#constructiontech
CONSTRUCTION TECH
Examining how the multi-trillion dollar construction industry is being
reshaped by technology
#constructiontech
The technology market
intelligence platform.
CB Insights software lets you predict, discuss, and
communicate emerging technology trends using data
in ways that are beyond human cognition.
www.cbinsights.com
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#constructiontech
www.cbinsights.com
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See what other customers have to say at http://www.cbinsights.com/customer-love
A FEW OF OUR HAPPY CUSTOMERS
The most publicly reference-able customers of anyone in the industry
Pat Grady
Sequoia Capital, Partner
"Think of the fundamental value chain of venture
capital If we play the clock forward, the finding
and assessing of investments will be almost entirely
done by technology, not human beings. And the
company that is today positioned to be the market
leader in that evolution is CB Insights."
#constructiontech
Nikhil Krishnan
@nikillinit
nkrishnan@cbinsights.com
www.cbinsights.com
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ABOUT THE LEAD ANALYST
Research Analyst, CB Insights
Focuses on Healthcare, Consumer Packaged Goods, Industrials,
and VC Trends
Published research and data analysis have been featured in The
New York Times, Wall Street Journal, Financial Times, Bloomberg,
and CNBC, among other major media outlets.
Graduate of Columbia University
#constructiontech
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What Is Construction Tech?
Macro Trends
Private Market Activity
Role Of Corporates
Caterpillar Case Study
Business Models, Approaches, and Trends
Emerging Technologies
www.cbinsights.com
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TABLE OF CONTENTS
#constructiontech
What are we analyzing in
Construction Tech?
We'll be analyzing how private companies are
changing the design, process, and execution of
construction projects.
Private market funding data will be focused on
companies that use technology as a key differentiating
point where construction is the primary use case.
www.cbinsights.com
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#constructiontech
Construction Tech:
MACRO TRENDS
www.cbinsights.com
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#constructiontech
TRUMP INDICATES HE'S SERIOUS ON
INFRASTRUCTURE SPENDING
November 29, 2016
INFRASTRUCTURE IN THE SPOTLIGHT
www.cbinsights.com
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#constructiontech
Spend into construction has rebounded to pre-recession highs,
hitting $1.1 trillion levels in 2016
www.cbinsights.com
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FRED
CONSTRUCTION SPEND HAS REBOUNDED
#constructiontech
Construction is expected to see a boom, yet we're already seeing record lows of unemployment in
construction. This could suggest a labor shortage in the construction market.
www.cbinsights.com
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FRED
CONSTRUCTION UNEMPLOYMENT AT LOWS SIGNALS
POSSIBLE LABOR SHORTAGE
#constructiontech
CONSTRUCTION IS ONE
OF THE LEAST
DIGITIZED SECTORS
Construction is towards
the bottom when it
comes to digitization,
with only agriculture and
hunting falling beneath it.
Many of these areas are
less complex and could
reduce the cost of
services if automated
(eg., transactions,
business processes,
etc.).
www.cbinsights.com
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McKinsey
#constructiontech
Tracy Young
CEO, PlanGrid
www.cbinsights.com
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Construction Dive
"When we look at all industries and sectors, by and
large, everyone has figured out how to use software
and computing power to be more effective. When
you look at construction, we're spending less than 1%
of revenues on software while our counterparts in
aerospace and manufacturing are spending closer to
3.5% to 4.5%. Over the last 20 years, everyone else has
figured out how to be twice as productive while
construction has not only flatlined but declined."
#constructiontech
PEOPLE ARE LOOKING
AT CONSTRUCTION +
TECHNOLOGY
Interest in technology
use within the
construction industry has
begun to increase
significantly.
CB Insights Trends mines a
massive corpus of media
articles to enable a data-driven,
real-time method to discover,
predict, and plot the arc of rising
expectations and excitement.
www.cbinsights.com
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CB Insights Trends
#constructiontech
Construction Tech Funding Trends:
DEALS, DOLLARS, ACTIVE INVESTORS
www.cbinsights.com
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#constructiontech
Global equity funding since 2012:
$778 MILLION
across
165 DEALS
www.cbinsights.com
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#constructiontech
CONSTRUCTION TECH
STILL SLOW
While 2015 and 2016
have seen more deal
activity than previous
years, the area as a
whole hasn't seen too
much activity compared
to other tech sectors.
