Construction Tech Trends 2026 - Opening Contech Connect Opening Keynote

0:17 Heat. Heat. Yeah, la.

1:08 Hey. Hey. Hey. Good morning ladies and gentlemen, dear colleagues.

1:42 Welcome to the second contact connect. Big applause for all of you. Together with Jerome and with his amazing team, I am so thankful and honored that I can be your MC moderator again this year. My name is Vadimir. And let's start this way actually.

2:12 Do we have any startups in the room? Please put your hands up. Okay. A few. Yeah. You too. You too. Contact is a startup. Yeah. Right. Right. So beside having a very good product, what else do you need? Clients to do what? To give you money. Okay. We agreed that this would be the the the the the starting point. So for the key point, we have somebody who can help you with money. Big applause for Patrick from Fundamental said clients because the best source of money is not me, it's your customers.

3:13 Yeah. something to remember. So, um, thank you very much, Vladimir Jerome. Thanks for having me. There's a joke already going around. Some of you have known me for years, and we only met now in person, uh, for the first time, and the joke is I'm an AI avatar usually, uh, because people know me in two dimensions, not in three dimensions, but I do exist. So, um, I'm here because I'm a big fan of France and I'm a big fan of the French construction and construction tech ecosystem. I think France is one of the at least five most important markets for construction and I have a few slides to also speak to that. But also you have this wonderful density in Paris of bringing together construction demand construction expertise founders all in a very very dense ecosystem and I'm glad that Jerome and Vladimir and all of the alliance that you're building is bringing you guys together. So for me when Jerome asked me in December, hey why don't you come over said you know usually I don't do it because I'm more of an introvert believe it or not but this one was obvious to me because it's in France it's in Paris and it's done by all of you. So thank you very much. I have I'm a German so I only have 150 slides for 30 minutes. So I hope you're not scared. Uh volume one but um don't don't worry I'll I'll get the 30 minutes Jerome. Um but I also have three messages before that. So, first of all, France is awesome. You guys are building one of the most interesting ecosystems.

4:47 Two, what pisses me off is that people speak about productivity in construction as if it was this magical thing that if you do some software that automates a workflow or that standardizes a process is the solution to productivity. My position is productivity in construction has nothing to do with efficiency. It has everything to do with standardization. So that's the second message. And the third message is standardization in markets doesn't happen on processes. It happens on demand. When the demand standardizes, you as founders or you as corporate buyers can now create and find solutions against that demand. And that's how you standardize. And that's why my presentation today is not about this is how much money is going into contact or these are the best solutions. These are the big tech tech trends. No, I'm going to speak about just the construction demand markets that I'm seeing currently and let's have a conversation about how that can actually foster the most interesting solutions of 2026 and the next few years. So that's my presentation to you guys and I call that by the way project economy. So we at fundamental we love construction but we think it's bigger than just construction. There's infrastructure, there's renovation, there's capexbased markets that have their own idiosyncrasies and we call that the project economy. So let me first give you the market context. Can anyone shout guess which chart after this little introduction can you guess which chart I hate the most that is being spoken about in construction?

6:24 McKenzie which which chart is it? Oh man, Owen, I'm so glad I I paid you before to be my to be my heckler. I hate this chart because it has nothing to do with the reality. So the reason why we have a productivity gap is not because we need to standardize processes. It is because we need to standardize demand. Now let's hype you a little and then I'll sober us a little. So today I'm going to be anti-German. I'll still I'll first make you some good feelings and then I'll bring you down a little bit.

6:54 So $15 trillion is now the worldwide construction market and we're going to grow at 5 to 6% over the next years. A lot of that is driven by infrastructure not surprisingly data centers, energy infrastructure, highway infrastructure, China, India, but also defense infrastructure in Europe. So infrastructure is a big big big demand driver for all of that growth. If you look at another macroeconomic indicator, the so-called gross fixed capital formation, that is roughly the amount of capex, capital expenditures that goes into all of the markets, my markets, projects, it has grown 30 times over the last 65 years. That is a huge growth.

7:36 So, we actually are operating in an amazing market. And also the technology investing AEC tech has become a real category. We're now adding about 3 to 4 billion every year in investments to capture this opportunity. So that's the high part. Now at the same time, this growth needs to come from somewhere because we have all of this demand until 2040. You know, there are other statistics where we say, hey, half of the world's floor space hasn't even been built yet of 2050. 75% of the world's infrastructure in 2050 hasn't even been built yet. So huge amount of demand but somewhere it needs to come from and at the same time construction is pretty much correlated with GDP growth rate. So you can't just have all of this demand and at the same time expect that you grow much faster than GDP. History is our witness here. It's not. So and at the same time also we're seeing capital formation concentrating in five markets.

8:36 China, India, US and two European markets, France and Germany. These are the five big construction and capex markets. So pretty sensible as a founder to also concentrate there. But 40% of that is China and India alone. In the US you have 14 contractors that generate almost 200 billion in annual sales. Very very impressive. But by the way the biggest non-Chinese contractor is who? Vinci French contractor right so in the US here however you still have 14 that make 175 billion in sales what I find interesting though is that their market cap grows 10 times faster than their revenue India lassen and tub bro outpaces every western contractor in 2024 both in market cap growth and in revenue growth China has eight of the 10 world's largest general contractors stateowned or state subsidized with demand and they don't grow, although they make a ton of money. So, they are consolidating. So, where's Europe in all of this? Well, Europe actually is the home to all of the general contractors that make real money, but the stock doesn't grow because we're making a lot of revenue growth. Vinci being an example of the largest one outside of China, but we're not adding market cap to it. That's one of the big problems of actually IPOing also in Europe. So, does that mean that Europe is on the down?

10:02 No. It just means that the money is moving into a different part of construction and that's building products. For example, if you look at Kingspan insulation, if you look at H Highleberg cement, if you look at Sonob in France, these are companies that are printing money. Building products are becoming only more expensive and construction is becoming more expensive. All of that money, big part of it goes into building products. That's my first part is if you look at the demand of construction, we should be very hyped.

10:30 It's becoming very big. We don't have enough solutions to actually solve this demand and a lot of it goes into more expensive materials. So let's talk actually about substitutes for what makes it expensive. So in the US you see that the construction materials prices have doubled since 2020 since the beginning of co that's a real problem for construction. In the US the construction producer in the EU the construction producer prices have pretty much you moved in lock step. With the United States, we see that cement is up two and a half times, steel is up two times since 2020. So, it's becoming very expensive just on the material side to actually build for construction.

11:10 Construction machinery, not exactly the same problem, but also up 40%. So now, if you go back to McKenzie's productivity chart, if you take out China, the picture is even bleeer. If you take out China's productivity gains, you're seeing that in the US, we're really deep negative on productivity because the prices have gone up so high. And in the EU, we are barely flat. We're barely flat because prices. And at the same time, the prices then also manifest in the workers. So we know that pretty much every Western workforce is projected to shrink. We're retiring hundreds of thousands of workers in the UK, in the EU, in the United States.

