Zacua Ventures closes $56m fund to invest in next-gen construction tech startups

Zacua Ventures closes $56m fund to invest in next-gen construction tech startups

Published: 28-02-2024 14:32:00 | By: Pie Kamau | hits: 2132 | Tags:

Zacua Ventures, a global venture capital fund focused on early-stage technology for the construction industry, announced the close of its $56 million inaugural fund. In conjunction with the fund close, Zacua also announced it recently led a $9-million seed round for data infrastructure startup Flexnode.

Zacua’s fund is unique among early-stage VC funds because of its large group of corporate Limited Partners (LPs), which includes 19 companies from across the globe with ties to the construction sector. Participants in the fund include Procore, the leading global provider of construction management software, Volvo, a manufacturer of trucks, buses and construction equipment, and sustainable construction materials company Cemex. Due to strong investor interest, Zacua’s fund, which was initially targeting $50 million, surpassed its initial fundraising target by more than 10%.

Vivin Hegde, Co-founder and Partner, Zacua North America: ''While recent macroeconomic headwinds posed challenges to venture funding this past year, investment in construction technology remained comparatively stable, driven largely by a pressing need for tech-enabled efficiency in the historically slow-to-evolve construction space. Common construction pain points like a lack of skilled labor and materials inflation can be effectively addressed with the right technological tools. Our mission at Zacua is to drive innovation and ultimately create a better, more efficient, and more sustainable construction process for buildings and infrastructure projects alike.''

Zacua was established in 2022 by a team of venture capital, technology, and construction experts with experience at Cemex Ventures, McKinsey and Company and Hilti Corporation and a combined 30 years of industry experience. Zacua aims to allocate its recently closed fund across startups that address at least one of three primary investment themes: productivity, sustainability, and urbanization. Respectively, startups in those buckets will enhance efficiency in the construction industry; reduce the carbon footprint of construction and building operations more broadly; and contribute to the development of resilient, intelligent structures that are ideally equipped to serve the cities of the future.

Mauricio Tessi Weiss, Co-founder and Partner,  Zacua EU and LatAm: ''The construction/building sector is a massive culprit when it comes to greenhouse gas emissions, producing 40% of total emissions worldwide. A major portion of our efforts will focus on technologies that address decarbonization priorities, but we will also be focused heavily on backing companies that solve pressing issues like supply chain disruption, the affordable housing crisis, and improving the safety and efficiency of the built environment.''

Operating globally in North America, Europe, and Asia, Zacua Ventures has access to cutting-edge technology worldwide, enabling it to invest in the most impactful solutions in sustainability, robotics, digitization, and more. Leveraging the network of its LP base and the internal team’s robust understanding of both the construction and investment landscapes, Zacua Ventures is uniquely positioned to act as a bridge between startups and corporate investors, unlocking new possibilities for collaboration and growth.

Since the launch of its fund, Zacua Ventures has invested in early-stage rounds for more than a dozen startups across the construction technology ecosystem, making it one of the world’s most active construction VCs in that timeframe.

Juan Nieto, Founding Partner, Zacua Ventures: ''In addition to the benefits we leverage from our relationship with our LPs, we also have a competitive advantage because of the diverse markets in which our principals and investment teams operate. Each pocket of the globe -  Asia, Europe, North America, Latin America,  is leading the way in different sub-sectors of construction technology; innovation hubs for robotics and for sustainability technology are thousands of miles apart. With our access to all these different markets, we’re uniquely positioned to play a major role in driving the evolution of the construction process.''

Zacua recently served as the lead investor in digital infrastructure company Flexnode’s $9-million seed funding round, investing in the company alongside Yes VC, Arup, SHoP Architects, and JE Dunn.

Founded by Andrew Lindsey and Robert Mazer in 2019, Flexnode is a leading-edge digital infrastructure company that is reimagining the built environment through bespoke and immersive design, efficient, DFMA-centric construction and advanced operation of high-performance, liquid-cooling enabled micro data centers. With a holistic, industry-first focus on bridging conceptual, customizable architecture with achievable, rapidly deployable engineering, Flexnode is disrupting data center build and deployment assumptions to deliver a new era of visionary micro data management solutions that empower AI and other dense, demanding next-gen applications in any environment.

In response to growing demands for a new breed of data center solution, Flexnode created a fully disassemblable modular data center product that is highly adaptable; designed with an eye toward ease of installation, Flexnodes can fit into a typical freight elevator. By facilitating liquid cooling, Flexnode also significantly decreases the energy consumption of its data centers. Because of this powerful solution, Flexnode has not only partnered with some of the leading real estate companies in the world, but also received a Department of Energy Advanced Research Project Agency (ARPA-E) innovation award of $3.5 million for continued research and development.

Andrew Lindsey, Co-founder and CEO, Flexnode: ''A decade ago, the prevailing belief was that the cloud would dominate the future of data storage. However, the last few years have demonstrated that local data infrastructures are often preferable for reasons relating to speed, sustainability and regulation. Our product offers bespoke solutions tailored to the specific requirements of each client. This capability involves a deep understanding of varied client needs, from the architectural design to the operational specifics, and comes with our deep dedication to ushering in a new kind of data center procurement and consumption experience that challenges outmoded methods and results. We’re grateful for the support of Zacua Ventures, and we look forward to using this latest capital injection to further refine and scale our product offerings.''