NUTS & BOLTS 06.17.24

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THE NUTS & BOLTS

Congrats to GoodShip, OneRail, and Plus One Robotics on receiving SupplyTech Breakthrough Awards! These honors recognize the world's best companies, products, and services, in the supply chain technology and logistics industry.?

• Procurement Solution of the Year: GoodShip
• Last Mile Company of the Year: OneRail
• Overall Robotics Company of the Year: Plus One Robotics

Keep reading for the latest digital industrial news.

THE HEAVY HITTERS

?? Competition in Manufacturing?

• Spring has been slow for U.S. manufacturing, with output declining for a second straight month in May as new goods orders fell by the most in nearly two years. Construction projects also dropped month over month, and US GDP grew at only 1.3% in Q1, painting the picture of a sluggish economy. Experts say higher than expected rates this year have caused businesses to hold back investment and hesitate to increase inventory levels.
• Also slow to launch is chip production in this country, as despite the CHIPS Act committing almost $53B to help US companies ramp up, headwinds remain as other countries (including South Korea, Japan, and Taiwan, in addition to China) move fast to build up their own chip industries, complexity remains around funding allotment, and even with the new funding, it is still incredibly expensive to manufacture chips.??
• Meanwhile, China is hard at work to become self-sufficient domestically when it comes to chip production by increasing the amount of locally produced semiconductor-production equipment it uses and moving away from American-made manufacturing tools. Such a move helps China fortify its operations in the face of new US tariffs.?
• China is also making moves to increase ties with Latin America, building a $3.5B ?megaport in Peru that could challenge?U.S. influence in the region. The new port will speed trade between Asia and South America and could open new markets for?Chinese EVs and other exports.

?? More Projects, Workers, and Deals in Construction

• Massive M&A news with electrical distributors?AD and IMARK Electrical announcing?their intent to merge, bringing together two member-owned groups consisting of 725 independently owned independent electrical distributors in the U.S. The new entity will be a division within AD called The Independent Electrical Supply Division.??
• Another notable deal recently is construction software company Nemetschek announcing it would acquire GoCanvas, a provider of field worker collaboration tools. The transaction brings growth opportunities and technology synergies to Nemetschek and strengthens its position in the US market, while Nemetschek will provide GoCanvas access to expanding across Europe and Asia.
• Construction projects are up, with nonresidential construction planning increasing nearly 3% in May. The commercial sector led the way, with office, industrial and data center projects rising close to 6% month over month (and making up for lagging activity in education, life sciences, and health care). Nineteen projects valued at $100M or more entered planning during May, and forecasters predict a steady stream of projects breaking ground through mid-2025.?
• There may be more workers to work on these projects, with construction jobs now cool on Tik Tok. The tags #electrician, #constructionworker,?and #mechanic were included in about 75% more posts in the first four months of this year than over the same period in 2023. Along with a 16% increase last year in students enrolled in vocational community colleges, the construction industry may be primed for a much needed boost in talent.??
• Also expect to hear more about resilience and risk management across construction, as extreme weather, sea level rise, and hotter temperatures take a toll on infrastructure. Last year, the U.S. experienced 28 separate billion-dollar weather disasters, the highest number on record and part of a steady upward trend. With the average cost per mile of a two-lane road now about $10M, as one example, contractors and engineers need to prepare to build roads and buildings that can withstand harsh conditions more often.?

?? IPOs, ICEs, and Cost Controls Get Attention in Transport & Logistics

• Though the US added nearly 300,000 jobs last month, the freight industry continues to struggle, with 5,400 jobs lost in May, the largest single monthly decline in the sector since August 2023 (the industry is now down nearly 30,0000 jobs over the past 12 months). “One of the most prolonged downturns in the U.S. domestic freight market in recent memory” persists as an oversupply of drivers, who entered the industry during the pandemic fueled boom, compete for loads and push down prices.?
• EVs may make the most news these days, but ICE vehicles are also ripe for innovation, and Toyota, Mazda, and Subaru are teaming up to create “next gen” engines that provide better efficiency and performance as well as compatibility with alternative fuels. The new ICEs will also be smaller, making it possible to design more aerodynamic vehicles with improved fuel economy.??
• With pandemic era pressures subsiding, companies are now shifting from a focus on resilience to cost control when designing supply chains, finds a recent global study from Deloitte. To achieve profitable growth, companies are moving supply chains closer to home, leveraging government funding, and diversifying supply chains strategies.?