11:50 just adding to the problem. Remember lots of demand, where's the supply? So now comes my favorite chart, my favorite two charts. So the first one is this representation. What is actually the cost drivers in construction? Look at the chart. You see materials, you see men, you see machines, and somewhere across all of it, you see money. But what you don't see here is software.

12:20 I don't see AI on the chart. Let me represent it to you differently. I once made a representation of how the P&L of the construction industry looks like. It's roughly this. It's roughly this. So again, you have about 3540% men. You have about 3540% material. You have about 10% machines. And across all of that, you have money. Software 2%. You know why? Because the project economy is an outcome economy. We need to put things in place. We need to move atoms. We need to stack them. Nobody cares if that one HR process in construction is 10% more efficient. It doesn't show in the P&L. It won't. And that's in spite of the demand is there.

13:05 You need to fix supply. That's my message. And technology investors have like myself, we have tried to fix supply. We have that was before fundamental invested a lot in 3D printing. I I don't think that's a supply that we're using much in construction. We have, you know, niche solutions, but ultimately it's not a supply that solved a huge amount of demand. Alternative materials, as much as I would like lowcarbon cement or better substitutes for existing materials to succeed, we're not seeing them at large. I think regulation is to blame here also. We're very very cautious with with that. But ultimately we're offering a new supply and it doesn't match the demand. Modular construction. I mean who here doesn't have an opinion about modular construction? My guess is all of you, right? So do I. Again, it hasn't fixed it. You know, we have markets where they have 1% market share. We have markets where they have 10% market share. But that's about the peak that we're seeing.

14:04 So modular construction again it has offered a standardized supply that doesn't meet any kind of standard demand. Although they really I mean I I think I actually stripped out Catera here. If you added Catera there would be three billion hidden somewhere. Yeah. But even in 2021 was the peak investment year. Heavy equipment another source of supply. We also saw investment there. Equipment share had an IPO. Oh and when was it? Was it end of last year or beginning of this year?

14:35 Just round. Right. Yeah. So great IPO. Great for all of us. But I mean that's the success story. Other than that, we haven't really fixed much supply on the heavy equipment side. So founders need to answer where in this P&L am I fixing supply to match demand. How do I make your demand so much better that it shows up in your P&L? And in my opinion, a better AI for a better fractional process. You have to find an answer for that.

15:02 Which brings me to the drivers that I look for in construction. So I think there's five drivers on the demand side that people offering a new supply can really tack onto. It's re-industrialization of the west not just in the US Europe is building a lot of manufacturing capacity right now and bringing it back home data centers obviously energy infrastructure also obviously civil infrastructure because we're still consolidating people in fewer and fewer places and then defense infrastructure. So let's go through them one by one. I can tell you one thing, banks are not financing construction and infrastructure as much. In fact, what you see since the mid 1970s, roughly 1974, that most of the capital that used to go into construction, into building factories, into building infrastructure has moved away. It moved into derivatives. It moved into notional value. It moved into stocks. It moved into any kind of financial product but atoms. It moved away. You know who did it else? China. China did the exact opposite. They didn't subsidize their stock markets, they subsidized their atoms. And India is now doing the same thing. So we're seeing in the west this realization, hey, we actually need to move capital back into construction to build new forms of supply because the demand is obvious, which is now what we're seeing in European manufacturing.

16:19 We can be very proud of this. You're going to see in two to three years a very different manufacturing ecosystem in Europe already. So we're seeing on the PMI that it's moving up. That's a leading indicator and we see that also in the United States next to the EU. So that the offshore capacity is being cut nearly in half. We're really moving our manufacturing capacity back into Europe. Data centers, same story, if not more extreme. 500 billion of capex is going to be added to the global construction temp. Now we're of course also running into bottlenecks there. Who's actually the people on the ground building data centers? Now the famous founder that gave us Catera or the famous investor that gave us Catera thinks he can IPO a data center robotics company. What's it called again? Owen Rose. Oh yeah. R O Z E. Yeah. Again I mean he sees a great trend and offers a solution for it.

17:13 Smart energy demand as a result of that but also as a result of us reconfiguring our energy mix. The infrastructure demand is skyrocketing. So great time for us which means that we're investing about 1.4 trillion into renovating our transmission and distribution lines which means for me and I'm coming wow I can't believe how quick I was uh which means for me as an investor I'm very much interested in solutions that build new capacity of supply but that matches the reality of demand. What is actually that? So for me now it gets nerdy. So hear me out on this one. In fundamental we're looking for three types of companies in 2026 and the following years. We call them synchronizers, synthesizers and systematizers. So synchronizers are companies that if you want to have a very very crude metaphor are marketplaces but they are more than that. So synchronizers are companies that find demand that is standardized.

18:19 That can be demand for money. That can be demand for machines. That can be demand for materials, but always on the level where pretty much every customer has the same demand. I'm looking for the companies that can address a standardized demand. Not at the level of modular construction. Hey, here is my wonderful new type of building. Now, please people buy it. That's not a synchronizer. Synchronizer is a company that goes into the unit of demand that already exists everywhere and then they aggregate the supply to offer against that demand. A company in our portfolio in India infraarket is the world's largest procurement platform called construction materials. They have a good market in India. It's growing a lot. It's booming a lot. Fantastic. They make over three billion in revenue.

19:03 That's a synchronizer. But also there are traditional examples. So Brad Jacob's company XPO big logistics giant is a synchronizer. McDonald's, I argue, is a synchronizer. Most of us think of McDonald's as a restaurant chain. They're a real estate company that just basically offers people a brand, aggregates demand. People come into your restaurant that you own, and they give you recipes, and the ability to procure cheap ingredients. It's actually a synchronizer. It's not a restaurant chain. Coca-Cola, the same thing. Did you guys know that Coca-Cola is actually not bottling their own their own uh beverages? They go into local markets like in Africa or Europe, etc., and they go to a local bottling company and they say, "I'm going to give you a contract. You can have my brand and you will bottle for me a million bottles next year. I'm buying your capacity." And I'm buying your capacity because I'm Coca-Cola. I know that I will sell this amount of thing but you have to take the capex risk. You have to invest in your factory. You have the utilization risk but I'm going to guarantee you that you can use my brand.

20:12 They are not taking the capex on it. They own the brand above that and the demand that is standardized comes to them. Now the bottler says that sounds like a great deal because I know that I will make a ton of money but I as the bottler I'm taking the utilization risk and the investment risk. That's a synchronizer. These kinds of companies I love in construction because they address a uniform amount of demand in men, machines, material and money. These are the four resources in the P&L that in my opinion you should address.

20:42 Synthesizers are a little bit different. So synthesizers create a new form of capacity that doesn't exist today. That can be a new form of material. So for example, a new lowcarbon cement if you think there's enough demand for it. But also, if you take a construction company like Goldbeck, I would argue they're actually a synthesizer because they standardized first parking garages, then they standardized warehouses, and then they standardized office buildings so much on the level, however, that the market wants them. So, they didn't try to sell a new type of demand. They said, "Okay, there's the demand for parking garages. Let me standardize that radically." That was the 1960s to 1980s of Goldpek. Very well done. Outside of construction, SpaceX is a similar example. They have standardized launching into space. They have a monopoly on that now. Didn't exist before. So, I like these kinds of companies, but you have to find a unit of demand that is insanely repeatable.

