E325 | Patric Hellermann, GP of Foundamental: On investing in the recreation of the real world

In this conversation, we explore the distinction between construction tech and prop tech, with a focus on the former. Construction tech is a project-based business that optimizes supply chains, while prop-tech is an operations-based business that focuses on real estate transactions and utilization. The conversation delves into:The different segments within construction tech, including architecture, engineering, construction, and supply chain technology.The importance of outcome-based business models.The role of AI and data infrastructure in the construction industry.The conversation concludes with an analysis of the funding trajectory of construct tech and its potential for future growth. Andreas and Patric examine the waves of technology in the construction industry and the importance of data connectivity and harmonization. They also touch on the challenges of pre-manufactured housing and the fallacies in VC fund strategies. Patric shares insights on their fund model, which is vertically dedicated, global, and focused on early-stage investments. They prioritize preempting follow-on rounds and emphasize the importance of staying involved and not delegating decision-making. Patric also offers advice to young people in the industry, including thinking from a DPI perspective and finding differentiation.About the guest.Patric Hellermann, the Founding General Partner of Foundamental, an $84M EUR venture capital fund focusing on construction technology, with $100M EUR Fund III just launched.About the firm.Foundamental is led by three GPs, 1 in the US, 1 in Europe, and 1 in Pacific Asia. They are investing in AEC-Tech: 3D-design, Construction, Renovation, Supply Chain & Logistics, and Blue-Collar Work, starting from day zero up to Series A.Portoflio highlights count Infra.Market (Series A), Enter (pre-seed), Speckle (pre-seed), Rayon (pre-seed), Metalbook (pre-seed), SafeAI (seed), and Wizfreight (seed).Key facts include a 94% follow-on rate among Fund-1 companies, the vast majority of which they invested at seed, top-decile returns in both funds, incl. top-decile DPI (Fund-2 actually top 3-5% currently), circa 10 portfolio companies have achieved net-profitability.Go to eu.vc for our core learnings and the full video interview 👀Chapters:00:03 Meet Patric Hellemann and Foundamental00:32 ConstructTech Explained03:40 PropTech vs. ConstructTech05:40 AECS: Architecture, Engineering, Construction, and Supply Chain06:58 Robotics in Construction08:51 Challenges and Opportunities in Construct Tech19:33 Data Infrastructure and AI in AECS33:07 Market Trends and Investment Insights41:06 Automating Data Connectivity42:59 The Second and Third Waves of Data Integration43:22 Consolidation in the Infrastructure Sector45:00 Challenges in Construction Robotics46:21 Onsite vs. Offsite Construction47:04 Automating Bricklaying48:36 VC Fallacies and Sector-Specific Insights01:13:05 Personal Productivity and Fund Strategy