Construction in Brazil Potential Addressable Market

Addressable Market Calculation

1A: Scalable, Cost-Effective Modular/Prefab Solutions for Social Housing

• Key Assumptions and Rationale:

  1. Annual Volume of New Social Housing Units: The market for scalable, cost-effective modular/prefab solutions is primarily driven by the construction of new units in social housing programs, specifically targeting the low-income segment with government support like Minha Casa Minha Vida (MCMV). We need to estimate the number of such units built annually.
  2. Average Value of Modular/Prefab Components per Unit: The addressable market represents the revenue captured by providers of modular/prefab systems. This value is a significant portion of the total construction cost of a unit, covering the factory-produced modules or panels and potentially the initial on-site assembly. We need to estimate this value per unit.

• Formula: Addressable Market (1A) = (Annual Volume of New Social Housing Units) * (Average Value of Modular/Prefab Components per Unit)

• Researched Numbers with Rationale and Sources:

  1. Annual Volume of New Social Housing Units: The provided text highlights the significant role of MCMV and notes that companies like MRV and Pacaembu deliver tens of thousands of units annually. The total number of new apartments sold in Brazil in 2024 was 400,547, with launches at 383,483 units. [49] While not all of these are specifically "social housing" or MCMV, the text emphasizes MCMV as a key driver and focus for major players. A reasonable estimate for the annual volume of potential social housing units that could adopt modular/prefab can be derived from the total launches/sales numbers, considering the focus of major players on this segment. Let's estimate that a significant portion of the units launched are potentially within the scope of programs that could benefit from modular/prefab, perhaps in the range of 150,000 to 250,000 units annually, reflecting the scale of major players in the segment and the program's reach. [49, 39]
  2. Average Value of Modular/Prefab Components per Unit: The provided text mentions the use of industrialized systems like wood-frame by Construtora Tenda's Alea system. [59] While a specific value per unit is not provided, modular/prefab systems aim to reduce overall construction costs and time. Industry estimates for modular construction suggest that the cost of the modular component can represent 50% to 70% of the total construction cost, excluding land and finishes. Assuming a total construction cost for a social housing unit in the range of R$ 100,000 to R$ 150,000 (a broad estimate based on general market knowledge for affordable housing, not directly in the provided text), the value of the modular/prefab components might be in the range of R$ 50,000 to R$ 105,000 per unit. Let's use a conservative-to- optimistic range of R$ 60,000 to R$ 90,000 for the value captured by the modular/prefab provider per unit.

• Calculated Potential Addressable Market:

  • Lower bound: 150,000 units * R$ 60,000/unit = R$ 9 billion
  • Upper bound: 250,000 units * R$ 90,000/unit = R$ 22.5 billion
  • Potential Addressable Market (1A): R$ 9 billion to R$ 22.5 billion annually.

2B: "One-Stop-Shop" Green Retrofit Services for Residential & Condominiums

• Key Assumptions and Rationale:

  1. Number of Existing Residential/Condominium Units: The market targets the existing stock of residential buildings and condominiums that are candidates for renovation and green retrofits. We need to estimate the number of such units in Brazil.
  2. Annual Penetration Rate of Green Retrofit Services: Not all existing units will undergo renovation or a green retrofit annually. We need to estimate the percentage of units that are likely to seek professional, integrated green retrofit services in a given year. This considers the propensity for home improvements and the growing interest in sustainability.
  3. Average Value of a Green Retrofit Service Project: The addressable market is the total revenue from these services. This includes the assessment, material sourcing, and installation of green features (e.g., solar panels, energy-efficient windows, insulation, efficient lighting). We need to estimate the average value of such a project per unit or per building (for common areas in condos).