2015 saw a funding spike
thanks to large rounds to
Procore, PlanGrid, and
OnShape.
www.cbinsights.com
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CB Insights
#constructiontech
www.cbinsights.com
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CB Insights
COMPANY
AMOUNT/ROUND
QUARTER
SELECT INVESTORS
$80M/Series D
Q3'15
Andreessen Horowitz,
New Enterprise
Associates, North
Bridge Venture
Partners
$76M/Private Equity
Q3'12
TA Associates
$50M/Series F
Q4'15
O'Connor Ventures,
Bessemer Venture
Partners
$40M/Series B
Q4'15
Founders Fund,
Sequoia Capital, Y
Combinator
CONSTRUCTION TECH: TOP DEALS
2012-2016YTD (as of 11/28/2016)
#constructiontech
DEAL SHARE INTO
CONSTRUCTION TECH
Deals into Construction
Tech indicate a
developing space. There
has been growth in early-
stage deal share, with
three-quarters of deals in
2016 YTD happening at
the seed or Series A.
There have also been
more mature companies
slowly raising Series C, D,
and E+ recently.
www.cbinsights.com
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CB Insights
#constructiontech
CONSTRUCTION TECH
HASN'T SEEN MANY
EXITS
Despite the fact that the
number of Construction
Tech exits has been
increasing, overall the
space has seen relatively
few liquidity events.
www.cbinsights.com
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CB Insights
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5
6
8
9
1
1
2012
2013
2014
2015
2016
CONSTRUCTION TECH EXITS
M&A
IPO
2012 - 2016 YTD (11/28/2016)
#constructiontech
THERE HAVE BEEN
SOME LARGE EXITS
There have been several
$500M+ exits in the
space, all of which
happened this year.
There are also publicly
traded Construction Tech
companies with
multibillion dollar market
caps like Trimble and
Autodesk.
www.cbinsights.com
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CB Insights
Acquired by Ritchie Bros.
Valuation: $758.5M
Acquired by Oracle
Valuation: $663M
IPO
Valuation: $321.9M
Acquired by Roper Technologies
Valuation: $663M
#constructiontech
NUMBER OF UNIQUE
INVESTORS RISES AND
FALLS
While the number of
unique investors
participating in
Construction Tech has
seen some volatility,
2015 saw a peak of 87
unique investors. 2016
seems to be sustaining
the same level of
interest, with 79 unique
investors through 11/28.
www.cbinsights.com
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CB Insights
35
69
46
87
2012
2013
2014
2015
YEARLY UNIQUE INVESTORS INTO CONSTRUCTION TECH
# of Unique Investors
2012 - 2015
#constructiontech
MOST ACTIVE
INVESTORS
Few investors have 5 or
more Construction Tech
companies in their
portfolio. The only two
that do are both
accelerators. Some
funds are being raised
with a focus on real
estate, construction, and
design (eg., Brick &
Mortar Ventures). There's
also a notable absence
of corporates investing.
www.cbinsights.com
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CB Insights
#constructiontech
Construction Tech:
THE ROLE OF CORPORATES
www.cbinsights.com
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#constructiontech
CORPORATES SHOW
LITTLE INTEREST IN
CONSTRUCTION TECH
Compared to other tech
industries which typically
see 20% or more
participation in deals,
Construction Tech has
yet to break 16%. Google
Ventures was the only
corporate to make
multiple bets in
Construction Tech since
2012.
www.cbinsights.com
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CB Insights
88%
84%
86%
87%
84%
13%
16%
14%
13%
16%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012
2013
2014
2015
2016
CORPORATE PARTICIPATION IN CONSTRUCTION TECH
DEALS
2012 - 2016 YTD (11/28/16)
No Corporate Participation
Corporate Participation
#constructiontech
CONTRACTORS
ACQUIRE FOR MARKET
SHARE
Large contractors in the
construction space
typically acquire
consultancies and other
engineering/design
firms. Several have made
acquisitions or
investments in the
energy space as well.
www.cbinsights.com
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CB Insights Business Social Graph
#constructiontech
SOFTWARE
INCUBMENTS ARE
MORE ACTIVE
Incumbents in the
software construction
space are much more
active, with more than
119 transactions since
2010 between 6 firms.
