Revolutionizing the construction industry through Augmented Reality: Why we invested in XYZ Reality

XYZ Reality, a Construction Tech startup from London, UK, recently announced that it had raised £5M to set the foundations for the company’s ambitious vision: to substitute the use of 2D drawings at the construction side with Augmented Reality. Adara Ventures participated in the round, which was co-led by Amadeus Capital Partners and Hoxton Ventures and counted with a strategic investment from J.Coffey Ltd.

We are delighted to welcome David Mitchell (CEO), Umar Ahmed (COO), Murray Hendriksen (CTO) and the rest of the XYZ Team to Adara’s portfolio, as we look forward to backing them in demolishing one of the industry’s largest obstacles to efficiency: 3D-2D conversion.

(The XYZ team, centre from L-R Umar, David and Murray)

The Holosite: the only Augmented Reality headset with the millimetric accuracy required by the industry

XYZ Reality have developed the Holosite, an Augmented Reality enabled headset, that overlays the construction models and plans in 3D over the physical site. The Holosite’s millimetric accuracy speeds up on-site construction, and eliminates costly remediation work.

Construction Reworks: a $450bn p/a problem

Despite its relevance as a key economic sector, the $10trn construction sector has remained relatively slow to adopt new IT technologies. In fact, McKinsey considers construction to be the second least digitalized industry only after agriculture.

The lack of digitalization and innovation spending has resulted in a vicious cycle as the industry faces structural problems associated to low productivity: large projects regularly take 20% longer than scheduled and can end up 80% over budget. The lack of a differentiated approach to these problems puts further pressure on margins which were already low (average EBT for general contractors is between 1.4% and 2.4%), and in turn, on innovation spending.

One of the largest bottlenecks in the industry is 3D-2D conversion and verification. Ironically, on-site construction relies on the conversion of the Building Information Model to 2D drawings from their original 3D format.

“2D is an unnatural language for humans; we see everything in 3D, yet tradespeople are being asked to interpret 2D drawings, conceptualise the 3D asset and then build the asset on-site to within construction “tolerances”.

dAVID mITCHELL, ceo

Once the building stage is finished, a time-consuming and inefficient validation process is undertaken to ensure that the actions taken from the 2D plans correspond to the original 3D model. Work that fails this process requires remediation, and totals 7–11% of a construction budget. The process takes weeks, is costly and inefficient, and can lead to litigation and disputes. In total, this problem currently costs the industry $450Bn per annum in reworks.

XYZ Reality’s AR solution, the Holosite, removes the need for 3D-2D conversion and minimizes the validation process, saving constructors up to 20% of the costs of a project.

We at Adara Ventures, are excited to join forces with XYZ Reality. The Holosite’s value proposition has the potential to alter the construction industry dramatically, and places them at the core of technological innovation in a massive market.