FOETZ, Luxembourg -- Leko Labs, a construction startup that’s developing sustainable wood-based building materials as an alternative to steel and concrete and applying automation to construction methods, has closed a $21 million Series A round of funding.

The raise is led by urban sustainability-focused fund 2150 with participation from Microsoft’s Climate Innovation Fund, Tencent, AMAVI, Rise PropTech Fund, Extantia and Freigeist.

In announcing the financing, Leko Labs said that currently, 39 percent of greenhouse gases come from buildings. This represents 8% of global CO₂ emissions. "We work to replace the concrete and steel of traditional construction with wood (naturally storing carbon) by combining it with robotic manufacturing and AI optimization to move towards full carbon-negative construction," according to the statement. Per a 2017 report by the World Green Building Council, building and construction activities jointly account for the nearly 40 percent of energy-related CO2 emissions when upstream power generation is included.

Shrinking the carbon footprint of construction must, therefore, be a key plank of global net-zero climate strategy. Leko Labs bills itself as a “carbon negative” construction company — on account of having developed a novel wall and floor system based solely on wood and wood fiber, which it says is capable of replacing up to 75% of concrete and steel currently used in constructing a single building.

Its wood composite product is built to withstand high compression loads (30,000x its mass, the company says. If the wood is sourced from sustainable forestry, it should sequester substantially more carbon versus a traditional build made using concrete and steel that requires extremely energy-intensive processes to manufacture, according to the company's website.