to numerous agreements and alliances, collaboration between large companies, and the confidence to invest in new business models.
Just like previous industrial and technological revolutions, has the Contech (construction technology) revolution begun? We say YES. Investment in this area has been booming in recent years and it is largely thanks to venture capital and corporate venture capital vehicles, the key emerging players in the sector.
$5.4 billon USD invested in startups
240 deals for construction startups
75% investment took place in North America
For Cemex Ventures, driving the construction revolution is more than investing; we are committed to building a journey to success together with hundreds of startups.
Cemex Ventures offers the startups it works with the opportunity to connect directly with a leading company in the building materials industry.
For Cemex Ventures, driving the construction revolution is more than investing; we are committed to building a journey to success together with hundreds of startups.
By investing strategically in startups and tailoring our approach to meet their particular needs, we ensure that our offering is mutually beneficial and that we can help emerging businesses develop their solutions regardless of what stage they are at.
We invest and collaborate with entrepreneurs to enhance their solutions and connect them with our network, investors, and experts.
As their open innovation unit, we identify the solutions with most potential and choose to invest in them or collaborate in their development.
We connect fellow investors with entrepreneurs and work jointly with the startups.
We develop and enhance solutions that respond to the current needs of the construction industry.
In 2021, investment in ConTech reached its highest ever with $5.4 Billones USD Invested in startups With solutions fore the construction sector, almost $3Billion USD more than what was reported the year before. This figure consists of nearly 240 transactions for construction startups 85% more than in 2020. 75% of what was invested during 2021 was in North America followeb by 11% in Europe and 7% in Asia-Pacific.
Since the launch of Cemex Ventures in 2017, Cemex’s corporate venture capital and open innovation arm, we have focused on startups in the ConTech ecosystem that operate in one of our four focus areas. These areas narrow down the main challenges facing the industry, and are where we seek to bring innovative solutions, promoting a collaborative environment with key decision makers to drive the construction industry revolution together.
Since 2017, we have seen a significant increase in companies within the industry betting on startups and their new solutions. When we started on this path, the number of companies investing in construction startups was barely 10, and five years later, the investor ecosystem has grown to almost 50. In fact, in 2021 many companies had more than 20 projects in their investment portfolios, and in 2022 this number is expected to grow.
In 2021 63% of investments in construction startups sought to optimize productivity in construction projects and on project sitesfollowed by solutions to improve the supply chain and the technologies we believe to be the future of construction (such as the use of robotics, modular construction, and advanced construction methods)
Investment in construction startups with a focus on sustainability remained in fourth place behind the other areas. So, could we be talking about a new marriage between CleanTech and ConTech?
Given the immediate need to reduce the industry’s effect on climate change, the Green Construction vertical is expected to see a strong growth in emerging solutions as well as new investments. Just as this vertical cuts across many industries, the ConTech sector is betting heavily to include it in its daily operations.