• Formula: Addressable Market (2B) = (Number of Existing Residential/Condominium Units) * (Annual Penetration Rate of Green Retrofit Services) * (Average Value of a Green Retrofit Service Project)

• Researched Numbers with Rationale and Sources:

  1. Number of Existing Residential/Condominium Units: The provided text mentions a "significant portion of Brazilians (30%+) planning home improvements for 2025" and an "aging housing stock". [53] While the exact number of residential units isn't in the text, Brazil has a large population and urbanized areas. According to external data (not in provided text but widely available), Brazil has over 70 million permanent private households. A significant portion are in urban areas and multi-unit buildings. Let's estimate the addressable stock of urban residential units and condominiums at around 40 million to 50 million units.
  2. Annual Penetration Rate of Green Retrofit Services: The text notes that "more than 30% of Brazilians intend to carry out renovations in 2025". [53] This indicates a high propensity for renovation. However, "green retrofit" is a more specific and potentially higher-cost service than general renovation. Let's assume a subset of those planning renovations, combined with condominium initiatives for common areas, translates to an annual penetration rate for green retrofit services in the range of 0.5% to 1.5% of the total addressable stock.
  3. Average Value of a Green Retrofit Service Project: The text mentions that the "remodeling market requires R$ 32 billion per year". [22] This suggests a large overall market for renovations. A green retrofit project can range from simple LED lighting upgrades and efficient showerheads to installing solar PV systems, improving insulation, and replacing windows. Let's estimate the average value of a professional green retrofit service project per unit or equivalent (considering common areas in condos) to be in the range of R$ 5,000 to R$ 15,000, depending on the scope and features included.

• Calculated Potential Addressable Market:

  • Lower bound: 40,000,000 units * 0.5% * R$ 5,000/project = R$ 1 billion
  • Upper bound: 50,000,000 units * 1.5% * R$ 15,000/project = R$ 11.25 billion
  • Potential Addressable Market (2B): R$ 1 billion to R$ 11.25 billion annually.

3C: Affordable, Scalable BIM and Digital Construction Platforms for SMEs

• Key Assumptions and Rationale:

  1. Number of Construction SMEs: The target market is small and medium-sized construction businesses in Brazil. We need an estimate of their number, as they represent the potential customers for the digital platform.
  2. Target Penetration Rate: The potential addressable market represents the potential size if the solution were widely adopted by the target segment. We need to estimate a realistic target penetration rate for these platforms among construction SMEs within a defined period (e.g., 5 years).
  3. Average Annual Revenue per Adopting SME: The addressable market is the total revenue generated by the platform from adopted users. This revenue comes from subscriptions or usage fees paid by the adopting SMEs. We need to estimate the average annual fee an SME would pay.

• Formula: Addressable Market (3C) = (Number of Construction SMEs) * (Target Penetration Rate) * (Average Annual Revenue per Adopting SME)

• Researched Numbers with Rationale and Sources:

  1. Number of Construction SMEs: The provided text emphasizes that "the vast majority of construction companies in Brazil are SMEs". [22] While a precise number for construction SMEs isn't given, external data (not in provided text) suggests there are hundreds of thousands of construction companies in Brazil, with SMEs forming the bulk. Let's estimate the number of potential SME targets for a digital platform in the range of 300,000 to 500,000 companies.
  2. Target Penetration Rate: The text notes the "low digitalization" and "limited BIM use" among SMEs as challenges [28], but also mentions the "Federal Decree 11.888/2024 requiring BIM in public works" as a driver [53]. This regulatory push, combined with the need for productivity gains, could drive adoption over time. Let's assume a target penetration rate for an affordable, scalable solution in the range of 10% to 20% of construction SMEs within a few years.
  3. Average Annual Revenue per Adopting SME: The platform is described as "affordable, scalable". [Qualif] This suggests a pricing model accessible to SMEs, likely a subscription. Depending on the features offered, a reasonable annual subscription might range from R$ 1,200 to R$ 3,000 per SME, reflecting lower costs compared to enterprise solutions.

• Calculated Potential Addressable Market:

  • Lower bound: 300,000 SMEs * 10% * R$ 1,200/SME/year = R$ 36 million
  • Upper bound: 500,000 SMEs * 20% * R$ 3,000/SME/year = R$ 300 million
  • Potential Addressable Market (3C): R$ 36 million to R$ 300 million annually (at a hypothetical mature penetration level).