?? Where the Money (and Electricity) is Going in Alternative Energy

• This year, total energy investment globally is expected to exceed $3T, with around two-thirds of this going toward renewables, electric vehicles, nuclear power, storage, and grids (said differently, twice the amount going into fossil fuels). Lower costs, better functioning supply chains, widespread emissions goals, and energy security requirements are spurring increased capital into clean energy, even amidst high interest rates that make it more expensive to finance clean energy projects.?
• Going deeper on what is attracting capital, solar power is hot, wind power is not. While the US has seen solar panel installations rise to record highs, the country is adding less wind power capacity now than in 2022 (when the Inflation Reduction Act was passed, which implemented significant tax breaks aimed at boosting renewable energy projects). Wind is lagging due to supply chain challenges, lack of transmission lines, long permitting processes, and increasing community opposition, and experts predict that the US’ energy transition goals will not be met if wind cannot supply about one-third (or more) of the nation’s electricity, up from about 10% today.??
• And what if your EV battery could decrease utility bills, lower lease payments, or provide free parking? Ford, GM, BMW and other carmakers are exploring how EV car batteries could be used to store excess renewable energy to help utilities manage variations in supply and demand for power. In exchange, EV owners would receive benefits, which could sweeten the deal to purchase an EV. With as many as 30M EVs on US roads by 2030 (up from about 3M now), these cars could store as much power as a day’s output from dozens of nuclear plants.?

FROM OUR TEAM

At the ENR Future Tech conference in San Diego earlier this month, Ironspring Ventures Co-Founder & General Partner Adam Bridgman co-hosted a contech innovation dinner with Zacua Ventures and Dysruptek. Thanks to the founders and investors who joined to further collaboration and community in contech!

THE DEALS AND?M&A

Deals

• WindBorne Systems, a Palo Alto, Calif.-based smart weather balloon maker, raised $15M?led by Khosla Ventures.
• Plural, a provider of on-chain investment solutions for renewable energy developers, raised $2.3M?co-led by Necessary Ventures?and Compound.
• Xcimer, a Redwood City, Calif., nuclear fusion startup, raised $100M?in Series A funding from Breakthrough Energy Ventures, Lowercarbon Capital, Prelude Ventures, Emerson Collective, Gigascale Capital, and Starlight Ventures.
• Understory, a Madison Wis., provider of climate risk-related insurance, raised $15M?in Series A funding co-led by True Ventures?and Prelude Ventures.
• Field Materials, a procurement platform for contractors, raised $3.5M?in seed extension funding from DivcoWest Ventures, Navitas Capital, Zelda Ventures, Flyer One Ventures, Blumberg Capital, s16vc, and Zacua Ventures.
• Forge, a provider of procurement management for hardware startups, raised $2.1M?in seed funding led by?Gradient Ventures.
• SiTration, a Boston materials recovery company serving the mining and metals industries, raised $11.8M?in seed funding. 2150?led?and was joined by BHP Ventures, Extantia, and Orion Industrial Ventures.
• Qargo, a London trucking industry decarbonization startup, raised ï¿¡11M?in Series A funding led by Balderton Capital.
• Space Pioneer, a Chinese developer of reusable rockets, raised around $207M?from Wuxi Chuangfa, CCTV Fund, CITIC, Hefei Ruicheng, SDIC Taikang, Bohua Capital Management, Guoyu Gaohua, and Deyue Investment.
• Mistral AI, a French AI company, has closed its €468M?equity funding round at a €5.8B?valuation led by DST Global and?General Catalyst, per Sifted.
• Whizz, an NYC e-bike subscription service for last-mile delivery, raised $12M?in Series A funding LETA Capital?led?and was joined by Flashpoint.
• Tenderd, a Danish provider of heavy equipment management software, raised $30M?in Series A funding. A.P. Moller Holding?led?and was joined by Quadri Ventures, Saurya Prakash, Wa'ed Ventures, Nakhla Ventures, Soma Capital, and Liquid 2 Ventures.
• ElectronX, a Chicago energy exchange focused on grid transition, raised $15M?in seed funding led by Innovation Endeavors.
• Ship Angel, a workflow platform for cargo owners, raised $5M?co-led by Glasswing Ventures?and Newark Venture Partners.
• Swift Solar, a San Carlos, Calif., solar manufacturer, raised $27M?in Series A funding co-led by Eni?and Fontinalis Partners.

M&A, IPOs, & Fundraising

• LandBridge, a Delaware Basin-focused oil property acquirer formed by Five Point Energy, filed for a $100M?IPO.?
• Sheer Logistics, a Chesterfield, Mo., portfolio company of Woodlawn Partners, acquired CargoBarn, an Atlanta provider of third-party logistics.
• Aymium, a Gwinn, Minn., biocarbon producer, raised $210M?in debt and equity funding. The equity came from Hokuriku Electric Power Co. and Nippon Steel Trading.
• Noble, an offshore oil-rig contractor, agreed to buy smaller rival Diamond Offshore Drilling?(NYSE: DO) for $1.6B?in cash and stock.
• Hyundai?is planning to file for an IPO of its Indian unit this month, per Bloomberg.
• Collaborative Fund, an NYC venture firm focused on climate, health, and food, raised $125M?for its sixth fund.

THE JOBS

Cargado?-?Software Engineer

Harbinger - Equipment?Engineer, Head of Production Business Processes

OneRail - Product Designer

There are 110+?open roles?on our jobs site. Check these out!