🏗 Veni, Vidi, VINCI
French tech's heavy lift to displace the machinery of the Construction Industry
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Put on your hard hat, we're talking 👷🏼♀️ Construction (#ConTech). Here's the lineup:
Intro: Childlike Imagination
Mob Ties & Horny Guys
In(Vinci)ble
Concretely Speaking
Postscript: Building Inspection
Intro: Childlike Imagination
As a child, there tends to be an early fascination with how things work. The why behind everything. Perhaps that's why many kids develop an obsession with construction. For one, there are big machines, moving around materials, and creating something from nothing — possibly the most literal metaphor for how things get done. Lingering behind the physical construction, is the ever-present why (and how) that stimulates the imagination:
How did someone design that bridge? (architecture, engineering)
Why are we putting the bridge there? (public policy, zoning, trade)
Who pays for and maintains the bridge? (elected officials, law, taxes)
Are we sure the bridge is safe? There's a massive truck driving on it! (physics)
Construction is the clearest manifestation of our desire to build, create, improve, and design the world around us. It synthesizes several skill sets and crafts and quite literally constructs the world around us. It's no wonder some of the most popular children's TV programs involve construction workers.
But at a certain age, you grow up and take for granted your surroundings. Aside from the Village People and the occasional cat-call, you forget that "construction worker" is a job title. You take on a white collar career and construction becomes little more than an annoyance near your office building. Something that just gets taken care of by someone else. In reality, construction is an enormous industry with myriad moving parts and a global supply chain. The world-building never ends…
Today, we talk about the €2 Trillion European industry, Vinci, France's dominant multi-national, and where and how tech startups can bring software to a hardware-heavy vertical. To set a benchmark, here are some key figures surrounding European construction:
1% productivity gains over the past two decades (slower than manufacturing)
18 Million people are employed in construction
374 tons of demolition waste came from construction alone in 2020
Mob Ties & Horny Guys
Apologies in advance to any construction workers reading this article. I couldn't help myself. In the US, when you think of construction, there are two stereotypes that come to mind: the Mafia and sexual harassment in hard hats. While this may no longer be true (or at least, less true), there was a time when the Italian mob owned the construction business in New York City and toxic masculinity dominated the front lines of every public works project. But it's 2021 and times are different. Despite fewer gangsters and gropers, the industry has been particularly reluctant to adopt new technology. I'm not the first to observe this. Nicolas Colin wrote a piece last year titled "Why Construction has a Hard Time Eating Construction" in his newsletter, European Straits.
Construction executives aren't necessarily tech-phobic (although there is likely a hardware v software bias at play); rather, the trade itself is somewhat set in stone. High costs, long time horizons, complex, labor-intensive projects and relatively low margins lead to risk-aversion. Which makes sense: I'd rather invest in a new bulldozer or maintain equipment to ensure on-time delivery than implement software that may help increase project visibility. On top of that, lots of the physical processes (moving materials, mixing cement, digging holes) haven't changed all that much in decades -- how is some software going to change anything?
Yet even for holdouts like the construction industry, tech is inching their way towards a strong foundation. Companies like Procore ($PCOR NYSE) have built a cloud-based construction management platform supporting millions of projects in over 125 countries. There are venture capital firms like Cemex Ventures dedicated exclusively to the acceleration of #contech (construction tech) across sub-verticals like safety & sustainability, supply chain, productivity and new materials.
Combining my #contech research with knowledge of the #frenchtech ecosystem, it's become clear to me that there are three intersecting trends that make for some interesting startups located right here in France.
Connected Everything (Internet of Things)
The Prefabricated "PreFab" Movement
Sustainability & Ecological Construction
Not only is the French startup community equipped with the expertise, but they've got the gravitational pull of Vinci, the 2nd biggest construction company on the planet, to help with testing, experimentation, and feedback. Vinci not only serves as a mentor for the burgeoning #contech industry in France but as a great primer on the business and history of construction itself.
In(Vinci)ble
A company of this magnitude deserves an entire deep-dive to unpack the history, leadership, and market-leading strategy. I discovered a chronological history of the company, saved thanks to the internet archive known as the Wayback Machine which chronicles their milestones along with important events that took place in those respective years. The original founding of Vinci (then called Société Générale d’Entreprises S.A. or SGE) took place in 1899, the same year that Marconi invented the wireless signal, a precursor to the radio. In it's 100+ year history, the company has been involved in constructing some noteworthy and highly visible projects including Montparnasse in Paris, The Stade de France, and the Chunnel.
In 2000, they merged with Groupe GTM and officially became Vinci. That same year, the Paris, Brussels and Amsterdam stock exchanges merged to form Euronext, the stock exchange where Vinci is currently listed as one of the Euronext Top 100 (an index similar to the S&P 500) among other notable companies including L'Oreal, Michelin, and Danone.
As you can see, the company is a behemoth with over 200K employees and €43B in revenue. Over the years, they've sub-divided (in some cases via merger/acquisition) the company into three primary categories: concessions (government contracts), real estate and general contracting. This is further subdivided across highways, airports, residential buildings, energy and general construction. The general contracting business generates by far the most revenue, representing roughly 85% of annual turnover. Aside from its impressive scale, there are two trends mentioned in their annual report that are quite telling and just so happen to align with recurring objectives I've encountered in the French Tech ecosystem.
