Artificial intelligence and robotics are quickly emerging as the frontrunners in construction technology investment, with more than half of all funding in early 2025 targeting these innovations, according to a new report from Nymbl Ventures, a Chicago-based venture capital firm focused on the built environment.

In the first quarter of 2025, 55% of the $3.55 billion invested in construction technology went to next-generation robotics and AI-powered solutions, marking a dramatic surge from previous years, the firm’s analysis shows. That figure represents a stark increase from less than 30% allocated to these technologies across all of 2024.

The report noted that the spike in funding was particularly striking compared to the broader venture capital market, where only 30% of investments were directed toward AI initiatives. “On its own, AI was the winner in the quarter — 46% of total investment dollars went toward AI-enabled solutions, a significant increase from an average of 25% in 2024 and less than 20% in 2023,” the report said.

The data signals a growing appetite for AI-driven tools across the construction ecosystem as firms look to automation, predictive analytics, and robotics to improve efficiency, manage risk, and mitigate labor shortages.

Diverging Investment Trends Across Sectors

Nymbl Ventures’ report broke down investment activity into three key segments: building technology, infrastructure technology, and construction technology.

• Building tech encompasses solutions for developers, owners, operators, underwriters, and brokers managing commercial, industrial, and residential buildings. This includes advancements in HVAC systems, structural components, digital twins, and carbon management tools.
• Infrastructure tech focuses on technologies supporting the maintenance, management, and optimization of horizontal assets such as roads, bridges, advanced manufacturing facilities, and utilities.
• Construction tech covers tools and platforms involved directly in the construction process of both vertical and horizontal projects. This category includes project management, field management, workforce management, financing, preconstruction tools, and industrialized construction solutions.

Among the three, only construction tech experienced year-over-year growth. According to the report, construction tech investment climbed 46% compared to the same quarter in 2024 and rose 17% from the previous quarter. By contrast, investment in building tech plummeted 58% year-over-year and fell 65% from the last quarter. Infrastructure tech also saw declines, with investment dropping 29% annually and 14% quarter-over-quarter.

Later-Stage Deals Hold Steady as Exits Slow

On the deal-making front, growth-stage investments remained robust in the first quarter, with 47 post-Series A deals recorded. This figure was second only to the fourth quarter of 2024, which saw 53 Series B and later-stage deals close.

However, exit activity slowed notably amid economic volatility and global uncertainty tied to potential new tariffs from the U.S. market. The report found only eight exits took place during Q1, down sharply from 42 exits recorded in 2024. Of those eight, seven were companies that had raised under $15 million, and at least three were classified as distressed sales.

In the face of economic headwinds, investors appear willing to remain patient rather than rush exits. “Investors have chosen to stay in the sector, for now, except when their hands have been forced by deteriorating conditions,” the report observed.

Looking Ahead: A Cautious Yet Optimistic Outlook

Despite the slowdown in exits, Nymbl Ventures remains cautiously optimistic about the investment environment for construction tech moving forward. The firm expects mergers and acquisitions to remain sluggish in the near term as investors and buyers await clearer economic signals.

“Venture debt, distressed M&A and highly selective investing into early and growth-stage startups are likely to be emerging themes of Q2,” the report said.

The rise of AI and robotics in construction reflects broader industry trends as firms seek to digitize workflows, reduce costs, and overcome persistent workforce challenges. With nearly half of all construction tech investment dollars now flowing into AI-powered solutions, the sector is poised for further transformation as innovation accelerates.

Still, experts caution that navigating the current economic landscape will require careful balance between bold bets on emerging technologies and prudent risk management amid market uncertainty.

Originally reported by Matthew Thibault in Construction Dive.