Evaluating factors affecting construction technology start-up investments and investor behavior

Digitalization has become essential for the construction sector to increase productivity and maintain a competitive position. Construction technology (Contech) start-ups play a critical role in driving this digital transformation by offering innovative solutions to the industry's unique challenges. Understanding investor behavior is important for business owners seeking funding in order to exist and create their products or services. In this regard, the purpose of this study is to create a conceptual model for assessing the variables influencing the investment amount and motivation of Contech investors. We analyzed the data from 48 investors with experience investing in Contech start-ups using partial least squares structural equation modeling (PLS-SEM). The findings showed that investor familiarity, entrepreneur characteristics, and environmental factors significantly influence investor's approach to Contech investments. Additionally, investor and market and product characteristics directly impact Contech investment motivation. Lastly, even though the long-term prospects of Contech are positive, short-term financial constraints cause investors to have a small share in their portfolio. This study contributes to the body of knowledge by identifying and analyzing key factors influencing investments in start-ups that support the digitalization process within the construction industry. Theoretically, it advances understanding of investment behaviors and strategic considerations in the context of industry digitalization. As a practical contribution, it offers insights for investors, and start-ups on how to foster business growth and innovation through targeted investment strategies.