The first, is the fact that revenue share coming from outside of France is increasing, namely in North America. Exporting French Tech internationally is a common theme here and something we've discussed explicitly in a previous article on Digital Sovereignty.
The second is an emphasis on green construction. Buildings account for 6% of carbon emissions worldwide (if this interests you, read Bill Gate's How to Avoid a Climate Disaster or start here) as global perception of the climate crisis evolves, it's important that we identify innovative paths forward to reduce our footprint and bake sustainability into our business models. No one is more poised to do so than tech startups, and specifically the startups in France, a stronghold for climate activism with 90% of the population believing human activity is responsible for the problem (compare that to 52% in the US!).
There are several construction tech companies that I could write about today. I want to focus on one for it's embodiment of the core principles for the future of construction and for its unique and innovative approach to building.
Concretely Speaking
Everyone had that friend who was obsessed with 3D printing. For me, it was a college housemate who built a 3D printing company in the attic during our senior year (circa 2013). 3D printing was one of those trends that had a peak hype cycle before the technology had really matured to a point that the futuristic implications were inevitable. For the most part, I ended up with some polymer paper weights frantically printed overnight by said housemate to prepare for a pitch competition.
While the 3D printing hype may have quieted, the revolution never died. In fact, industrial scale 3D printing has advanced quite a bit and people like Elon Musk see it as a core component of building a space-faring civilization on Mars. But in the present, there is a unique application for this technology that has practical applications here on Earth and for the construction industry at large. I'm talking, of course, about XtreeE.
XtreeE is creating the first 3D Printing-as-a-Service platform for the construction industry with hopes of driving productivity while reducing waste, time and costs associated with building. By combining robotics, 3D printing, design software and integration services, XtreeE will be able to supplement existing construction projects with precision and create products that look unlike anything we've seen previously.
There are 4 key components to their product:
A fully automated 3D Printing Process, from mixing to printing
A multi-component concrete printing head
Multi-material 3D printing, beyond concrete
Multi-robot collaboration
When it comes to 3D printing concrete, they have a full-stack solution. Plus, their printing head offers speed, flexibility and highly customizable shapes. But building requires more than just concrete, which is why they can accommodate things like recyclable clay and polymers. They are also aware that nothing will be built in isolation, so an open ecosystem for their solution is critical, which is why they've designed the product to "play well with others" (say, a robot designed for planting steel bars). Their expertise in concrete paired with the flexibility and collaboration capabilities enables them to deliver economic value in a variety of projects. At present, 3D printing won't replace traditional construction techniques, nor should it, according to Alban Mallet, XtreeE CEO. Mallet sees the company as a precision player that can identify areas of a project where they are best suited to build and integrate nicely with the broader elements of a building.
In contrast to a large contractor, where margins are low and capital costs high, XtreeE's approach felt particularly tech-forward. Incorporating design and rapid prototyping principles and identifying layers within a large project where they can contribute outsized gains is straight out of the Silicon Valley textbook. Not to mention, they can move fast, really fast (30min to print a 2m column). They don't need to own entire projects (yet they can) and their expertise and open integration policy make for incredible partnership opportunities while mitigating threat levels typical of the winner-take-all world of construction. The results are pretty astonishing. Here's a sampling of projects they've contributed to:
Prefabricated concrete structures for houses (to be delivered to build site)
Telecommunication towers
Furniture: they partnered with Roche Bobois to allow customers to design custom table bases that can be overlayed with glass
Infrastructure: they are building a 3D printed bridge for the 2024 Olympic Games in Paris
Artificial Reef: they were able to design and print a concrete coral reef to specifications necessary for fostering biodiversity and wildlife underwater (watch the video, it's awesome!)
If you extrapolate out just 10 years from now, we can see a world in which construction, like many industries, becomes increasingly decentralized, with specialists armed with specific knowledge and open APIs that can facilitate collaboration across all stages of a project. This, of course, isn't limited exclusively to the construction phase, but all stages of the "value chain" from conception to demolition. Paired with IoT sensors and a global movement towards sustainability, a whole new world of opportunity in an industry on the cusp of whole-heartedly embracing tech.
Postscript: Building Inspection
The world of ConTech is vast and the companies working to change the landscape in France are numerous. This essay serves as a quick introduction to the overall construction industry and a unique innovator in the space (XtreeE). My intuition about the French market came from broader research into the category which included companies like Backacia (circular economy for construction) and Hiboo (IoT, fleet management) that are quite impressive as well. Perhaps for a future article!
I, for one, have been reinvigorated by the prospect of design-forward, highly efficient, and sustainable building projects. The future of cities, infrastructure, the economy and ultimately how we live our lives is dependent in some ways on this technology. I feel these companies encourage us to think differently about what a city or building could look like and what purpose our public spaces serve.
If you know any cool companies or projects that embody this sentiment, please send them along. As always, get in touch or share your thoughts on Twitter.
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