Autodesk was the most
active and also has its
own venture arm.
www.cbinsights.com
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CB Insights Business Social Graph
#constructiontech
CONSTRUCTION
PRODUCT COMPANIES
ARE ALSO MARKET
SHARE FOCUSED
Companies focusing on
construction products
also tend to invest or
acquire companies that
directly compete or are
involved in
compounds/additives to
improve their products.
However several have
set up active venture
arms including Posco
and Caterpillar.
www.cbinsights.com
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CB Insights Business Social Graph
#constructiontech
CORPORATES ALSO
PARTNER WITH
STARTUPS
Corporates don't just
invest or acquire
companies, but also
partner with private
companies for a variety
of reasons, from
sourcing potential
acquisition targets to
providing more
immersive training and
education.
www.cbinsights.com
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CB Insights
CONSTRUCTION CORPORATE PARTNERSHIPS
#constructiontech
Doug Oberhelman
CEO, Caterpillar
www.cbinsights.com
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Source: Equipment World
"Our business runs on uptime for our
customers. If we do it at a lower cost than our
competitors, we win
If we don't do this, somebody else will. We
decided that maybe we better disrupt
ourselvesin our own way before somebody
does an Uber to us."
#constructiontech
CATERPILLAR IS
RAMPING UP ACTIVITY
Caterpillar is ramping up
its activity in private
markets, including
setting up an active
venture arm. The
investments span a
broad range of sectors,
from autonomous
robots, to exoskeletons,
to energy distribution and
storage.
www.cbinsights.com
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CB Insights Business Social Graph
Jan 2010 December 2011
Jan 2015 October 2016
#constructiontech
CATERPILLAR HAS
INCREASED ITS
PATENT ACTIVITY
Caterpillar has noticeably
increased its patent
activity in 2014 forward.
This spike in filings
coincides with its ramp
up of activity in private
markets as well; several
patents coincide with
investments.
*Patent filing process involves a
significant time lag before the
publishing of applications. This delay
can range from several months to
over two years.
www.cbinsights.com
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CB Insights Patent Data
66
159
285
334
752
660
913
10
43
92
246
419
610
405
2010
2011
2012
2013
2014*
2015*
2016*
CATERPILLAR PATENTS OVER TIME
Number of Patents Published
Number of Patents Granted
2010 - 2016 YTD (11/28/2016)
#constructiontech
ANALYSIS OF
CATERPILLAR
PATENTS
Caterpillar's patents have
primarily been focused
on the actual parts of the
machines themselves.
One consistent focus
seems to be fuel across
the board.
www.cbinsights.com
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CB Insights Patent Data
OVERALL TOP PHRASES BY SIGNIFICANCE
2009 - 2016
2009
2010
2011
2012
2013
2014
2015
2016
hammer
truck
pump
fuel
fuel
hood
implement
plate
exhaust
wheel loader
actuator
valve
display
filter
machine
implement
module
treatment
wheel
valve
speed
position
component
ground
valve
cab
motor grader
circuit
truck
power
ground
track
hole
housing
grader
fluid
track
cylinder
implement
fuel
bracket
fluid
loader
seal
power
piston
position
housing
pressure
signal
motor
asphalt
transmission
operator
pressure
tip
side plate
treatment device
power
fuel
motor
tire
pump
valve
position
piston
hood
speed
position
plate
machine
implement
plate
first end
armature
rear portion
wheel
brake
ground
track
combustion
signal indicative
mount
fuel
motor
tank
control system
fluid
body
indicative
shovel
component
pressure
pressure
body
grille
bearing
fuel
passage
track
control system
plate
valve
body
chamber
second end
#constructiontech
ANALYSIS OF
CATERPILLAR
PATENTS
Caterpillar's patents have
primarily been focused
on the actual parts of the
machines themselves.