21:39 So, if you synthesize a new type of supply, but there's very nichy demand for it, it might not be the company worth building. So, that's something to keep in mind. What unit of demand can you synthesize a new type of supply for? And then finally, probably the most exciting ones if you can find this opportunity is what I call a systematizer. So these are infrastructure type businesses like Visa or Mastercard. So you can basically offer the rails on top of which any kind of supply and demand gets exchanged, gets underwritten, gets derisked. So that is pretty cool companies very difficult in construction. In construction, what I look for here are data infrastructure companies. I love these kinds of companies, especially in an age of AI, but also fintech companies. So, fintech companies that offer the rails of exchanging working capital, again, the money of the four Ms, man, material, machines, and money.

22:34 If you can offer fintech to allow the facilitation of working capital or even the compression of working capital in the entire industry, I think it's a very fantastic uh type of company. I call that systematizers. So nerdy chart over last chart. So ultimately against these three types what I'm looking for in 2026 data infrastructure for projects. Uh I think these are very exciting solutions for the buyers. Robotics integration Owen and I will talk about that more what that means. Working capital distribution a key problem and a key demand. And then still the automation of pre-construction defines a lot of what happens downstream. So these are just four of the themes that I'm quite interested in.

23:14 If you work on any of them, I'm around. Hit me up. So, in conclusion, I'm German. Allow me a British joke, Owen. Owen, what is the difference between a British chef and a terrorist? Not a lot. Not a lot. Well, you can negotiate with a terrorist. Thank you very much, Patrick. Thank you so much. We didn't plan that was quick to to be so quick. So there is an extra point here before we start with open. Do we have any questions for Patrick? This is your chance now.

23:54 And why not? Hello. Hello. I'm coming from Spain. We are a wood manufacturing company doing developing solutions, industrialized solutions in timber. You're a synthesizer. Yeah, exactly. And my question is you were talking um all the time about capex. We know that construction is very intense in Capex, but what do you think about new uh ways of financing uh buildings with OPEX?

24:33 Because if you use industrialized components, you can turn that to the OPEX. Yeah. And this is also circular economy and and this is maybe there's an opportunity there to create new businesses. I I I love that you're asking it because um again in the fireside chat with on I can go a little bit into deeper into it, but very quick I think it's one of the most exciting infrastructural opportunities. My personal I don't make predictions. My personal guess is that in 10 years to 15 years from now, we will see a lot of private financing of infrastructure as well as of um uh over the ground type of construction and that would have to come in the form of either leasing or similar types of opex models. So I'm very interested in that and I think for that by the way you can also build infrastructure type solutions that I just mentioned. Great question.

25:40 Hello. Okay, first of all, thank you. Really, really interesting. So, I'm al from the Israeli Center for Construction Technology. And one of the things we're seeing in Israel is a massive boom in founders who typically would go into cyber, fintech, enterprise softwares entering the construction tech space. And what I'm interested in for those founders who are coming from different places who are looking at the industry and seeing how slow companies scale in this space and access to capital, what would you tell them to convince them? Stick to the industry, enter, start solving problems for us.

26:12 Yeah. So, if I had the perfect answer, I think we could all just call it a day and say, okay, problem fixed. But but I do think if you're coming from the outside and especially from a very well-unded category like cyber in Israel, it can be quite frustrating for you that the same method where you're developing a great technology and then you're going through buyers who are used to buying technology can be very frustrating that that is not the case. You so you my biggest advice would be you need to just reinvent yourself of how you build companies.

26:46 It's not technology first. It's literally being very forward with your customers and understanding exactly what what unit of demand do you want me to solve for you and how often can I repeat that unit of demand. In cyber you don't really have that problem because it's sort of obvious when you're an expert and you're coming from you know the intelligence community etc. You know that you have that empathy and you can be very certain that you can repeat it across the globe. In construction you need to crack that first. So it needs a different approach.

27:23 I'm going to sorry David from there a startup in construction. I'm not sure I'm buying the standardization approach because my guess is it might be a cultural point of view which works in countries where standardization is in your core in your heart like in Germany in China and Japan and um I would like to elaborate more on what what freedom can you give to people to enhance their practice because today I guess the main construction software we have running the world are world and excel And why do people spend their time on them is because they have the freedom they need.

28:03 So if you might elaborate on that. Let me let me try to convince you Daniel. So I'm an economist by training. I didn't work as an economist, but it's how I did my undergrad. And so some of that thinking is informed by that. Um let me try to convince you. I would argue Daniel construction is already standardized. It's standardized at the lowest unit of de of of supply that also has the lowest unit of demand. bricks, 2x4s, steel, rebar, nails, dowels, yellow machines. So, you see where I'm going with this, right? So, it's not like construction isn't standardized. It's just standardized at a lower unit of demand. And what we have been trying offering technology or offering new materials is we jumped to a higher unit of of demand where there is no standardization. Do you want my big beautiful building a million times and you can configure it a little bit and you can buy expensive faucets and by the way I raised three billion. Do you want that? No. I I want my building that way.

29:01 So, but I'm happy to buy bricks from you. I'm happy to buy rebar. I'm happy to buy nails and dowels. And by the way, I'm also taking your men, your machines, and your money. That's where it's standardized. Right? So, I think the point you're making about standardization of processes follows a very similar logic. So if for example you know my partner Dustin on fundamental he used to uh own building a connected a pre-construction platform now he runs edify a pre-construction automation platform if he were here he would say you know even in preconstruction estimation in the US people don't even use the same terminology between different parts of the market and then you go to Canada and they use completely different terminology and when you r the use the wrong term they throw you out of the room. So it's at that level that I'm looking for standardization. If you can attack it there and you find the repeatability, then you can drive into the market. That's what I'm excited by.

29:51 Now, tell me, D, did that answer your question or is it different? Okay, thanks. Okay, Ronnie, this is an exception. I wanted to close the session, but thank you, Patrick. Uh, Ronnie from Hive Autonomy. We do self-driving, heavy machinery, and other things. Um and I'm struggling with this sort of thinking around how we organize construction and construction has some similarities with other industries where there's a lot of people that's actually doing the work.

30:22 So you have the same in government construction all these sort of sectors where there's a lot of people and you have to orchestrate all those people and they also have low level of productivity or at least perceived productivity in those. Do you think there is a connection between that and what we're seeing? Because the like I've been out working sites for 10 years and the difficult thing is actually getting all the information out and then you don't really get to haggle with your suppliers because you have so much else to do and there's so many suppliers and it's this orchestration and all those industries you see going very well like banking has a lot less few people per unit of economics. Do you see sort of a Yeah, if you know where I'm getting.