4A: Turnkey Sustainable Material Sourcing & Integration Services

• Key Assumptions and Rationale:

  1. Total Value of Construction Materials Market: The service is directly tied to the procurement of materials. We need to estimate the overall size of the construction materials market in Brazil.
  2. Percentage of Projects Using Sustainable Materials: Not all projects currently prioritize or utilize sustainable materials. We need to estimate the portion of the total materials market value that is, or is projected to be, spent on sustainable materials that would require specialized sourcing/integration services. This reflects the current and growing adoption of green building practices.
  3. Service Fee Percentage: The addressable market is the revenue generated by the sourcing/integration service provider. This is assumed to be a percentage of the value of the sustainable materials sourced. We need to estimate this percentage.

• Formula: Addressable Market (4A) = (Total Value of Construction Materials Market) * (Percentage of Projects Using Sustainable Materials) * (Service Fee Percentage)

• Researched Numbers with Rationale and Sources:

  1. Total Value of Construction Materials Market: The text states that the "total market for construction materials was estimated at R$ 202 billion in 2021". [40] While this is from 2021, it provides a baseline. The retail market for construction materials grew by 5% from January to October 2024 [40], and the sector expects 3% growth in 2025. [53] Let's use a rounded estimate based on the 2021 figure and recent growth, placing the current total materials market value in the range of R$ 220 billion to R$ 250 billion annually.
  2. Percentage of Projects Using Sustainable Materials: The text mentions "Growing consumer awareness and demand for energy efficiency and sustainability" and "Increasing demand for green buildings". [Qualif] However, a specific percentage of the market using certified sustainable materials is not provided. This is an emerging area. Let's estimate that currently, a small but growing percentage of the materials market value is attributable to explicitly sustainable or certified green materials, perhaps in the range of 2% to 5%, with potential for growth.
  3. Service Fee Percentage: A turnkey sourcing and integration service would likely charge a fee based on the complexity and value added. This fee could cover identification, verification, procurement, and potentially logistical coordination of sustainable materials. Let's estimate this service fee as a percentage of the material cost, ranging from 5% to 10%.

• Calculated Potential Addressable Market:

  • Lower bound: R$ 220 billion * 2% * 5% = R$ 0.22 billion = R$ 220 million
  • Upper bound: R$ 250 billion * 5% * 10% = R$ 1.25 billion
  • Potential Addressable Market (4A): R$ 220 million to R$ 1.25 billion annually.

4D: CDW Valorization & Upcycled Product Development

• Key Assumptions and Rationale:

  1. Annual Volume of CDW Generated: The market is based on processing construction and demolition waste. We need to estimate the total volume of CDW generated in Brazil each year.
  2. Percentage of CDW Available for Upcycling: Not all CDW is suitable or economically viable for high-value upcycling; proper segregation and material types are factors. We need to estimate the percentage of the total CDW volume that can be captured and processed for upcycled product development beyond basic recycling.
  3. Average Value Recovered per Unit of Upcycled CDW: The addressable market is the revenue generated from selling the upcycled products. We need to estimate the market value created per unit of processed CDW suitable for upcycling (e.g., per ton or cubic meter).

• Formula: Addressable Market (4D) = (Annual Volume of CDW Generated) * (Percentage of CDW Available for Upcycling) * (Average Value Recovered per Unit of Upcycled CDW)

• Researched Numbers with Rationale and Sources:

