Bricks And Bytes Podcast
April 28, 2023

#009 – Alice Leung – Transcript

Bricks and Bytes
Bricks and Bytes
#009 - Alice Leung - Transcript

Show Notes

Alice Leung


In this episode, Alice shares her insights on the construction industry as an investment opportunity, current trends, and brick-and-mortar-specific strategies for startups. If you’re enjoying our show, please follow us on your favorite podcast platform. You’re listening to the Bricks and Bites podcast, where we take you on a journey through construction, technology, and business. Let’s dive into this episode. 

Alice began her career in the construction industry, primarily working in operations and managing various scopes of work. She became interested in Building Information Modeling (BIM) and Virtual Design and Construction (VDC) just as they started gaining traction in the industry. Her passion for construction technology led her to work closely with several startups, and eventually she decided to join a construction tech startup herself. 

Alice reached out to Curtis from the Brick and Mortar team, who connected her with an unexpected job opportunity in venture capital. Though she wasn’t familiar with investing, Alice had a deep understanding of the construction industry from a general contractor’s perspective and enjoyed working with technology startups on product development and roadmaps. 

She has been with Brick and Mortar Ventures for over three years, where she manages deal flow by taking initial calls with entrepreneurs and evaluating their businesses for potential investment opportunities. Alice continues to be passionate about the data and process side of construction technology, and her experience has proven invaluable in her current role. 

Alice plays a crucial role on her team, helping to determine which path to take for various companies in the construction tech space. In addition to her deal flow management responsibilities, she is now the Vice President of Platform and Product Strategy. Alice enjoys working with portfolio companies on their product roadmaps and is also involved in community building. She currently leads Formwork Labs, an accelerator program for Brick and Mortar Ventures, in collaboration with Built World. 

Formwork Labs is a recent initiative, and Alice and her team have been working hard to gather feedback from mentors and startups to improve the program. The goal is to make it a valuable resource for anyone interested in building something in the construction tech space. 

Brick and Mortar Ventures, founded in 2015 by Darren Bechtel, focuses on investing in the construction process, which spans from design to operations and maintenance. The firm has a unique perspective, positioned between prop tech and industrial tech, and invests in various sectors, such as oil and gas, mining, civil infrastructure, utilities, and more. They primarily engage in Seed and Series A investing, which is typically when a company already has a product and is gathering customer feedback. 

In the construction tech ecosystem, there is a distinction between institutional VCs like Brick and Mortar and corporate venture groups like WND Ventures (associated with DPR Construction). Both types of investors play a significant role in funding risky bets and fostering innovation in the space. Institutional VCs like Brick and Mortar aim for financial returns by investing in potential unicorn companies that can achieve billion-dollar valuations within a 6-8 year timeframe. 

In the construction tech world, several companies have the potential to become unicorns or have been on track for rapid growth before being acquired. The hope is that there are still many more such companies in the pipeline, and investors like Brick and Mortar Ventures will continue to play a crucial role in helping them succeed. 

The construction industry is a massive $10 trillion market, with specific areas like steel alone representing hundreds of billions of dollars per year. Innovating within a particular scope of work in construction can offer significant opportunities for growth. However, challenges arise as construction is highly regionalized. 

Areas of opportunity in the construction industry can be divided into different operational processes such as financing, insurance, project management, and communication. No clear winners have emerged yet in these areas, as most startups are still in the early stages of development. Software-focused startups have seen significant growth in the last 10 years, but Alice believes the greater opportunity lies in hardware and robotics. This is due to a growing labor shortage and retention issues in the construction industry, with many professionals leaving the field for other roles. 

The increasing demand for construction and a potential lack of on-site labor emphasize the need for robotics to help manage and maintain the industry. It’s possible that the next stage for the construction industry is a shift towards increased robotics and automation. 

Brick and Mortar Ventures primarily invests in North America but also has investments in Australia and Europe. The firm’s investment strategy is focused on the value they can add to a startup. As they expand their network of industry professionals and contacts globally, they will become more confident in investing overseas and providing value to companies in other regions. 

Interestingly, construction tech ideas don’t seem to differ significantly across various regions. The main difference is the localization of the ideas to suit specific regions. The construction industry is so unique and specific to individual companies that it is challenging to establish any standardization, which presents both struggles and opportunities for startups seeking investment and growth. 

While Alice is more familiar with construction tech than overall VC, she does note some differences in the venture capital landscape between the UK and the USA. She has observed a lot of interest in UK construction tech, particularly with large projects like HS2. Many UK startups have received grant funding from Innovate UK, which has been beneficial for construction tech companies needing more capital due to longer sales cycles and hardware development costs. 

In terms of sustainability and carbon regulations, the UK is further ahead than the US, making it an interesting region to explore upcoming trends in sustainability. However, Alice has noticed a decline in the number of UK-based startups recently, with more companies emerging from Eastern Europe and Israel. It is possible that this decline in the UK is a temporary lag and that newer startups will appear on the radar in the coming years. 