One consistent focus
seems to be fuel across
the board.
www.cbinsights.com
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CB Insights Patent Data
OVERALL TOP PHRASES BY SIGNIFICANCE
2009 - 2016
2009
2010
2011
2012
2013
2014
2015
2016
hammer
truck
pump
fuel
fuel
hood
implement
plate
exhaust
wheel loader
actuator
valve
display
filter
machine
implement
module
treatment
wheel
valve
speed
position
component
ground
valve
cab
motor grader
circuit
truck
power
ground
track
hole
housing
grader
fluid
track
cylinder
implement
fuel
bracket
fluid
loader
seal
power
piston
position
housing
pressure
signal
motor
asphalt
transmission
operator
pressure
tip
side plate
treatment device
power
fuel
motor
tire
pump
valve
position
piston
hood
speed
position
plate
machine
implement
plate
first end
armature
rear portion
wheel
brake
ground
track
combustion
signal indicative
mount
fuel
motor
tank
control system
fluid
body
indicative
shovel
component
pressure
pressure
body
grille
bearing
fuel
passage
track
control system
plate
valve
body
chamber
second end
#constructiontech
CATERPILLAR'S
INVESTMENT IN
UPTAKE HAS
RELEVANT PATENTS
Caterpillar is an investor
in unicorn startup Uptake
Technologies, which also
has a patent to monitor
the health of equipment
based on different
indicators.
www.cbinsights.com
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CB Insights Patent Data
#constructiontech
Construction Tech:
BUSINESS MODELS AND APPROACHES
www.cbinsights.com
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#constructiontech
HARD OR SOFT COSTS?
www.cbinsights.com
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TheRealDeal
#constructiontech
PLACEMENT IN THE
PROJECT LIFECYCLE
Understanding the points
in the construction
process can help sort
who the buyers of
software/products are
and the specific pain
points that they're
solving.
www.cbinsights.com
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Design
Procurement
Construction
Operations
#constructiontech
www.cbinsights.com
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REPLACE
CREATE
ENABLE
REPLACE, ENABLE, OR
CREATE
Do the companies
replace a part of the
existing process, enable
workers in different parts
of the chain to be more
efficient, or create
entirely new workflows
that did not exist before?
#constructiontech
DESIGN TOOLS
Design software and
tools focused earlier in
the project lifecycle
generally make designers
more efficient. Some
also create new
processes for them by
providing additional
insight or design
possibilities they may not
have had before.
www.cbinsights.com
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CB Insights
DESIGN TOOLS
#constructiontech
PROJECT
MANAGEMENT
SOFTWARE
Software that helps
monitor a project from
start to finish as well as
create a centralized area
of information for all
stakeholders across the
process.
www.cbinsights.com
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CB Insights
PROJECT MANAGEMENT SOFTWARE
#constructiontech
EQUIPMENT
MARKETPLACES
Marketplaces for
equipment to help with
the procurement of
machinery for projects,
typically simplifying the
process for both sides of
the market.
www.cbinsights.com
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CB Insights
EQUIPMENT MARKETPLACES
#constructiontech
ROBOTICS AND
DRONES
Robots and drones can
both replace certain
parts of the construction
process as well as create
new processes that
didn't exist before (eg.,
Drone operating and
analysis).
www.cbinsights.com
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CB Insights
ROBOTICS AND DRONES
#constructiontech
THE DISTRIBUTION OF
CONSTRUCTION
PRODUCTS IS ALSO
CHANGING
Construction products
are also finding new
points of sale and
distribution methods that
are closer to the end
customers (removing
nodes in the supply
chain).
www.cbinsights.com
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CB Insights Blog
#constructiontech
TREND 1:
DEMOCRATIZATION
Tech provides
advantages to smaller
construction players by
lowering costs of large
capital expenses,
creating pricing
transparency, providing
more avenues to market
services, offering
verification for goods &
services, and making the
construction business
less reliant on
relationships alone.
www.cbinsights.com
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British Columbia Law Institute
#constructiontech
TREND 1 (CONT.):
DEMOCRATIZATION
Democratization means
focus shifts to the
individuals/smaller
players. To avoid longer
sales cycles of larger
construction firms, many
startups focus on small
businesses and move
from the bottom up (a
similar tactic we've seen
in other tech verticals,
such as Slack).
www.cbinsights.com
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TOP DOWN
BOTTOM UP
#constructiontech
TREND 2:
AGGREGATION
By providing user-friendly
and simplified
experiences, users flock
to new Construction
Tech startups, which in
turn allows the platform
to have better
negotiating power when
dealing with the supply
side and creating
standardization where it
didn't exist before.
www.cbinsights.com
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Houzz
#constructiontech
TREND 3:
STANDARDIZATION
AND SCALABILITY
As more of the
construction process is
standardized, it becomes
easier to scale up the
goods and services and
scale down the costs.