  1. Annual Volume of CDW Generated: The provided text mentions "Construction and Demolition Waste (CDW) management (per CONAMA Resolution 307 / Law 12.305/2010)" as a challenge [Qualif], and CONAMA Resolution 307 provides national guidelines [Value Chain]. However, a specific nationwide annual volume of CDW generated is not provided in the text. External data (not in provided text) indicates that CDW generation in Brazil is substantial, often measured in millions of tons per year. Let's use an estimated range of 40 million to 60 million tons of CDW generated annually nationwide, recognizing this is an external estimate.
  2. Percentage of CDW Available for Upcycling: Current CDW management is often focused on basic disposal or low-value recycling [Qualif]. High-value upcycling requires cleaner streams and specific material types. Let's assume that with improved segregation and technology, a significant portion, but not all, could be available for upcycling, perhaps in the range of 10% to 20% of the total volume.
  3. Average Value Recovered per Unit of Upcycled CDW: The value recovered depends heavily on the type of upcycled product (e.g., high-quality aggregates, precast elements, panels). Basic recycled aggregates have a lower value than potentially more advanced upcycled products. Let's estimate a broad range for the value recovered per ton of CDW available for upcycling, say R$ 50 to R$ 150 per ton, reflecting the value of the resulting products.

• Calculated Potential Addressable Market:

  • Lower bound: 40,000,000 tons * 10% * R$ 50/ton = R$ 200 million
  • Upper bound: 60,000,000 tons * 20% * R$ 150/ton = R$ 1.8 billion
  • Potential Addressable Market (4D): R$ 200 million to R$ 1.8 billion annually.

5B: "Construction Robotics as a Service (RaaS)"

• Key Assumptions and Rationale:

  1. Total Value of Labor in Construction: RaaS is a service that substitutes or augments human labor. The potential market is related to the overall cost of labor in the industry. We need to estimate the total value of labor in the Brazilian construction sector.
  2. Percentage of Labor Tasks Suitable for Robotics: Not all construction tasks can currently or realistically be performed by robots. We need to estimate the portion of total labor cost that is spent on tasks potentially amenable to automation via robotics (e.g., repetitive, heavy, or hazardous tasks like bricklaying, painting, concrete pouring, rebar tying).
  3. Target Penetration Rate of RaaS: RaaS is an emerging technology in Brazil. The potential addressable market represents the potential size if the solution were adopted for a certain portion of suitable tasks. We need to estimate a realistic target penetration rate for RaaS within the suitable labor tasks.
  4. Percentage of Equivalent Labor Cost Charged by RaaS: The RaaS provider's revenue comes from charging for the use of the robots, which replaces or supplements the cost of manual labor. We need to estimate the percentage of the original labor cost for a task that the RaaS provider would capture as their service fee.

• Formula: Addressable Market (5B) = (Total Value of Labor in Construction) * (Percentage of Labor Tasks Suitable for Robotics) * (Target Penetration Rate of RaaS within suitable tasks) * (Percentage of Equivalent Labor Cost Charged by RaaS)

• Researched Numbers with Rationale and Sources:

  1. Total Value of Labor in Construction: The text states that the sector employed over 2.858 million formal workers in 2024 with an average admission salary of R$ 2,335.69 in October 2024. [31] This provides a basis for estimating formal labor costs. Assuming this average monthly salary across all formal workers for a year (acknowledging this is a simplification and doesn't include full labor costs like benefits, taxes, or informal labor), an approximate lower bound for formal labor cost could be 2.858M * R$ 2,335.69 * 12 months ≈ R$ 80 billion. Considering full labor burden and informal labor (which is significant), the total value of labor could be substantially higher. Let's broadly estimate the total value of labor (formal and informal, including burden) in the range of R$ 150 billion to R$ 250 billion annually.
  2. Percentage of Labor Tasks Suitable for Robotics: This is a highly uncertain estimate. Currently available construction robots are specialized. Let's assume that tasks suitable for current or near-future robotics represent a portion of the total labor cost, perhaps in the range of 5% to 15%.
  3. Target Penetration Rate of RaaS: RaaS is identified as an "Emerging/Niche" whitespace with very low adoption [Qualif]. Let's estimate a target penetration rate for RaaS within the suitable tasks in the range of 1% to 5% within a few years, reflecting early adoption of this innovative service.
  4. Percentage of Equivalent Labor Cost Charged by RaaS: RaaS providers would charge a fee that is competitive with, or offers cost savings compared to, manual labor, while also covering their equipment and operational costs. Let's assume the RaaS fee captures a significant portion, say 60% to 90%, of the equivalent manual labor cost for that task.