31:08 Absolutely. So I I think just two intuitions um without having the perfect answer. So the first one is just going back to something I said earlier. If you can standardize something, you can also standardize everything downstream. What kind of information you need, what people need to talk about, the decisions that need to be taken. And because we don't have standardization at the highest level, but at the lowest level, we see a lot of this orchestration demand. That's why I'm excited by the project economy because for you as a founder, for me as an investor, there are problems to be solved and they exist because we don't standardize at a higher level of demand. Now that means my second point, we need to let information flow. So my framework about that is an information that doesn't lead to a decision is useless. A decision that doesn't lead to an action is useless.

31:51 Which means that the information that you need for decisions and actions of which you have in construction or or government industries a lot, let that flow. So the most exciting opportunity in that problem for me is for example data infrastructure. I'm much more excited about data infrastructure that can help AI run at perfect precision than I am about another AI solution that gives me a 95% correct answer because it will not allow and enable the decisions that you need to take in construction.

32:20 Every decision is very high risk. So for me data infrastructure that facilitates this flow information decision action at perfect precision. I'm super excited by it. Again, not a perfect answer, but two reflections on it. Trick, thank you so much. I think Thank you. We'll have more time because now we were considering in inviting a British cook to France, but instead we change our mind. He's even worse in cooking. Yes. So instead of instead of him having making a meal for us, I'm happy to introduce Oven from Brick and Bites.

32:58 Please, one big applause. Thanks, Logan. Hello. Hello. Testing. Okay, we're all good. Well, Patrick, I'm glad you made a joke about a British chef and a terrorist because yesterday when I arrived to St. Pancress station to get the Euro Star over to here, I was faced with a 3hour delay and I thought maybe I wouldn't get here at all. And what result what what ended up being was me spending about £56, which in euros maybe is 6570 y on some chicken and broccoli in St.

33:38 Pancra Station. So, wait, that was your meal for €7? Yes. Wow. Cooked by a British chef. It It was okay. Um, okay. Look, hi everyone. Um, we're going to do some questions with Patrick on the presentation. Well, in fact, we're going to split this in two halves. First half, I'll give you some general questions about Fundamental um, and what you guys are looking at that you didn't cover in the presentation. And then the second half, we will focus on some some of the stuff you did cover in the presentation. But before we get there, I wanted to give people a little bit of an insight as to how you and I met.

34:14 Oh god. So back in 2022, uh we were just starting Bricks and Bites and uh we would try our hardest to try and get some of the top people on Bricks and Bites. You know it's like when you're trying to get something off the ground. It can be hard. It can be a slug. It can be tough. You have to do lots of outbound to to a lot of non-response. And um every now and then we would see this mysterious German guy posting stuff on LinkedIn and I thought his posts are kind of interesting. Uh let let me let me try my luck. Um his title was general partner at Fundamental and I had no idea what a general partner was at that time or does. And in fact I I still don't know what a general partner does but I'm working it out.

34:53 Um so I sent you a few DMs and uh for some reason we just didn't make it happen at the time. Whatever. Everyone's busy. And then a year goes by or so and I see you outside another event by the way which was in London and I saw Patrick and I feel this guy is tall and I'm pretty short and I was like hm let me go up to him and shake his hand and it was a little bit intimidating but I went up to you I shook your hand and I said Patrick we finally need to make this thing happen. How do we do it? And he said shoot me a message on LinkedIn.

35:21 I thought brilliant here we go again. So, the first thing I did when I got on the train on the way home with uh from me and Patrick was opened up my phone, open LinkedIn, shoot Patrick a message, and he responded. I thought, oh, here we go. His response, timing is a bit off. I thought, hm, timing is a bit off. It's just a polite way of saying no, right? I'm sure we all go the timing is a bit off thing every now and then. But anyway, uh another few months went by. We started engaging on on uh LinkedIn a little bit more and I thought, you know what, one last effort.

35:58 Let me try and do this thing. I think this is maybe one to two years later now from our first interaction. And I sent you a DM, another DM. By this point, you're probably thinking, [ __ ] hell, who is this guy? Uh and I sent you a weird message with this with this uh text in it, and it said, "Hey, Patrick, we've been pseudo interacting on LinkedIn." I don't even know what that means, but you agreed, so must have something.

36:20 Um, but you you said yes, but it wasn't just yes. You said yes, but I have a proposal. And I h a VC with a proposal. He's either going to offer to give me a fat check so we can take bricks and bites to the next level or he's truly going to tell me to [ __ ] off. Anyway, so a few weeks go by and uh the tension is building. I'm I'm I'm looking forward to hearing what this proposal is and maybe the dreams are about to come true. We're going to get some money to take Bricks and Bikes on a different trajectory. Um, and we started chatting on this meeting.

36:52 Um, and I've been avoiding the question for some time. It went on and I said, "Hey, Patrick, come on. Tell me, tell me what this proposal is." And he said, he said, "Um, yeah, I want to come on Bricks and Bites, but I want to do a threehour podcast." And I'm thinking, 3 hours? So, not only has this guy been avoiding me for one to two years, not only has he not offered to write me a check, he's now asking for a slot four to five times longer than the average slot that people get on bricks and bites. Inside, I was not pleased. And under the intense pressure of a German staring down his webcam to me, and of course, my British politeness, I said yes.

37:29 So, we shot it. Lucky me. Lucky you. We shot it and uh it ended up being 1 hour 45 minutes, which was pretty long, which is actually about three times the length at the time that we were doing podcasts for. Uh and it ended up being our top podcast on Bricks and Bice for a good 18 months, which is the equivalent of around about 18 100 episodes in fact. So, congratulations, Patrick. Thank you very much. And what a wonderful relationship. No.

37:57 Yeah, I agree. 100% agree. So good. In fact, you're now a regular on Bricks and Bites. Thanks for having me. So, we got to know each other and um one thing I learned about Patrick is he does not do events. So, you guys witnessing Patrick doing a presentation today is probably as like lucky as England winning the World Cup this year. And let me tell you why. So, when we were planning to do this thing, you CCed me. I don't know if you meant to CC me in an email with your team, but you did.

38:24 And on that email, there was a full A to Zed of topics of what you wanted to cover in this presentation. I thought, "Holy shit." My first thought was actually good luck. Good luck doing this. But then I thought, you know, there's only really two types of people who one actually have the time, resources, and energy to do this all whilst being a regular on a podcast now, and two are efficient enough to do so. That's VCs and Germans.

38:49 We go. Okay, enough of my crap jokes. Let's move on. Um, okay, Patrick. So, what I'm going to do, open this up with a quick fire round. Yes or no? One word kind of answers and then we will elaborate. All right, let's do this. AI bubble. Yes or no? Yes. Which is more overhyped, low carbon cement or modular construction? Modular construction. Wow. Uh, one word for European cont.