This can be anything
from standardizing
process (like getting
permits) to standardizing
parts (prefab houses)
and more.
www.cbinsights.com
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#constructiontech
TREND 4: MOBILE SEES
STRONG FOOTING IN
CONSTRUCTION
The number of mobile
users in the construction
industry is increasing,
especially in field-related
use cases. Increasingly
more people within the
industry see mobile as an
important capability.
www.cbinsights.com
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JBKnowledge
#constructiontech
TREND 4 (CONT.):
MOBILE FINDS STRONG
FOOTING IN
CONSTRUCTION
Since much of the actual
construction process is
done in the field, mobile
devices and tablets have
played a key role here
with several companies
going "mobile-first."
www.cbinsights.com
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CB Insights
MOBILE-FOCUSED CONSTRUCTION TECH COMPANIES
#constructiontech
Construction Tech:
EMERGING TECHNOLOGIES
www.cbinsights.com
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#constructiontech
DAQRI BRINGS 3D VISUALIZATION TO THE
CONSTRUCTION SITE WITH AUGMENTED
REALITY SMART HELMET
Jan 27, 2016
AUGMENTED REALITY
www.cbinsights.com
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#constructiontech
PREFAB HOUSING SEES
RENEWED INTEREST
While Prefab housing is
not a new concept, new
players are seeing
investor interest with
some focusing on more
specific niches (smart
home, sustainability, etc.)
www.cbinsights.com
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CB Insights
#constructiontech
PREFAB HOUSING HAS
MULTIPLE USE CASES
Separate use cases in
prefab housing could
appeal to different
demographics. Cheaper
building costs for more
affordable housing as
well as "house-in-a-box"
ease of setup for higher-
end homes. This could
drive demand in areas
that lack affordable
housing as well as in
more developed areas.
www.cbinsights.com
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NY Daily News, Blu Homes
WORLD HOUSING
NON-PROFIT CAMPAIGN
BUILDING $3000 PREFAB SHACKS
BLU HOMES
LUXURY EDITION
OFFERS $1.3M PREFAB HOMES
#constructiontech
THE RETURN OF 3D-
PRINTING?
3D printing is seeing a
resurgence of interest,
especially in the
construction and
industrial areas.
www.cbinsights.com
54
CB Insights Trends
#constructiontech
DEVELOPMENTS IN 3D
PRINTED MATERIALS
Much of the interest
could be attributed to
developments that have
happened in the actual
materials themselves,
many of which can be
used to create highly
customized or precise
parts.
www.cbinsights.com
55
i.materialise
#constructiontech
AUTOMATED
CONSTRUCTION
Parts of the construction
process that are
predictable and repetitive
are seeing automation
along with machine-
based advantages (faster
project times, higher
precision, etc.)
www.cbinsights.com
56
McKinsey
#constructiontech
ROBOT USE IN
MANUFACTURING
SCENARIOS WILL
TRANSFER
Many of the functions we
see robots being used for
are primarily
manufacturing use
cases. Developments in
material handling and
shaping could benefit
work on sites as well.
www.cbinsights.com
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Statista
6%
7%
9%
10%
26%
33%
66%
Automotive OEMs
Metals
Coating & Dispensing
Life Sciences
Spot Welding
Material Handling
Automotive Components
GROWTH IN NORTH AMERICAN INDUSTRIAL ROBOT SALES TO END-
MARKETS
Q1 2015, BY CUSTOMER SEGMENT (OVER SAME PERIOD ONE YEAR BEFORE)
#constructiontech
THESE TRENDS COULD
POINT TO ON-SITE
TEMPLATED
CONSTRUCTION
When we take these
trends together, we could
start to see preformatted
houses that are built on-
site through a
combination of 3D
printing and robotics,
making scalable and
affordable temporary
housing.
www.cbinsights.com
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RT
#constructiontech
QUESTIONS?
www.cbinsights.com
59
@nikillinit
nkrishnan@cbinsights.com
#constructiontech
Where is all this data from?
The CB Insights platform has the details on all the
deals included in this report
www.cbinsights.com
60
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#constructiontech
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