• Calculated Potential Addressable Market:

  • Lower bound: R$ 150 billion * 5% * 1% * 60% = R$ 45 million
  • Upper bound: R$ 250 billion * 15% * 5% * 90% = R$ 1.6875 billion
  • Potential Addressable Market (5B): R$ 45 million to R$ 1.6875 billion annually (at a hypothetical mature penetration level of suitable tasks). This range reflects the highly uncertain nature of robotics adoption and the portion of labor that can be automated.

6D: Digital Platforms for Regulatory Compliance and Permit Management

• Key Assumptions and Rationale:

  1. Annual Volume of Construction Projects Requiring Permits: The market is centered around the process of obtaining permits. We need to estimate the number of construction projects initiated annually that require formal permitting from municipal or other authorities. This could include new builds, major renovations, and infrastructure projects.
  2. Average Cost of Permit Management per Project: Obtaining permits involves direct fees, labor costs (internal staff or consultants), and time costs associated with delays. We need to estimate the average cost associated with the permit management process for a typical project.
  3. Target Penetration Rate of the Digital Platform: The potential addressable market represents the potential size if the solution were widely adopted. We need to estimate the percentage of projects where a digital platform would be used to manage the permitting process, capturing value by streamlining or automating parts of it, at a hypothetical mature penetration level.

• Formula: Addressable Market (6D) = (Annual Volume of Construction Projects Requiring Permits) * (Average Cost of Permit Management per Project) * (Target Penetration Rate of the Digital Platform)

• Researched Numbers with Rationale and Sources:

  1. Annual Volume of Construction Projects Requiring Permits: The text mentions "slow municipal licensing" [28] and "obtaining necessary permits, licenses (Alvarás), and environmental approvals from multiple municipal, state, and federal agencies is notoriously slow, cumbersome, and often unpredictable" [Value Chain]. While a direct number of projects requiring permits isn't given, new residential launches in 2024 were 383,483 units [49], and the top 100 companies had over 57.7 million square meters under construction in 2024 [49]. Every formal project requires permits. Let's consider residential units and a portion of other formal projects. Assuming each residential launch corresponds to at least one primary permit process, and accounting for other building types and infrastructure, the number of formal projects requiring significant permit management annually could be in the range of 500,000 to 1,000,000 projects (a broad estimate covering residential units, commercial, and infrastructure projects).
  2. Average Cost of Permit Management per Project: This cost includes direct fees, labor, and the cost of delays. The text highlights that bureaucracy adds "significant delays to project kick-offs" [Value Chain] and "increases administrative overheads" [Value Chain]. Let's estimate the average cost associated with navigating the permit process per project, including internal/external labor and administrative costs, in the range of R$ 2,000 to R$ 5,000 per project (this is a rough estimate as costs vary widely by project size and location).
  3. Target Penetration Rate of the Digital Platform: This whitespace is identified as having "Strong" market signals [Qualif], suggesting a good potential for adoption due to a clear pain point. Let's estimate a target penetration rate for a digital platform at maturity in the range of 10% to 25% of the projects requiring permits.

• Calculated Potential Addressable Market:

  • Lower bound: 500,000 projects * R$ 2,000/project * 10% = R$ 100 million
  • Upper bound: 1,000,000 projects * R$ 5,000/project * 25% = R$ 1.25 billion
  • Potential Addressable Market (6D): R$ 100 million to R$ 1.25 billion annually (at a hypothetical mature penetration level).

7E: Climate-Resilient Infrastructure Solutions

• Key Assumptions and Rationale:

  1. Total Annual Investment in Infrastructure: The market is a component of overall infrastructure spending. We need to estimate the total annual investment in infrastructure projects in Brazil.
  2. Percentage of Investment Allocated to Climate Resilience: Addressing climate resilience involves additional costs in design, materials, and construction techniques compared to traditional infrastructure. We need to estimate the percentage of total infrastructure investment that would be specifically allocated to climate resilience features or services.