Comparing VC in construction tech to other industries like FinTech and Biotech, it is essential to acknowledge that each industry has its unique challenges and opportunities. While Alice may not have direct experience with these other industries, the venture capital landscape differs depending on the specific needs, regulatory environment, and growth potential of each sector. 

There are indeed major differences in investing in construction tech companies compared to other industries. Construction tech funds, like biotech funds, often require investors to have a deeper understanding of the industry they are investing in. Although construction tech may not require PhDs like biotech, having knowledge of the industry helps investors navigate the various aspects of construction, such as different contract types, processes, and sales channels. 

Comparing construction tech to other industries like FinTech and InsureTech, there are similarities in the need for investors to understand the existing landscape and gaps within those sectors. However, construction tech is mostly focused on B2B sales, whereas other industries may have a mix of B2B and B2C. Opportunities for collaboration and learning exist across different investment areas, and funds can work together to combine their expertise and better support the startups they invest in. 

Regarding potential friction in investing across different geographies, while the construction scenes in the UK and the US may have their differences, the ultimate goal of constructing buildings remains the same. The differences in processes and people involved can be addressed by understanding the localized context and collaborating with local investors who have knowledge of the specific region’s construction scene. This collaborative approach can help bridge the gap and ensure that investments are well-informed and targeted effectively. 

There can be some friction between the processes when it comes to investing in construction tech companies across different regions. The difference between American construction and construction outside of the US often comes down to specific practices, such as the role of quantity surveyors. The level of detail and expectations in project controls, for instance, might be more robust outside the US, leading to differences in how investors view companies from different regions. 

The readiness of the US market for more complex processes is a big question. Factors such as changing expectations of American clients and the influence of overseas experiences can impact the market’s readiness. Investors need to consider the regional nuances and determine if the US market is prepared for the specific technology or process. 

When evaluating founders and companies, investors typically have multiple meetings and calls rather than making a decision after a single interaction. Some investors might build conviction quickly or rely on prior market research, but it’s important to thoroughly understand the founders and their vision. During the first meeting or call, investors might look for potential in the founders’ ability to grow the company, but a more detailed evaluation process will follow to determine the best investment opportunities. 

For us, the investment process is a bit different. We tend to take more time because we want to add value to the entrepreneurs we invest in. It involves relationship building, gauging the entrepreneur’s openness to feedback, and evaluating their execution on customer feedback. We want a partnership that lasts over time, where entrepreneurs are comfortable leveraging our expertise, network, and connections. 

We also assess market sizing, the product being built, and the opportunity for growth. We go deeper to understand the data being leveraged and integration opportunities, considering the different paths a company could potentially take. This helps us determine the best go-to-market strategy for the company. 

Regarding the economy and tough times ahead, I’m an optimistic person. Although I didn’t experience the US housing crisis firsthand, I’ve learned from others that construction is generally resilient. When private spending in construction stops, public projects often come online. There might be a gap, but governments usually handle stimulus to ensure that this large part of the economy keeps going. 

When I look at construction in general, there are cyclical ups and downs, but total construction spending is relatively consistent. This means that construction technology startups with diversified public and private clients should be able to weather economic storms. If they can continue to grow and generate revenue, they should manage to survive periods when funding is slow. We’ve been continuing to invest, and there is capital available for seed and series A startups. Series B and C startups might face more challenges, as they are no longer raising from just built world funds and are competing with other industries for funding. 

Construction is a resilient industry, and we’ve seen increasing interest from generalist investors and LPs over the last few years. The pandemic has highlighted the importance of construction as an essential business, and I’m optimistic that we’ll continue to see growth in construction tech startups. We’re still investing, and hopefully, the later-stage startups can weather the current situation and continue to grow once more capital becomes available. 

Regarding my free time outside of work and family, I enjoy hanging out with friends. Since I travel a lot, my downtime often involves sitting on my couch and watching TV to unwind. Being a “vegetable” on the couch is how I recharge after a busy day. As for the podcast by Laurie Santos, I’m familiar with her work. She teaches a course on well-being and mindfulness, discussing topics like fulfillment and happiness. 

And is there something that you feel is like your key to mental wellness? Well, I try to work out every day, and I think that really helps with my mental well-being. I don’t meditate, though I know many people do these days. I’ve tried meditating, but I can’t get into it. It’s hard for me, so maybe I need a coach for that. It seems I might be in the ADHD club too, as I struggle with focusing on just one thing or not focusing on anything during meditation. 

To find out more about me, the easiest place is probably on LinkedIn. I also recently started a blog called “For the Love of Construction Tech” at I’ve been posting some content on LinkedIn and am trying to get into the habit of writing down thoughts about the industry. The construction tech space is continuing to grow, and we’re getting more people interested in the space. I thought it was a great idea to solidify those thoughts and help share and scale that knowledge across people who are interested. 

Thank you very much for tuning in to this episode of the Bricks and Bytes podcast. If you are enjoying the show, please feel free to rate, subscribe, and leave a review wherever you listen to your podcasts. We really appreciate it, and we’ll catch you in the next episode. 

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