39:26 France. Oh, next construction tech unicorn. Software, robotics, or a marketplace? Robotics. Okay. The most underrated country for construction tech right now. You can't say UK. So, the one that is punching the most above its weight, Australia, then Israel. The most underrated might still be France. Wow. You're just saying all this cuz we're in France. I know. I know. I know how to play to the home crowd.

40:01 Okay, let's let's jump jump into the meat then, Patrick. So, you founded found you founded Fundamental in 2019. If you were starting again in 2026, what's one thing you would do differently than in 2019? And you can't say you'd pick fintech instead? No, I love the category. I I don't need to go into fit. That's okay. Um, probably founder obsession. So, I think the the thing to really realize when you first get into your own fund and investing is just sometimes you only need to be directionally right, but you don't need to have the perfect articulation of the perfect market thesis and the perfect product thesis. If you're directionally right, but you have a founder that or team that will make it work, I think that appreciation had to grow inside of me. I came from from operating then an executive and then moving into investing. It's extremely different. So I would say that that's that's probably the thing that could accelerate me as an investor two or three years.

40:59 So you're so so what you're saying maybe not the most perfectly polished founder when it comes to articulating things but you can sense something inside them that yeah I think you have another question about founders later. So I don't know if you're if you're jumping to that with this but but exactly. So founder obsession and just thinking that that founder will make it work as long as they are directionally right. Maybe we should dive into that. What what what Okay, you tease us there. Um just describe your ideal founder in 2026 then.

41:29 So I'm looking for raw intensity, raw obsession. And I'm not looking for friendly. I'm not looking for you know be softspoken or a great salesperson. I'm looking for raw raw raw intensity so that you can break through walls. Secondly, you need to the ability to articulate an extremely grand vision but also reverse engineer the logical steps of getting there. Three, I love founders that are obsessed with bottlenecks that can articulate all of the bottlenecks that they need to remove to get there. And four, I love founders that stand with both both feet on the ground within their customer side. I love founders who still sell in year 10 themselves than in year one. So raw intensity, huge vision, reverse engineer the vision, obsessed with bottlenecks and both feed in the customer reality.

42:22 Very nice. 100% agree. I've heard you say bottlenecks more in six months than a whole few years prior to that. Very cool. Um, okay. Uh, so we we said something about AI. So is would you say AI is still the number one thing you're seeing on pitch pitch decks today? So look, I mean the same way that you would see internet as the number one thing in 2001 on the pitch decks of startups because you can't be a company today without AI. It's an infrastructural capability that you need to own. Does that make you a AI first company? I I don't think it has to. But yeah, so you know in that sense I'm seeing AI of course on every pitch deck because I should but in a year I shouldn't because people don't say that they're an internet enabled company anyway. It's just a given. So, yep.

43:05 And your first reaction when you see AI on a pitch deck? Yes. So, what would you say is accelerating or start or slowing down? So, in terms of foundings of new foundings, it the the types of foundings have shifted a lot. So two years ago, three years ago, um we were flooded with companies that were wrapping something around documents oftent times and that that mix has changed. So I'm seeing much less of that. But I'm seeing also more articulated use of AI for example in data infrastructure, you know, visual language models in robotics being applied to the project economy and construction. everywhere you have AI, but the category and the mix of the category that we're seeing in the foundings vastly different compared to two years ago and 180 degrees different to 5 years ago.

43:58 Very cool. Okay. Um yeah, I can't remember what you said in your presentation, but was something along the lines of uh it's not AI, it's mostly to do with hardware and that kind of thing. I can't remember the word. You can you can you can correct me in a second but and so you purposely at fundamental played the AI field quite cautiously. Why might that be? Yeah. So we we it's true we did not invest a lot um between 23 24 25 in AI first or AI repping companies whose main value proposition was expressed as AI.

44:33 We played that cautiously because we had an had a hunch that a lot of them would end up being features in someone else's platform either because it is going to be a very universal horizontal platform that would get taken by for example an anthropic at the time I didn't know that anthropic would probably be what I would call a winner but we knew that someone would be or you would be end up in a feature in someone else's data infrastructure ERP what I call bath tubs. So you hold the water, the water being AI. So we focused on the latter.

45:07 We invested in companies such as Speckle, such as Kuro, Kestrel in the US, which are data infrastructure companies for the project economy more than we did in rappers of AI and maybe it's important to notice that this is just your investment taste, right? Um doesn't mean that you can still have a pretty good outcome building an AI solution. Because of that taste, I will also have misses. Of course. Okay, fine. Well, look at lack of uh potential of repeating ourselves here, but obviously we're in Paris at Stasion F. Um what's the construction tech story generally speaking of continental Europe?

45:44 So Europe has been at the forefront ever since I've started fundamental of materials innovation, robotics innovation, less so however other things. So if you want to learn supply chain innovation in construction, marketplace innovation in construction, you need to go to Asia. You need to go to India specifically. And if you have the ability to go into China, you should do it. If you want to learn software, if you want to learn the cutting edge of AI applied to construction, that's a US story and it has ever been since I've been in this market. That's not a European forte necessarily compared to the other continents. But materials innovation, energy ren innovation and robotics. I think this is Europe's story.

46:34 Anyone building in energy, robotics, material innovation here? Okay. Okay. Fine. Cool. Um I think you mentioned US, China, and India as well. So maybe we don't need to go there. But um yeah, thinking about a corporate audience who might be here in the audience then and they're looking at buying some of the best of breed solutions that exists, what should they be asking every tech company before committing to them? So if I were a corporate buyer, the question I would ask every new vendor, especially when it's a startup vendor, pitching me is first explain to me your grand vision. If I buy you, why will you exist in three years from now?

47:21 And then secondly I would ask them and now tell me what problem you're solving tomorrow for me and you will be surprised how few vendors can explain you the connect between the two things. So that you will have startups that will be very very good at explaining you the big picture under a lot of assumptions and you will have even more startups that are exceptional at understanding a customer problem. Maybe they come from the industry or maybe they've spent a lot of discovery with the customer and they will be able to tell you exactly what they can do for you today.

47:54 Sometimes in maybe two difficult words, but if you spend enough time with the client, they will get it. The connection between the two is a very important indicator for a corporate buyer. Okay, very cool. Yeah, loud and clear. Um, and maybe to to adverse that question, like how would how would how could they spot a red flag? So here here's a little trick that um I developed as a muscle when I meet founders who are very charismatic, very visionary. So at some point you will notice with founders that don't that are not able to do both. By the way, Owen, I call this riding the elevator. So ride into the penthouse, big vision, 30 kilometers to the horizon, but also ride into the basement into your machine room and know every screw of your product, of your business, etc. I call it riding the elevator. So that capability, the connect between the two is very rare. So when you meet a founder that is very good at the penthouse but they haven't figured out the machine room when you keep asking them more granular question as Patrick or as a corporate buyer you will notice that at some point after the third time you ask why or the fourth or the fifth why some of them have a tendency to say yeah but you have to remember the ambition is this or please remember my vision is that that's when a founder that is extremely charismatic and visionary runs out of the ability to express the details. That's an interesting uh flag to look for.

