Face-to-Face with our Portfolio: Buildots
With buildings accounting for some 40% of global energy consumption, construction and building management have always been major areas of focus for us at the Innovation Hub. We know that by making buildings smarter through the entire lifecycle has the potential to not only improve energy efficiency, but to make these spaces safer, healthier and more productive for everyone. The digital twin is a key component in optimising the construction and building management processes, and is foundational to creating autonomous smart buildings. It’s therefore something we look for when considering PropTech and ConTech investments.
Founded in Israel in 2018, Buildots’ technology uses machine learning and artificial intelligence to collect data direct from construction sites to provide a continuous 360-degree view of their status and enable real-time analysis, helping project managers make the right decisions at the right time. We caught up with Roy Danon, Buildots’ CEO, to find out more about their business and what’s now and next for this promising start-up.
Can you tell us a bit about what your company does, what problems you solve for your customers and what you are focusing on at the moment?
Roy Danon: Buildots is tackling one of the biggest challenges in construction management – process visibility. It’s amazing to see extremely complex multi-million dollar projects managed with nothing more than an Excel file or a Gantt chart, and occasionally a mobile app based on manual reporting.
If you take a look at the manufacturing sector – which is really construction’s closest equivalent – it’s miles ahead in terms of digital process control measures, which has led to huge gains through increased productivity and efficiency.
Buildots’ AI and computer vision algorithms seamlessly turn construction sites into digitally managed environments with nothing more than a few hard-hat cameras. The data captured by the cameras is fed into a virtual control room, where all involved parties can access accurate and reliable project information.
Why do you see ConTech as an important enabler for a utility?
Lisa Cohen: Buildings are the biggest consumers of energy today and are integral to creating the future of energy. We ultimately believe that buildings will become autonomous, controlling themselves and managing their own energy production and consumption. The concept of digital twins in the building space is an essential step to achieving this autonomy, and the best place to start creating a digital twin is in the construction process. In such a low margin industry where firms are always looking to improve their bottom lines, disruptive technology and digital tools that enable transparency and cost reduction are key enablers of this transformation.
Why did the Innovation Hub invest in Buildots? What did you see in the company in particular and how does it fit with your strategy?
Lisa Cohen: High quality data is key for the creation of accurate digital twins. Buildots’ technology scans and tracks the construction process creating large accurate data sets that not only leads to efficiencies in the building process, but can also be used for building management in the future.
As well as the technology itself, there is the management team. The founders behind Buildots gained experience in image recognition technology having formerly worked at some of Israel’s top intelligence units. After identifying construction as an area of opportunity, they spent months of their own time on building sites to work out how they could best apply their technological know-how to solve relevant problems in the industry.
Especially in Israel, there so many investors that invest in construction technologies. Why did you choose innogy Innovation Hub as an investor?
Roy Danon: Not every founding team has the luxury of being able to pick its investors; happily we had that chance. And even though we had an oversubscribed seed round, we saw the great value in working with the Hub and its team. With its strong network, deep understanding of the construction sector pain points and great teams spread all over Europe, innogy was a natural partner for a venture like Buildots.
Some friends advised us against taking corporate VC money as part of the seed round, as CVCs often have limited resources to assist companies at early stages and could negatively influence a startup’s product-market fit process. But we did not feel that was the case with innogy, and we were right – the Innovation Hub has supported us in many ways without ever exerting a corporate influence.
Can you tell us about your approach to giving growth support to Buildots?
Lisa Cohen: As well as our ongoing support from our team here in Tel Aviv, we’ve also hosted Buildots at key events outside of Israel. They participated in our UK Growth Camp for PropTech start-ups, and in Poland we connected them to our partner Skanska where they are due to start a pilot project.
What makes innogy Innovation Hub unique compared to other investors (VCs or other corporates)?
Roy Danon: All investors claim to help their startups, but it’s rare to see an investor with people dedicated to helping their portfolio companies grow. We have been working closely with innogy’s teams in the UK, Poland, Germany and Israel, getting help with everything from introductions to potential partners to multi-day business development workshops.
In some ways, the Innovation Hub has felt like an extension of our business development team, helping us to bridge the culture and language gaps and leading us to some important achievements.
How is Buildots supporting digitalized business models of companies across the construction industry and when do you expect exponential growth for your business?
Roy Danon: Our product turns the construction site into a seamless digitally managed environment, where every process is tracked, and no anomaly is overlooked. This resonates well with the construction industry’s vision for a digital transformation.
In 2020 we expect to continue to grow responsibly, so we can keep building out our product and boosting its value for our customers before kicking-off a massive growth effort at the beginning of 2021.
Can you provide some concrete examples of how the innogy Innovation Hub has provided growth support/cooperation?
Roy Danon: One of the first things I experienced was their involvement in conferences and events, both in organising construction tech-focused events in Israel and sending delegations from the Hub to international conferences with the sole purpose of supporting their portfolio companies. For instance, the Innovation Hub organised a growth workshop in London to improve the relevant portfolio companies’ understanding of and readiness for the UK market.
innogy’s latest contribution to our business has been through their close partnership with Skanska. A discussion initiated at their Portfolio Day in Essen ended up leading to a trial of Buildots on one of Skanska’s flagship projects. The innogy team was incredibly active, orchestrating the discussions from the first meeting right through to the signing of the last legal document.
How has the market changed due to Covid-19 and how are you responding to the crisis in terms of the products/services you offer?
Roy Danon: Of course this wasn’t the case, but our product seems like it had been developed for such a crisis. When there’s limited ability to send people on construction sites, our platform makes sure the data is still available to relevant parties, wherever they are working. We’ve seen a big increase in activity on the system as clients are adapting their workflows to enable remote working.
The crisis has rapidly advanced people’s use and comfort with digital tools due to the social distancing measures (just think video conferencing!) – a process that would have taken years in any other circumstances. This presents huge opportunities of course for Buildots but also for the whole construction sector.
Where do you both want to be in two years from now on this joint journey?
Roy Danon: The next two years are likely to be extremely challenging for the construction sector and one of the implications of the Covid-19 crisis is to make it essential for construction companies to rethink their existing processes and use technology to improve workflows and productivity. We want Buildots to be a key part of the solution, changing construction sites for the better, and helping the sector to emerge from the crisis stronger than ever.
Lisa Cohen: We’d like to see Buildots go from strength to strength by continuing to integrate with large software companies in the construction business and penetrating other geographic markets such as the USA. We believe they have the right technology and people to do this and have the potential to disrupt the entire construction industry.