• Formula: Addressable Market (7E) = (Total Annual Investment in Infrastructure) * (Percentage of Investment Allocated to Climate Resilience)

• Researched Numbers with Rationale and Sources:

  1. Total Annual Investment in Infrastructure: The text highlights "Significant investments are anticipated and already flowing into transportation... sanitation... energy... urban mobility" [Qualif]. It mentions "R$ 104 billion M&A in infrastructure in 2024, a 223% increase" [Qualif]. This indicates significant transactional value but not total investment value. External reports on Brazil's infrastructure investment (not in provided text) often cite figures in the range of 1.5% to 2.5% of GDP. Using the 2024 construction GDP of R$ 359.523 billion as a proxy for a significant portion of industry activity [31], and considering overall infrastructure needs, let's broadly estimate the total annual investment in infrastructure projects in the range of R$ 100 billion to R$ 200 billion annually (acknowledging this is a high-level estimate based on the context of significant investment mentioned).
  2. Percentage of Investment Allocated to Climate Resilience: This is a rapidly growing but still nascent area. Incorporating climate resilience involves additional costs for studies, design, and potentially more robust materials or construction methods. Let's estimate that the focus on climate resilience could add an additional percentage to project costs or represent a dedicated budget for upgrades/new features, in the range of 3% to 8% of the total infrastructure investment in relevant projects.

• Calculated Potential Addressable Market:

  • Lower bound: R$ 100 billion * 3% = R$ 3 billion
  • Upper bound: R$ 200 billion * 8% = R$ 16 billion
  • Potential Addressable Market (7E): R$ 3 billion to R$ 16 billion annually.

8A: Fintech-Driven Supply Chain Finance for Small Construction Businesses

• Key Assumptions and Rationale:

  1. Total Value of Transactions Involving Construction SMEs: The market facilitates financing for transactions within the construction supply chain involving SMEs (e.g., payments from larger contractors to subcontractors, or payments from SMEs to suppliers). We need to estimate the total value of these relevant transactions annually.
  2. Target Penetration Rate of the Fintech Platform: The potential addressable market represents the potential size if the solution were widely adopted. We need to estimate the percentage of these transactions that would be financed or processed through the fintech platform at a hypothetical mature penetration level.
  3. Average Financing Fee Percentage: The addressable market is the revenue generated by the fintech platform, which comes from financing fees (e.g., invoice discounting fees, interest on short-term credit). We need to estimate the average percentage charged per transaction financed.

• Formula: Addressable Market (8A) = (Total Value of Transactions Involving Construction SMEs) * (Target Penetration Rate of the Fintech Platform) * (Average Financing Fee Percentage)

• Researched Numbers with Rationale and Sources:

  1. Total Value of Transactions Involving Construction SMEs: This is very difficult to estimate directly from the provided text. SMEs form the "backbone of the industry's workforce and project execution capacity at a local level" [Value Chain] and collectively account for a substantial portion of employment and activity [Value Chain]. The overall industry GDP was R$ 359.523 billion in 2024 [31]. Let's assume a significant portion of this GDP involves transactions with or by SMEs. If SMEs contribute, say, 30% to 40% of the total industry value, the total transaction value involving them (payments received, payments made) could be in the range of R$ 100 billion to R$ 150 billion annually (a very rough estimate).
  2. Target Penetration Rate of the Fintech Platform: Fintech for SME supply chain finance is an emerging area with "Strong" market signals [Qualif]. Let's estimate a target penetration rate at maturity in the range of 5% to 15% of the relevant transaction volume.
  3. Average Financing Fee Percentage: Fintechs charge fees for providing faster access to cash. These fees vary based on risk, duration, and the specific service (e.g., invoice discounting). Let's estimate an average financing fee percentage in the range of 1% to 3% of the transaction value financed.