49:21 So, so they keep going up like avoiding the question essentially by referring it back to something at the higher part of the element especially because perhaps they don't have the answer because they didn't think about the answer as much and that's a reveal of okay is this a vision pitch or is this grounded in reality? M so you suggest that they keep asking and keep asking questions man it's the most powerful method that I have ever learned and then eventually you get the picture right y they don't know okay very cool um okay so look this is a pretty pretty long one but um it's quite a relevant discussion and it's coming up more so on bricks and bison um I had a conversation recently with a very large tech company in this space publicly traded and they claimed to me that they they build features faster than any startup they spend roughly $300 million on R&D which is about 25 cents of every dollar of revenue that they make.

50:09 Oh wow. Um but they can only go as fast as their customers are willing to adopt. Um and in addition to that, I was at a conference recently in the UK and I I was walking around and I felt that a lot maybe 90% of the solutions there were not actually built for the user. um and maybe a bit too idealistic and I said this to you and you said what bill for a VC pitch deck maybe yeah maybe that's the analogy to use but how do you advise that startups actually stay grounded in this space is would you say that moving moving quick is a good thing or or not are you asking whether moving quick is a is a good thing well let's let's start with the uh grounded okay grounded question first on the basis so yeah you have to be mindful of the user you can innovate quick but the industry is very slow to adopt if people can't adopt so fast then what's the point in moving fast?

50:56 So I I have made my personal experience that going to a customer and trying to identify a problem it has never worked for me because either the customer can express their problem in 10 seconds or it's not relevant this year in construction that that's my personal experience. I'm sure it doesn't cover every potential scenario under the sun but that was my personal experience always. So I think staying grounded as in spend as much time with the customer, explore with them a lot and then ultimately you find a problem. I I think that's hogwash. If a customer needs to spend 3 months with you to identify a problem, trust me, it's not a problem.

51:36 It's not something they will pay for this year. So I don't think it's that. Now I do think that one job of the founder value creation is reframing problems to allow a customer to see how their problem can be repeated across an industry so that now you can offer a solution a supply that when you build it it's cheaper for everyone whereas if everybody built their own custom solution that's one source of value creation for a founder. So when you stay grounded, spend as much time with different customers and identify the pattern of demand that only you can make uniform that only you can really really really repeat across many different customers and that is more true in construction than anywhere else because every construction company has their own processes.

52:25 They do fundamentally the same thing but they use different terminology. They have a slightly different sequence of who they involve, when does the estimator come in, etc. But you as a founder, you're in a very unique position to see that uniformity across all of the noise and that's a form of value creation of staying grounded. Okay, very cool. Um, also just in this space um I think who mentioned asked a question and the the the message I got from the question was about like the excitement, the caliber of founder and people coming into this industry and definitely we're seeing this as well and and in addition to that uh there's been some pretty big funding rounds. Well, we had the IPO equipment share as you mentioned. Um, we had Bedrock Robotics earlier this year, 275 million round, total of 350 million raised. We got Field AI valued at over2 billion uh dollars, $45 million funding round, I think earlier this year maybe or last year, back end of last year.

53:20 Um, okay, general question. What's your what's your sentiment towards like the excitement within the industry right now with the founders and the big funding? look um very high but the variance of capital allocation is the highest it has ever been. What I mean by that is that we see more and more so we have pretty much the same amount of venture capital in the total market as 2021 and 2021 was an absolute peak year for venture capital. We're back at that level almost but we're in 10 times fewer companies that it gets concentrated in. So the taper is more high variance than ever.

53:58 That's why you see for example the team at Bedrock or Ali at at Field raising these very big rounds. And we see that in construction. We see that in in other categories as extreme if not more extreme. So if you're a founder, unfortunately the capital allocation puts you right now into two types of buckets. And I think there should be a third one in the future that I'm exploring how I can be a part of that.

54:24 The first bucket is either you build something such ridiculously civilization level big and can articulate it and can express it and can excite investors to something like that and then you can be one of the few absorbers of that amount mass amount of capital or you use one or two rounds of capital and you become profitable and you build a real [ __ ] business. I really like that category I have to say. Now it's of course difficult especially if you have to build a lot of R&D etc.

54:53 But let's also be honest, it has never been easier to build software. Never been easier. The amount of shipping that you can do in a week is absolutely insane. So also the conditions have shifted to the founders advantages. Certainly I think we will see in 10 years a third category of venture capital which is we're we're going to miss the part of the market that supports 250 million exits because all of this capital concentration this high variance is allowing companies to go for one trillion exits but you know what Owen if you built a billion dollar business or a billion dollar idea 10 years ago you got capital if you say today hey I can build a billion dollar business nobody's going to give you money except small funds because for everyone else the economics will not work out and that creates a gap in the market for 250 million exits which are fantastic life-changing outcome for the founder but also for the industry. These these are very important companies to build and I think there's going to be a third category that will be dedicated specifically to allowing founders to build 250 million to 500 million outcomes.

55:58 Yeah, that's interesting. We h we hosted a round table recently with a few founders who had exited their businesses. I think the values were like around 50 million 275 300 and um yeah round about that region. But the consensus that came up was there was like a lack of exits around the region of like say 300 to 500 to maybe even 500 to 800 and then obviously at 875 you got plan grid and over a billion ax. So um what you're saying is you see this field emerge this area emerging in between those two brackets say the 300ish to well you said 500 but that yeah exactly now what that also means is a founder needs to build more capital efficient so you you can't justify a 500 million outcome raising 100 million of capital that doesn't work so you can get to a 500 million outcome raising 25 million of capital and make it life-changing for everyone on the cap table but that also means that you have to built that way. Now with AI, it's possible in many cases.

56:56 Oh, okay. Very cool. Um, okay. Look, you said this right at the end. You said you don't make predictions, but um, what happens in construction in 2027, construction tech in 2027? 27 or 26? Uh, let's go 26 and then we'll go 27. So for 26, I already gave you a prediction on one of our podcasts. So I made the prediction in January that we will have three $1 billion IPOs in construction. We had equipment share after that.

57:30 In my portfolio, I think we will have one this year. So I have a little bit of information asymmetry and I'm gunning for a third one. I'm quite confident we will at least see a billion dollar a third billion dollar exit if not IPO. So I think I'll I'll be I'm confident about my prediction from January. 2027. What was that? 26. That was for 26. Okay. Maybe this will feed nicely into the next line of questioning. So 2027 I guess is more towards the thesis of what you're looking for which you spoke about today. Four key areas, right? Robotics, data infrastructure, working capital risk and uh sorry which one did I precon automation pre pre-construction automation. I wanted to go into robotics. Um what's your views on jobs? In fact, why don't I just be quite broad here? like tell us about robotics why does it excite you?

