By Riley Kaminer
McKinsey analysts note that the $12 trillion architecture, engineering, and construction industry – despite being one of the biggest in the world – has historically been among the slowest to digitize and innovate.
That is, until now. McKinsey identifies a “strong demand for infrastructure, a shortage of skilled labor, and increased stakeholder pressure for data transparency and integration” as three key factors accelerating digital adoption. Accordingly, around $50 billion was invested into construction tech between 2020 and 2022 – 85 percent higher than the previous three years.
Wan Li Zhu, the co-founder and managing director of construction tech VC Suffolk Technologies, is keenly aware of this growth. And it’s clear the Suffolk Technologies team is in many ways at the forefront of this innovation.
“There are so many opportunities in construction tech; and a lot of the technologies that we’ve backed and scaled here at Suffolk haven’t had a lot of competition either,” Zhu told Refresh Miami. “So construction tech is arguably a much better place for innovation dollars to go because of the return on investment. The benefits that can be generated are truly extraordinary.”
One major feature that sets Suffolk Technologies apart from other investors is that it is an offshoot of Suffolk Construction, a 2,600+ employee construction firm with presence across the US – including Miami. Suffolk Technologies, which was founded in 2019 and has made 30 investments thus far, only has six employees.
“Most VCs have never worked in construction before,” said Zhu. “I didn’t – and I wouldn’t be able to do this job without all the great [Suffolk Construction] colleagues around me.”
Suffolk Tech works with its portfolio companies to experiment, pilot, and scale their technologies through Suffolk’s construction job sites as much as possible. “We’re able to give startups a step-function change in their visibility and signal in the industry.” This is critical in an industry where Zhu admits it can be particularly difficult to get attention and acquire customers.
Miami-based automated payment platform Flexbase is one of Suffolk’s portfolio companies. Thanks to the Suffolk Technologies connection, Flexbase has been able to deploy its product to Suffolk Construction’s new South Florida projects.
Suffolk Construction also has used Smart Barrel, a Miami startup that has developed a construction time tracking platform designed to keep job costs on track and eliminate payroll disputes.
On its South Florida job sites, Suffolk deploys what it calls the Suffolk Tech Bundle, which includes software to manage site logistics, to use image recognition to document sites, and to automate project management. Zhu also explained that lots of new tech was used in the construction of the Hard Rock Casino in Hollywood. For instance, Suffolk leveraged sophisticated virtual design and VR platforms to develop the iconic guitar-shaped glass tower.
“We are so early on this journey,” said Zhu. “I’m excited to continue investing in these early-stage companies to remove some risk and unlock the broader venture capital industry dollars. We can help great entrepreneurs build companies to really transform this industry with a focus on sustainability, automation, collaboration, addressing labor shortage directly, and making housing more affordable.”
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