• Calculated Potential Addressable Market:

  • Lower bound: R$ 100 billion * 5% * 1% = R$ 50 million
  • Upper bound: R$ 150 billion * 15% * 3% = R$ 675 million
  • Potential Addressable Market (8A): R$ 50 million to R$ 675 million annually (at a hypothetical mature penetration level).

9A: AI-Powered Predictive Quality Management Systems

• Key Assumptions and Rationale:

  1. Total Value of Construction Projects: The market for this service is tied to the value of construction projects where quality management is critical. We can use the overall industry GDP or project values as a proxy.
  2. Percentage of Project Value Allocated to Quality Management: Construction projects allocate a portion of their budget to quality control and assurance activities. We need to estimate this percentage.
  3. Target Penetration Rate of AI Systems: AI-powered predictive systems are a new approach. The potential addressable market represents the potential size if the solution were adopted for a certain portion of quality management activities. We need to estimate a realistic target penetration rate for these systems.
  4. Percentage of Quality Management Spend Captured by the AI System: The AI system provides tools and insights for quality management. We need to estimate the portion of the traditional quality management spend that would be captured by the cost of using the AI system (e.g., subscription fees, implementation costs) in projects where it is adopted.

• Formula: Addressable Market (9A) = (Total Value of Construction Projects) * (Percentage of Project Value Allocated to Quality Management) * (Target Penetration Rate of AI Systems) * (Percentage of Quality Management Spend Captured by the AI System)

• Researched Numbers with Rationale and Sources:

  1. Total Value of Construction Projects: The industry's GDP was R$ 359.523 billion in 2024. [31] This represents the total value added. We can use this figure as a proxy for the overall scale of construction activity, acknowledging that total project value might be higher (including materials not counted in value added). Let's use the R$ 350 billion to R$ 400 billion range as the approximate total value of construction projects annually.
  2. Percentage of Project Value Allocated to Quality Management: This varies by project type and complexity. Based on general industry benchmarks (not in provided text), quality management costs (labor, inspections, testing) can range from 1% to 3% of project value. Let's use this range.
  3. Target Penetration Rate of AI Systems: AI-powered predictive quality management is identified as "Emerging/Highly Innovative" [Qualif], indicating very early adoption. For a potential market size at maturity, let's estimate a target penetration rate in the range of 2% to 8% of projects or quality management budgets.
  4. Percentage of Quality Management Spend Captured by the AI System: The cost of an AI system would likely replace or supplement some traditional quality management activities. Let's estimate that the cost of the AI system captures 40% to 70% of the equivalent traditional quality management spend for the projects where it is adopted.

• Calculated Potential Addressable Market:

  • Lower bound: R$ 350 billion * 1% * 2% * 40% = R$ 28 million
  • Upper bound: R$ 400 billion * 3% * 8% * 70% = R$ 672 million
  • Potential Addressable Market (9A): R$ 28 million to R$ 672 million annually (at a hypothetical mature penetration level).

10B: "Smart Building as a Service" (SBaaS) for SMEs & Residential Condominiums

• Key Assumptions and Rationale:

  1. Number of Target Buildings/Units: The market targets existing SME commercial buildings and residential condominium units. We need to estimate the number of such potential customer units/buildings in Brazil.
  2. Target Penetration Rate of SBaaS: The potential addressable market represents the potential size if the solution were widely adopted. We need to estimate the percentage of these target buildings/units that would adopt an SBaaS model at a hypothetical mature penetration level.
  3. Average Annual Subscription Fee per Building/Unit: The addressable market is the recurring revenue from SBaaS subscriptions. We need to estimate the average annual fee paid per building or per residential unit.