58:19 So look um again if you think of the four types of supply men, machines, materials and money, men and machines can be addressed by robotics and we will not be able to meet the demand of the future in infrastructure be energy, data centers, transportation and highways but also vertical construction. We will not be able to meet it by throwing more bodies at the problem because we're running out of bodies quite honestly. I mean the demographics are quite dire unfortunately uh in the west. So we will literally have to have machines working for us. By the way, quick side note, I don't know how it is in France or or the US, but in Germany the the chancellor that that the Germans voted for is extremely uninspiring. And the same mantra that he has been saying since he took office a year ago is Germans need to work more. I mean he's not wrong, but do you find that inspiring as someone in the in the society? Hey, please work more, work more. so that you know nobody finds it inspiring. If I were the chancellor, I I think it's a super easy message. Let's actually take all of the pension money that we have, create a huge fund with which we will finance robotics. And by the way, everybody can go into uh early pension with 55 because we will distribute the taxation from the robots through the fund that has finance the robots back to society and all of the pensions are going to be paid for early and everybody can go into retirement earlier. I think it's a super easy pitch. I don't understand why they're not doing that. Can you please work until 35 until 75? No, please work until 55. So robotics is a very very important space for mankind and for the western demographics but also for construction because we will not be able to meet that demand.

60:02 Now I think robotics has one problem. So founders tend to be very good at building either hyperverticalized monolithic solutions that address hopefully a big enough demand like brick laying is a company in my portfolio monumental which does a terrific job and it can be a very big outcome by being monolithic but that's few and far between. many that are monolithic actually don't have enough demand to address or you can build a company that is super horizontal and you hope that at some point someone in construction picks you up I think actually the more interesting solution in 2027 to build for construction and robotics is an integration layer so there is a concept called systems integration in robotics in manufacturing you you don't get any manufacturing site integr automated without systems integrators so you literally go to systems integrators And you tell them, okay, I have this unique situation. I have a unique factory. I have a unique shop floor. I have a unique process. I have a unique product to build. Does that sound similar to construction? Very unique.

61:05 Yeah. So that's why systems integration emerged because you needed engineers to sit between the manufacturers of robotics hardware and the adopters and operators of automated systems to translate, design it for me, engineer it for me, come to my site, add the metal to it, add the electrics to it, program the system for logic, add motion, integrate it with my other systems. That's exactly what construction needs. We don't need construction to have a uniform supply of robotics. We need construction to have a uniform supply of integration. That's what I'm excited to back.

61:43 So, so just help me understand this. So, integration would be in a hypothetical scenario, someone starting a construction project or planning a construction project and they say, I need five robots that do this. A systems integrator comes in and is like, I'll build those for you. I'll design it. I'll engineer it. I'll find the right SKUs from Europe or from China. I'm organizing the supply chain. I'm procuring it for you. I'm going to have it all shipped to my factory. I'm going to simulate it. I'm going to program logic. I'm going to program motion. Going to bring it to your site.

62:13 I'm going to demonstrate it. You're going to tell me what doesn't work. I'll take it back. I'll do all of that again. Then I'll add metal to it. You know, cages, feeders, transportation platforms. I'm going to do the electrical work. I'm going to come back to your site. I'm going to show you that it works. You're going to tell me you need one more robot. I'm going to add that and the system works in your site.

62:32 uniformly across your company. Very cool. So this would be like um like a forward deployed robotics engineer and that exists already. We do that for 35 years in manufacturing sites and factories. Without it, nothing works. Very cool. Um okay, I have to ask you this one because you mentioned it in your presentation. Rose, the data center robot, it's going for hundred billion IPO. No product, just a just a headline at the moment. Hype or reality?

63:02 Hype. Good signal. I mean, it's construction. It's data centers. Like, it's maybe it's bringing some attention to the industry. So, look, technically, I always like capital allocation because it creates fungeability, it creates liquidity, it creates opportunity for everyone, you know, like like a in the end, if you're a hedge fun, if you're a day trader, the best thing you can hope for is variance and volatility. It's not stability. So, if you know, capital moving around is generally a good thing. What that also creates however is the troughs when hype falls back down to reality. So that is something that founders that that want to tack onto that hype they need to be aware of that at some point there might be a day of reckoning where because you're being lumped together with that kind of a thing you might also see a drought of three or four years companies that built in modular construction they benefited from Catera but they also were hurt by Catera similar story similar kind of thing. Okay. Um, few more questions and then we'll open this up to if anyone wants to ask some questions for the last 10 minutes or so.

64:01 But, um, yeah, we we we quite often hear this data infrastructure layer and I think it's actually becoming more people are talking about it now. Um, there's a there's a new buzzword emerging common data environment um as well as uh we we are the yeah intelligence layer maybe rather than infrastructure layer. Can you just explain like what what does it actually mean? What does what is data infrastructure? So look, if if you want AI to give you extremely precise results, you have to understand in the end ultimately it's a statistical engine. It uses vectors. It goes through the vectors to find the most probable next letter. Ultimately, that's it. So it's a probabilistic machine. Now in construction, you don't want to operate with probabilities for most of your decisions. You want to know pretty much as accurate as any highly trained expert human could give you an answer. Now, will the human be wrong? Of course, that's an argument that you will make when you when you build with AI. But you don't want it to have more wrong than that. If you want it, that's my position. If you want to get to the maximum precision of applying AI, you need to organize your data in a way that ontologically schematically it is very uniform for your business to use and reuse and reuse and reuse so that whatever you apply knows that it doesn't have to rely on a variance of data. You eliminate the variance of data for your business. And then secondly, you need to allow it to flow extremely seamlessly because you can also have hallucinations in using agents to go to transfer data from one system into the other or to map data from one system or or to use data and then reuse it over here. Let me give you a metaphor. If you're a bank, will you guys really use AI to make the computation on the interest rate of what uh someone that owes you money, your borrower, owes you today?

66:02 Who would who would use AI for it? Uh, no one, right? You would use a calculator. You would use your computer to do the engine. That's because the calculation is deterministic. It's not probabilistic. Mhm. So a bank will absolutely never use AI to run the calculations because there's only one right answer. It's the same with letting data flow. So if you can actually say, okay, this is the source of truth. This is the point of time of information. I've transcribed it into the system. Data infrastructure makes sure that immutably you use this information across all of your systems and across all of your AI stack. That's why I'm excited about data infrastructure.

66:47 Very cool. Okay. Um, one last question. Someone's got a gun to your head. Out of the four categories you mentioned, um, pre-construction, data, infrastructure, robotics, working capital, risk. Where do you place your chips? All four of them currently. Yeah. But I think I think working capital is underserved especially because fintech has been orphaned as a category the last two years. So, a lot of investors that used to invest a lot in fintech moved a lot of chips into AI. I'm betting that the fintech craze is coming back and especially construction as a category needs a lot of money to move around. I don't know if you guys know this number.

67:26 So, there's about 10 billion invoices every year written across construction. 10 billion invoices. The amount of working capital in construction is trillions at any given point in time. Sorry, trillion, not trillions, plural trillion. at any given point in time. If you can with your financial infrastructure or working capital solution reduce that because you allow that less invoices need to be written, less working capital will be in the system and you can also facilitate the lending and the movement of money in this infra in this uh industry. You're solving a huge issue.

