Xpanner, a California-based startup automating construction equipment through robotics and physical AI, has secured $18 million in a Series B funding round. The company is growing revenue quickly with a high-margin subscription approach that transforms existing machinery without replacement.
- Transforms existing machinery without rip-and-replace
- Revenue grew from $3M in 2023 to $21M in 2025
- Targets $60M ARR with above 80% gross margins
What happened
Xpanner raised $18 million in a Series B bridge round led by Korea Investment Partners, with participation from KB Investment Co. This brings the startup’s total funding to $38 million since its launch in 2020. The company moved its headquarters from South Korea to California in 2023 as it expanded its U.S. operations.
Xpanner’s technology retrofits existing construction equipment with robotics and physical AI, enabling automation without replacing machines. The startup serves major clients such as Mortenson, Black & Veatch, and QCells. Its revenue surged from $3 million in 2023 to $21 million in 2025, and it expects to reach $60 million in annual recurring revenue by the end of 2026.
Why it matters
By automating equipment customers already own, Xpanner eliminates significant upfront costs typically associated with construction automation. The model allows clients to gain new automation capabilities through software updates rather than hardware replacement, lowering adoption barriers and shortening project timelines.
Xpanner’s subscription-based Automation-as-a-Service approach delivers scalable, high-margin revenue, maintaining gross margins above 80%. This asset-light model leverages software economics in a traditionally hardware-heavy industry, enabling rapid account expansion with minimal incremental costs and near-zero churn.
What to watch next
The company intends to invest its new capital in advancing its physical AI hardware and software platform, enhancing core engineering capabilities, and expanding data and AI infrastructure. This includes moving fully to the subscription model by the end of the year, shifting away from one-time hardware sales.
Xpanner is actively expanding into adjacent markets like battery energy storage systems and AI data center construction. Its approach to automated construction and digital transformation could set new industry standards, positioning it as a key player at the intersection of robotics, AI, and construction technology.