• Formula: Addressable Market (10B) = (Number of Target Buildings/Units) * (Target Penetration Rate of SBaaS) * (Average Annual Subscription Fee per Building/Unit)

• Researched Numbers with Rationale and Sources:

  1. Number of Target Buildings/Units: This is challenging to estimate precisely from the text. We know Brazil has a large urban population and many residential and commercial buildings. Let's broadly estimate the number of relevant SME commercial buildings and residential condominium units that are potential candidates for SBaaS in the range of 10 million to 20 million units/buildings (this is a very rough estimate).
  2. Target Penetration Rate of SBaaS: SBaaS is identified as having "Moderate to High" disruption potential [Qualif] and "Moderate" market signals [Qualif], with growing interest in smart technologies [53]. Let's estimate a target penetration rate at maturity in the range of 1% to 5% of the target buildings/units.
  3. Average Annual Subscription Fee per Building/Unit: The fee would cover smart device usage, software, maintenance, and support. For a residential unit or a small commercial space, a plausible annual subscription might range from R$ 300 to R$ 800 per unit/equivalent, depending on the services included (e.g., security monitoring, energy management, automation).

• Calculated Potential Addressable Market:

  • Lower bound: 10,000,000 units/buildings * 1% * R$ 300/unit/year = R$ 30 million
  • Upper bound: 20,000,000 units/buildings * 5% * R$ 800/unit/year = R$ 800 million
  • Potential Addressable Market (10B): R$ 30 million to R$ 800 million annually (at a hypothetical mature penetration level).

References

• CBIC projeta crescimento de 4,1% para a construção civil em 2024, mas desafios persistem para 2025 – CBIC (https://cbic.org.br/cbic-projeta-crescimento-de-4-1-para-a-construcao-civil-em-2024-mas-desafios-persistem-para-2025/)
• CBIC avalia desempenho do setor imobiliário em 2024 e perspectivas para 2025 – CBIC (https://cbic.org.br/cbic-avalia-desempenho-do-setor-imobiliario-em-2024-e-perspectivas-de-crescimento-para-2025/)
• Conheça quais são as tendências para construção civil em 2025 – AECweb (https://www.aecweb.com.br/cont/cl/tendencias-para-construcao-civil-em-2025_21874_17)
• COST OVERRUN GAP ANALYSIS IN CONSTRUCTION PROJECTS – Engineering Research Journal (https://erj.journals.ekb.eg/article_308141_3147290d5d7b7cf48704b4841519c653.pdf)
• Labor shortage hits Brazil and 60 % of companies struggle to hire – Click Oil and Gas (https://clickoilandgas.com.br/noticia/2024/11/23/labor-shortage-hits-brazil-and-60-of-companies-struggle-to-hire-or-retain-professionals)
• Mais de 30 % dos brasileiros pretendem realizar reformas em 2025 – Jornal do Brás (https://jornaldobras.com.br/geral/mais-de-30-dos-brasileiros-pretendem-realizar-reformas-em-imoveis-em-2025-diz-pesquisa/)
• Master House Manutenção e Reformas - A maior empresa de manutenção e reformas do Brasil (masterhouse.com.br)
• O que é CNO (Cadastro Nacional de Obras) - CBRdoc (cbrdoc.com.br)
• Qual o panorama da construção civil no Brasil em 2025? – Palfinger (https://www.palfinger.com/pt-br/noticias/qual-o-panorama-da-construcao-civil-no-brasil-em-2025)
• Receita Federal altera regras do RET: impacto da IN RFB nº 2.256/2025 – Tafelli Ritz Advogados (https://tafelliritz.com.br/receita-federal-altera-regras-do-ret-para-a-construcao-civil-entenda-o-impacto-da-in-rfb-no-2-256-2025/)
• SPBIM (www.spbim.com)
• Study on the factors of delay in construction works – SciELO (https://www.scielo.br/j/ram/a/zCj5nJgS7J75f7wL7bcyRqn/?lang=en)
• THE CUSTOMER SERVICING PROCESS IN THE BRAZILIAN HOUSE BUILDING INDUSTRY – CORE (https://core.ac.uk/download/pdf/11853532.pdf)
• Valor Econômico (Via abrainc.org.br - https://www.abrainc.org.br/noticias/mercado-de-capitais-supera-poupanca-no-financiamento-imobiliario-valor-economico/)