Business Startups Venture

Brick & Mortar Draws On Deep Expertise With New $97.2M Fund For Construction Tech Startups

When industry expertise and passion come together, magic is bound to happen. That’s the place in which Brick & Mortar Ventures finds itself as the firm closes on a $97.2 million fund to invest in construction tech startups.

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Founder and Managing Partner Darren Bechtel is leading the charge.

“It’s safe to say I was born and raised in the industry,” he told Crunchbase News. “I started young, got dirt under my nails, and came to appreciate the challenges the industry faces.”

Bechtel’s family owns and has run construction and engineering behemoth The Bechtel Group for 120 years. The San Francisco company saw $25.5 billion in sales last year.

Darren Bechtel, Founder And Managing Partner. Photo Credit: Brick & Mortar

Bechtel is taking his personal experience to the next level as his firm Brick & Mortar closes on its first institutional capital. Construction tech startups, as defined by the company, are “emerging companies developing software and hardware for the industries of architecture, engineering, construction and facilities management.”

Bechtel is also no stranger to investing. He began backing startups as an angel in 2012 and personally funded Brick & Mortar’s early investments in the construction tech space.

And he’s already seen a number of impressive exits. For example, Bechtel was the largest investor in software startup PlanGrid’s seed round in 2012. That company was acquired by Autodesk in November 2018 for $875 million. Bechtel also invested early in Buildingconnected, which was also acquired by Autodesk last year, for $275 million.

These two exits, however, point to a larger trend: construction tech, once a not-so-sexy industry, is increasingly attractive to investors. With a booming economy, construction companies have been busy and the need to become more efficient with time and money has created a gap for startups to fill.

Despite the activity in construction tech, Brick & Mortar has intentionally flown under the radar.1 However, now that the firm has closed its fund, Bechtel is ready to tell us more about how it operates.

A Look Inside Brick & Mortar

Brick & Mortar exclusively counts construction corporate strategics as its LPs, according to Bechtel.

Those LPs include the aforementioned Autodesk as well as Ardex, CEMEX, Ferguson Ventures, FMI, Glodon, Haskell, Hilti, Obayashi, Sidewalk Labs, and United Rentals. According to Brick & Mortar, all the LPs have the option “to share information concerning challenges its organization faces; to collaborate on opportunities it sees; and to explore emerging technology solutions that might be available for proof-of-concept pilots, co-development, or commercial use.” 2

As a Stanford-trained engineer, Bechtel ultimately joined and ran a medical device startup before becoming an angel investor. It was at that point he realized his passion for investing and focused his attention on putting money into other companies.

“While angel investing across a wide variety of verticals, I observed that out of my portfolio of roughly forty companies, the Built World investments were standout performers and looked to be the start of a larger trend,” Bechtel said. His first four construction tech investments were into the seed rounds of PlanGrid, BuildZoom, BuildingConnected, and Rhumbix. Bechtel acknowledges that his family name didn’t hurt in that it opened doors to deals involving investors who were somewhat intimidated by the highly regulated and complex construction industry.

“I got access to some pretty phenomenal deals from generalist, Tier 1 VCs who were looking at companies in the construction space but had limited knowledge of it,” he said. “So they’d reach out to me to assist with some of the deal flow and valuation and to be a value-add investor.”

Over time, Bechtel realized that “it wasn’t scaleable to be a generalist.” He was also encouraged by the rapid growth, impact, and early success of the companies he’d backed. So in 2015, Brick & Mortar Ventures was born.

Bechtel is also a former classmate, and close friends, with Brendan Wallace, the co-founder of another venture firm in a similar space that also recently announced the close of a $503 million fund: Fifth Wall. The pair even invested together for a while before deciding they were better suited to invest separately. While Brick & Mortar is focused more on construction tech, Fifth Wall invests in real estate tech so the two don’t really compete and actually often collaborate, according to Bechtel.

“There’s so much opportunity in these sectors so there’s not really a land grab yet,” he told Crunchbase News. “Eventually as more capital comes to the scene and more people see the potential in the space, we’ll see an increase in competition and valuations. For now, I believe we’re still in the early innings and we’re excited about the opportunities and value we can get as early-stage investors.”

Since the initial closing of its current fund in January 2018, Brick & Mortar has built up a portfolio of 16 companies including ManufactOn, Fieldwire, Serious Labs, Timber, and Safesite. Looking ahead, the firm plans to continue to lead seed and Series A rounds with a focus on the U.S., Canada, Europe, and Australia. It typically invests between $1 million and $4 million into new deals but also reserves some capital for follow-on investments in its portfolio companies. The firm’s team of five consists of Bechtel, Alice Leung, Kaustubh Pandya, Curtis Rodgers, and Austin Yount.

“In 2014, there were a handful of startups in the space, sales were slow and confidence that the construction industry was ready for change and would spend money on solutions,” Bechtel told Crunchbase News. “But when we closed this fund, we had a backlog of 500 startups that we’ve been tracking for several years. So we were able to hit the ground running. And now we’re seeing people who were cautious observers become fast followers.”

In choosing investments, Bechtel said his firm studies the landscape and picks out the top performer in a space, pools its resources behind it in the form of capital, networks and relationships. Despite having industry players as LPs, Bechtel emphasizes Brick & Mortar is “not restricted on its investments at all by the desires of LPs.”

“This is not a shared corporate venture office,” he said. “It’s a traditional institutional venture fund, and we’ll deploy the funds as we see fit.”

Startups See Advantages

From the perspective of the startup, there’s a clear advantage to having an investor that not only has firsthand industry experience but also connections (in the form of LPs) to so many potential customers. Bechtel observed that founders in the space “really like” working with an investor who gets the space.

“I realized early on I was in a unique position to connect tech developers with industry users,” he told Crunchbase News.

Curbio is a Potomac, Md.-based startup that specializes in pre-sale home renovation that just closed on a $7 million Series A that was co-led by Brick & Mortar and Camber Creek, a Washington, D.C.-based firm that offers capital and advisory services for real-estate businesses.

Rick Rudman, CEO of Curbio, told Crunchbase News that it was obvious from his first meeting with Brick & Mortar that the firm was “different.”

“Instead of just the usual business school crowd, sitting around the table were not only MBAs but also a team of people with deep expertise in all aspects of engineering and construction,” Rudman said. “When it comes to innovative technology for the built word, Brick & Mortar has put together a serious team. Every VC firm claims to deliver more than just money. This is one of the few firms that actually has the expertise and connections to deliver on that promise.”

Fundamentally, the time for such a step is right, said Bechtel, as the industry increasingly opens up to innovation.

“We no longer look like crazy people, being among the first to invest in this space,” he said.

Illustration: Li-Anne Dias


  1. I can personally attest to since I have reached out to the firm numerous times for comment when covering the construction tech space and got no response.

  2. The Bechtel Group, which is run today by Darren’s brother Brendan Bechtel, is not an investor in Brick & Mortar or any of its portfolio companies. However, due to Darren’s familial and past professional relationship with Bechtel, Brick & Mortar still considers the company a partner, along with its anchor investors.