In this Research Note, we take a look at Suffolk Technologies, the corporate venture capital arm of Suffolk Construction, which recently closed a $110 million inaugural venture capital fund for “Built World Technology Innovations.” The fund will invest in early-to-growth stage companies across construction technology (ConTech) and property technology (PropTech) spaces, with a focus on those creating solutions for a safer, more sustainable, and more efficient built environment.

“Construction and real estate continue to lag behind other industries when it comes to innovation and the use of technology and data. The time is ripe for disruption and Suffolk is committed to playing a leadership role in our industry’s transformation,” said John Fish, Chairman and CEO of Suffolk.

“By raising money for this fund, investing in visionary entrepreneurs and startups in the construction technology space, and allowing for the testing and development of exciting new tech solutions on Suffolk job sites throughout the country, we are contributing to the innovation lifecycle, adding value to our clients through more efficient projects and helping to redefine the built world for generations to come.”

Suffolk Construction Company was founded in Boston in 1982, by Edward Fish Sr. as an open-shop building contractor. Immediately thereafter, Fish seeded Suffolk with an $80,000 loan and transferred full leadership and management to his 23-year-old son, John F. Fish, who has led the company as Chairman and CEO ever since. By 1987, the company had reportedly grown its annual revenues from $300 thousand to $66 million, and by 1989 it was expanding to Florida. In its last annual report, for 2022, the firm recorded a revenue of $3.5 billion, with John Fish still at the helm.

The Suffolk Technologies fund will deploy venture capital and other resources to help scale new technologies across six key themes: Sustainability, Supply Chain, Design, Fintech, Construction Automation, and Smart Buildings. The VC has already made 30 investments across these themes, including construction tracking play OpenSpace, procurement platform Kojo, geospatial AI software Airworks, and drywall finishing robots at Canvas.

In the smart buildings theme, Suffolk has selected four companies including workplace experience platform HqO. The remaining three companies included real-time AI leak detection play WINT, building emissions analyst and carbon credit platform provider Carbon Title, and flexible hospitality management platform Placemakr.

$110m Venture Capital Fund

“Recognizing the unique challenges many innovators and startups face when accessing our industry, we designed our venture capital platform and ecosystem of partners to deliver expertise, validation and go-to-market support that put startups on a shorter path to success,” said Wan Li Zhu, a Co-founder & Managing Partner at Suffolk Technologies.

Suffolk Technologies claims it is committed to providing a new model of venture capital for the construction and real estate industries. While some VCs focus on helping startups land their next funding round or make their next hire, most corporate VCs are designed to provide innovation, early product testing, or new customers for the corporation itself. However, the VC fund set up by Suffolk appears to be trying to play both roles simultaneously as it evolves past being just the VC arm of a construction company to becoming an independent vehicle of change in the sector.

“Suffolk Construction started investing off its balance sheet a few years ago after it began to notice a couple of trends: All of the interesting innovation in construction was coming from startups, and venture capital seemed eager to back those companies,” said Jit Kee Chin, another co-founder and managing partner at Suffolk Technologies, told TechCrunch. “We saw the potential, we saw the strategic value for us going in and decided to start investing in early 2019. That was really the genesis of Suffolk Technologies, but we invested from 2019 onward as we tested out our investment thesis.”

Suffolk Technologies isn’t the first fund with corporate roots to raise external capital, but it’s still unusual, especially given today’s economic climate. And, while funds like Fifth Wall are working in the billions of dollars, rather than just hundreds of millions, they may not have the targeted objectivity of more corporate linked funds like this.

What we see from Suffolk Technologies’s current stage of evolution is a broad and growing fund that, through its various themes, tackles a key barrier in the development of the smart buildings market —the poor technological connection between construction and building operations.