68:03 Very cool. Okay, Patrick, thank you so much. Thank you. I think we will open up some to the audience. I know we done a little bit of Q&A before, but maybe there's some more questions as a result of this chat I just had with Patrick. So, anyone do you want to do Lord? Actually, I use the exclusivity and if I may start uh and then Paco and Grace, I see you. Um, how about solutions from China? Are we kind of blocking them to enter the EU market and the uh UK and states or because so far I've heard when guys have a great solution in in Germany or in Austria they say yeah we are great but in China they're doing miracles u why are we doing that and what's going to happen when we remove this roadblock or or the the the border limit so I'm going to give you personal opinion but not an op I think they're bigger experts than me on that. So um just just I I studied in China. I lived in China for a while. I'm actually quite syophile. I I love the people. I love the culture and I also respect a lot what China has been done to its economy but also to its society. So I'm I'm more soile than the average westerner by far.

69:21 But I'm still only having an a personal opinion. Vladimir now I think it's not China versus EU the same way that I don't think it's US versus EU. I think it's sovereignty. In the end, if you have to rely on solutions that you can't produce domestically in the EU, you're importing your survival. Just, you know, the metaphor that always comes to my mind. Imagine we were all still a little medieval village, 1200 in the Bona. You know, we're enjoying life. Sun is good.

69:50 The good old days. The good old days. You know, you have a carpenter in town. You have someone that does your shoes. You have someone that cooks. You have someone that does the fishing. You know what you're not doing? You're not going to the next village to buy your shoes. You have organized your society so that you're sovereign. You can pretty much supply your own little village and the demand for yourself. Globalization has undone that. Globalization has meant that we imported survival because we gave away lots of the shoe production, lots of the, you know, furniture production, lots of the food production from our little village into other villages. and we hope that the other villages would always play nice with us. That's giving away sovereignty. That means you're importing survival. So I think it's less about China or US. I I mean honestly are you more excited about buying US software than Chinese software these days as a European? I don't know. I I'm hearing different streams. So it's not China, but it is that I think Europe should definitely be sovereign on its technology as well as on its construction sites.

71:07 Good morning. Okay, thank you. Um this is Paco Gomez and I am running the Barcelona contact hub. So um first thing that we are trying to do is to put our ecosystem among all these five markets that you have said and initially um Spanish market now it's is not as big as the one that you have set but on the other side we have maybe top three uh top 10 construction companies in the world. So Ferovial and Aiona good. Okay my my question goes like this. So we are trying to um boost our ecosystem to bring as more context start as possible but um compared to other verticals in our vertical is not all digitalization or digitization. We have materials we have machines. So the the first investment has a big capex to to to put in place and that for startups that are emerging it's a for for us from my side it's it's a it's a kind of block.

72:12 Yeah. So do you think or how can you address to these startups and try to avoid this if it's any kind of avoidable process because we found that uh when you talk about fintech for example with 100,000 you can build a pretty good software or platform but if you are building a 3D printing machine you you needs to start for 1 million dollars or euros. So do you think that it's a problem in our vertical or not? So let's say yes and no. I I think for 99% of the founders that need to address or that want to address a solution that requires capex venture capital might not be the correct asset class to solve it and then there's only so few other capital pools that you can tap into. It could be your customers but they have to be educated and they have to be a little bit of risk-taking.

73:04 So I I love what you're doing because you're bringing together also customers and you're educating. That's something that I do with my type of business much less EU of course there are solutions but they take time you know you can address them and then banks I mean too much risk they can't really underwrite it do you make sorry difference between corporate venture capitals and virtu capitals do you make difference between that yeah I do I do I mean of course every setup is different but in a corporate venture capital fund of course you can still you you have more latitude to justify investments than I So I in the end need to be purely financially motivated which brings me to the 1% that I wanted to get to. So for 1% of the companies that need capex it's not going to be a problem because my capital is actually good enough for them. Now I unfortunately am bound to back very large outcomes. I don't need the trillion dollar outcome but I need at the very least a billion dollar outcome to be believable. Which means that to answer your question now if you have such a solution and you require it you need to tell a grand story and you need to buil the ability and of course credible so not just okay here's my but it needs to be actually credible reverse engineer how you get there identify the bottlenecks and both feets on the ground how you're doing it this year then venture capital can also be your solution thanks by the way uh in in Barcelona I also have a portfolio Seronia.

74:31 So the the X Privalia founders. Yes, I know them very well. They are more. They're big more talk. Yeah. Thank you. Hi Patrick. Thank you so much for everything that you shared with us today and thank you Owen for the uh leading this conversation. My name is Grace. I'm here from Munich um in the uh Tomb Venture Labs incubator uh with a focus on the built environment labs. And I really appreciate your focus on the bottlenecks. So there's one more that I would love to hear your opinion on um which is bureaucracy.

75:05 Um particularly in terms of certifications um when it comes to new materials, new processes, what have you. And a lot of founders know this. There's certain building requirements that are very localized. So you know the whole question of standardization comes into play as well. But is it do you see any way that innovation can happen on a bureaucratic level such that the innovations that we're creating the new processes that we're designing can actually then be used reducing the risk of outcomes.

75:40 So it's um not something I'm I'm expert on or very familiar with. Grace I I myself find it a fa fascinating topic. So I think you had a couple question. Let me go through them quickly. So one by one, do I see bureaucracy hampering certain types of supply? Yes, especially around certifications for materials, but also new building methods. It's years, if not a decade, until you can truly make a dent. Now, you will know this. Germany has introduced this new type of building class where, okay, you don't have to have the highest energy efficiency anymore or you don't have to have every uh rating anymore as long as your customer is happy with it. you know it's I think building class E we call it if I E like E. Uh now the problem with that however is that when you talk to both developers and general contracts they say yeah okay now now at least from a regulation perspective I'm allowed to build it but I don't know if I will get sued 10 years down the line for not being up to standard. So it's not resolving it I think the way we would but it I appreciate that's a step in in the right direction. So that's the first point. Yes it hampers on the second part. Do I think there can be innovation on bureaucracy? So again, I think something that is underused in policym and regulation is actually what the United States Department of Defense now Department of War has been doing very well for many years is take founders, give them internships or fellowships to rotate through their departments and their ministries. And the job is help our department be closer to technology, help them assess technology, help them procure technology, help them talk to technology. And I think that has been a great fungeibility creator between the defense and intelligence ecosystem and the startup uh ecosystem for that. I wish we would do that on every level of bureaucracy, but especially for construction. And I think it's such an easy fix and I mean I can think of so many founders that would be excited to give back after they have been successful by being engaged in a program like that. So if there are any policy makers here absolutely do a fellowship and rotate through all of your departments.

77:51 Great question. since we're almost on time. Yeah, the time has gone the other way now. Yes. Yes. I'm very happy that you've been with us. Thank you, Obin. Thank you, Patrick. One big applause. Thanks. Thanks, Vladimir. Download the Brema app and see you around.