Construction worker in safety gear reviewing building plans on a tablet at a job site.

11/3/2025 Technology & Services Thought Leadership

The Durable Growth Opportunity in Construction Software

The North American construction industry, a nearly $4 trillion market, is at a digital inflection point. Productivity has severely lagged for decades; value added per worker is ~30-40% lower than in 1970 while overall U.S. productivity in other industries has tripled, leaving a large efficiency gap that software can close by 50-60%. Construction software revenues in North America are set to exceed $4 billion in 2025, with growth tracking 9%+ CAGR over the next decade, presenting a massive durable investment opportunity for early movers in the space.

Within construction end-markets, commercial and industrial (C&I) activity is leading software adoption as owners and general contractors (GC) prioritize schedule certainty, compliance and lifecycle asset data (e.g., hyperscale/industrial and infrastructure) and as project complexity favors larger platforms like Procore, Autodesk Construction Cloud, Bentley’s ProjectWise/SYNCHRO and Trimble Construction One. Residential remains large but more fragmented; Adoption is bifurcated with production builders and multi-family operators digitizing faster than small, single-family firms that still rely on paper and point solutions. Tight labor markets, permitting bottlenecks and rate sensitivity have also created more stop-start dynamics in residential vs. steadier, programmatic spend in C&I.

Five themes stand out for investors and operators in the current landscape.

The Productivity Mandate: Doing More with Less
Pen-and-paper workflows persist across planning, field ops and close-out, precisely where software can unlock the largest gains. Adoption tailwinds are structural, such as the shortage of skilled labor, with construction job openings averaging ~50% higher in 2020-24 vs. 2015-19; more than half of contractors reporting project delays due to labor-related issues; and 98% of firms planning to invest in technology to offset labor scarcity. North America captured ~60% of global construction tech (ConTech) venture funding in 2024, reflecting capital’s conviction that digitization is accelerating where the productivity gap is widest. European markets are also leaning in: EU public-sector programs and sustainability mandates (e.g., energy performance and embodied-carbon reporting) are catalyzing digitization across design, asset management and compliance, with the U.K., Nordics and DACH showing strong BIM, CDE and field adoption.
The Rise of the Connected Job Site
The cloud is stitching together field and back office, enabling real-time budget, schedule and quality control. The North American cloud construction software market is projected to climb from ~$3 billion in 2022 to over $10 billion by 2030, with North America expecting to be a key region driving growth holding ~40% of global construction SaaS share. Connectivity, coupled with generative AI (GenAI), will turbocharge growth. GenAI in construction is forecast to grow ~20% CAGR through 2032, with use cases spanning safety monitoring, progress verification, automated RFIs/submittals and predictive scheduling. We expect broader deployment of robotics, real-time virtual monitoring services, digital twins/3D modeling and edge compute to accelerate in-field deployment over the next 3-5 years as the construction labor force continues to face constraints.
Platform Consolidation: The Race to Become the System of Record
Financial sponsors and strategics are moving from point tools to vertical platforms that unify pre-con, project delivery and financials into a single system of record that manages a digital thread throughout the project lifecycle. This shift has fueled M&A deal activity in ConTech, averaging ~100 acquisitions globally per year in the 2024-2025 YTD timeframe, as sponsors continue to acquire scalable platforms and strategic activity remains robust. The primary attraction is classic vertical SaaS: predictable, high‑margin recurring revenue with strong data moats. Late‑stage round sizes in North America average ~$50 million, arming new entrants to keep innovating in emerging areas.

Recent large-scale transactions underscore the strategic value of scaled assets:
- CompanyCam’s ~$415M Series C capital raise (August 2025), led by B Capital, provides a war chest of capital to a leading job site productivity platform, aiming to accelerate the development and adoption of its real-time field service management tools for contractors;
- Verisk’s acquisition of AccuLynx for ~$2.4 billion (July 2025) combined a leading insurance data analytics provider with a top SaaS platform for roofing contractors, aiming to create a deeply integrated network for claims and restoration workflows;
- Nemetschek’s acquisition of GoCanvas for ~$770 million (July 2024) brought a leading field worker collaboration software into the fold of a major AEC/O software provider, strengthening its offering for digitizing onsite processes like inspections and data collection.
Over the next 3-5 years, we expect winners to standardize data models, APIs and workflows that make them the default source of truth.
The Subcontractor: A Massively Underserved Market
Subcontractors (subs) are the industry’s engine and represent the vast majority of firms within the ~4 million U.S. construction businesses that exist today. They shoulder labor, materials and execution risk yet are chronically under-invested in when it comes to technology, struggling with late payments and administrative burden. Purpose‑built software for trades (bidding, scheduling, field tracking, change orders, lien/waiver management) can automate timekeeping, documentation and compliance while improving gross margin capture. Field service management capabilities (dispatch, route optimization and work-order management) are increasingly converging with construction field-ops, especially for specialty areas such as HVAC, electrical, plumbing, roofing and specialty service providers. Given the segment’s fragmentation and size, focused go-to-market into subs offers a fast path to scale and durable network effects as workflows link GCs and trades. Churn will continue to be a challenge but vendors that can reach and hold subs via mandates from larger GCs will carry an advantage.
Embedded Finance: The Next Frontier of Value
Embedding payments, working-capital finance and insurance directly into construction workflows addresses the industry’s biggest pain point: cash flow. Globally, embedded finance is projected to grow at a 30%+ CAGR, from ~$80 billion in 2023 to ~$600 billion by 2030. In construction, on-platform pay apps, progress‑based disbursements, material financing with <120‑day terms and escrow‑like controls can compress days sales outstanding, reduce disputes and improve project liquidity. For software vendors, embedded finance expands ARPU, boosts retention and widens TAM as financial flows integrate with project data and ERP bridges. This represents a true “win-win” for all parties involved.

The Bottom Line:

A large, under-digitized construction market with structural labor constraints is finally adopting cloud, AI and integrated software solutions. Consolidation will reward systems that become the source of truth, while the subcontractor segment and embedded finance open new vectors for rapid scale, monetization and defensible growth for years to come.

To discuss these topics further, contact a member of our Industrial & AEC Software team.

Rodd Langenhagen
North America
+1-617-247-8376
rlangenhagen@rwbaird.com

Tom Schadewald
North America
+1-414-298-7479
tschadewald@rwbaird.com

Dan Bruton
Europe
+44-20-7667-8443
dbruton@rwbaird.com

Sources: Business Wire, ConTech Roundup Blog, Federal Reserve Bank of Richmond, Global Markets Insights, Globe Newswire, Grand View Research, IBISWorld, LinkedIn, McKinsey & Company, Mordor Intelligence, Panasonic Connect Blog, Pitchbook, Precedence Research, PR Newswire, Proptech Jobs, SiteNews, StartUs Insights, U.S. Bureau of Labor Statistics, University of Chicago.

The Durable Growth Opportunity in Construction Software

Five themes stand out for investors and operators in the current landscape.

The Bottom Line:

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