How KOMPAS VC invests in the transformation of the built environment
In the hierarchy of human needs, shelter is fundamental to our well-being and security. However, we are also becoming increasingly aware of the significant environmental cost as we satisfy this basic human need.
The built environment accounts for more than 40% of all raw materials extracted globally, generating a large share of our CO2 emissions. Heating, cooling and lighting buildings contribute approximately 27% of global CO2 emissions. Embodied carbon from materials like cement and steel adds another 15%. Architects and developers tackle this challenge by adopting new construction technologies, innovative building materials, and holistic energy solutions. Funding the development of technological solutions that make the construction and real estate industry more sustainable and productive and buildings and their owners more resilient is at the heart of the KOMPAS mission.
Backing early-stage innovation
“It is a great time to be an early-stage investor in the manufacturing industry and the built environment”, says Sebastian Peck, Managing Partner of KOMPAS. “Both sectors are under tremendous pressure to innovate to reduce emissions, improve productivity, and guard against risks ranging from cyber-attacks to supply chain disruptions. At the same time, we are standing at the precipice of a technological revolution. AI will impact every aspect of the operating model of these industries – from generative design to the discovery of new materials to workflow automation. And rapid advancements in robotics offer hope that these industries can overcome chronic labour shortages.”
While decarbonisation is a crucial investment focus for us, there are many other ways technology can improve buildings”,
Sebastian Peck, Managing Partner at KOMPAS VC.
German startup Ecoworks exemplifies these trends. The company has developed an industrial platform for retrofitting houses and improving their energy efficiency. It consists of manufactured roof and façade elements that are fitted seamlessly to a previously scanned building. This approach is minimally invasive. Tenants can stay in the building during the renovation project, which is completed in weeks. Building owners do not have to worry about loss of income during the retrofit, while boosting the energy efficiency of their building in a cost-efficient way. Using digital technology and automation underpins Ecoworks’ business model, differentiating it from a conventional renovation project.
Software and data intelligence
Quantifying emissions, developing a decarbonisation plan, and corresponding investment schedules is challenging for larger real estate portfolios. Reliable data is often difficult to obtain, and the required measures may differ between buildings and across geographies. The demand for a new software category – Real Estate Decision Intelligence “REDI” – is skyrocketing. This is where Optiml’s AI-powered vertical enterprise software comes in. Developed over multiple PhDs at ETH Zurich and Stanford, it enables decisions for the #1 value driver of the largest asset class in the world: Real Estate. It optimises ROI and Net Asset Value (NAV), avoids stranding, and value loss while meeting Net Zero ambitions for buildings and entire portfolios.
Beyond decarbonisation
“While decarbonisation is a crucial investment focus for us, there are many other ways technology can improve buildings”, says Sebastian Peck. Building acoustics is a great example. How a building sounds has a significant impact on how we experience it. Treble Technologies specialises in acoustic design. The company’s founders met during their PhD at Denmark’s Technical University, home to a world-class research cluster for acoustics. Treble has developed a cutting-edge software platform that allows architects and developers to understand what a building sounds like before it is built. This avoids costly remedial work and physical measurements and enables architects to optimise a space for its intended use: to facilitate conversations between people or to ensure that music sounds great and fills the room.
Another dimension is light. Like sound, how light enters a building can dramatically affect how we experience a space. There are many exciting advancements in material science, such as dynamic glazing. Coupled with smart controls, drawing curtains will soon be a thing of the past. Companies like Tynt develop the next generation of dynamic glazing solutions, which can be integrated into windows to control the amount of light entering the room. Integrated with a building management system, dynamic glazing solutions can prevent overheating, create a soothing atmosphere during a hot, bright summer day, and afford privacy at the touch of a button.
“As venture capitalists, our role is to spot these innovations, provide the capital to scale them, and generate a financial return for our investors in the process,” says Sebastian Peck. “Our biggest challenge is to overcome the industry’s innate conservatism and the relentless focus on cost. Our biggest asset is the boundless entrepreneurial energy of the founders we are backing, their passion to change things, and their ambition to build truly transformative companies. I do see signs that the industry’s transformation is accelerating.”
