NUTS & BOLTS 10.21.24

Hello from Ironspring Ventures ! Thanks for checking out our biweekly newsletter where we've carefully curated the latest and greatest from the digital industrial ecosystem.

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THE NUTS AND BOLTS

??Congrats to Document Crunch ?on raising its Series B!?We’re proud to continue to back Co-Founder and CEO Josh Levy and all of the crunchers as they expand the capabilities of their AI powered platform and grow the team to further their mission of ensuring that construction companies stay compliant during project execution. Ironspring Ventures participated in the round alongside lead investor?Titanium Ventures ?and strategic partners?Nemetschek Group ,?ANDRES Construction Services , and Satterfield & Pontikes Construction , in addition to existing investors?Navitas Capital , Zacua Ventures , and?Fifth Wall .

?Document Crunch is also hiring for several exciting roles across sales, marketing, and engineering. Check these out here !

And congratulations to Stable Auto , which announced a strategic agreement with Blink , a leading global manufacturer, owner, operator, and provider of electric vehicle charging equipment and services. After a successful pilot where Stable helped deliver a 34% improvement in efficiency and net revenue with its price recommendations and listing management, Stable’s data-driven solutions will be rolled out to 4,500 EV chargers across Blink’s network. The formal collaboration will aim to drive utilization growth, efficiency, and profitability on Blink-owned chargers across the US.

Keep reading for the latest digital industrial news.

GET SMARTER

A monthly feature on what's top of mind at Ironspring Ventures

Power Struggle at the Ports and How Capital Markets Are Anchored to Them

While the recent portworker strike lasted only three days until the ILA was able to secure a satisfactory tentative agreement around wages, complex issues remain when it comes to the future of port workers, how their ports operate, and who owns these critical assets. In a year when supply chains have already been hard hit by conflict in the Red Sea, drought affecting the Panama Canal, and the Baltimore bridge collapse in addition to the ILA strike, a diverse set of stakeholders is eager for smooth sailing ahead, however, all should be prepared for change, whether related to labor issues, new technology, or port ownership and management. While plenty has been covered on the strike and its outcome that we won’t rehash here, there is still much to be discussed under the surface aligned to our role at Ironspring Ventures within the capital markets.??

Like many legacy industries, the shipping industry is evolving to keep pace with worker demands, emerging technology, and a financial market that is increasingly taking notice of the significant (and potentially lucrative) opportunity in investing in the future of heavy industrial industries. In addition to the rise of venture capital interest in the transportation and logistics space (VC dollars into logistics spiked to an unprecedented nearly $26B in 2021and interest remains strong despite a recent pullback coming out of the pandemic ), private equity investors have jumped aboard as well, including in ports specifically.?

Ports are attractive to PE investors given their stability, with long-term port operating agreements and a consistent flow of global trade that translate into steady returns . PE deals in this space date back to 2007 when Dubai’s port operator DP World sold several container ports to a subsidiary of insurer AIG (which renamed the terminal assets Ports America Inc) before spinning it out and selling to Oaktree Capital in 2014. A few years later, CPP, Canada’s Pension Plan Investment Board, became the 100% owner of Ports America in 2021 , acquiring the assets from Oaktree. Ports America is currently the largest terminal operator in North America, with diversified operations across the country, including 70 locations in 33 ports on each of the United States’ three coasts.?

Additional players to note include CalPERS, the nation’s largest public pension fund, which held several port assets among its investments going back to 2017. In 2019, Blackstone’s infrastructure fund invested in Carrix , the parent company of SSA Marine and its affiliates, with combined operations at more than 250 port and rail locations worldwide, including the Port of Long Beach (the third busiest US port after New York/New Jersey and LA ). Another major marine terminal owner and operator is Maher, which is owned by Australian investment firm Macquarie. ?

What does all this mean as the ILA works toward finalizing its new contract by mid-January? The port operators, many backed by private equity, will be closely watching the numbers and how embracing automation will impact the bottom line. Both sides have proved to be shrewd negotiators, and we’ll be watching for signs of PE’s growing influence in port operations as the agreement takes shape.?

THE HEAVY HITTERS

???More and Less in Manufacturing?

• Across the US, manufacturers are pulling back on buying automation equipment , with orders for factory robots in North America declining by nearly one-third in 2023 from 2022’s record volume, according to the Association for Advancing Automation. Orders have continued their downward trend over the first six months of this year as well.
• As labor challenges and high production demands have resolved post pandemic, robot makers say customers have become more selective about their investments , and high interest rates and lower production volumes mean that it is taking companies longer to recoup the money they do spend on robots.
• An exception is Amazon, which at its “Delivering the Future” event earlier this month, announced it will pursue a new model for some of its warehouses , taking “a more ground-up greenfield approach” to operating facilities with robotics and AI. While specific details for how these new warehouses will work are yet to come, Amazon said that these centers will include 10 times as many robots as standard fulfillment centers.?
• Shreveport, Louisiana will be home to the first of these facilities, which will be a 3-million-square-foot warehouse that will employ 2,500 people alongside the advanced robots.????
• But also resetting is the US warehousing sector, which is coming back to earth after skyrocketing during the pandemic, with both warehouse construction and warehouse jobs contracting in recent months. In Q3, the amount of industrial real estate under construction dropped to 309 million square feet (down 43% from the previous year, the steepest drop since 2008), and in September, warehouse operators lost a seasonally adjusted 11,000 jobs, according to preliminary Bureau of Labor Statistics data. Overall, payrolls in the storage and distribution sector have fallen by nearly 172,000 jobs from a pandemic-era high of 1.9 million jobs in May 2022.?
• Going into the holiday season, the vacancy rate for industrial real estate reached 6.4% in the third quarter , the highest quarterly level since the end of 2014.?
• In this environment of lower demand, developers and owners of industrial real estate are increasingly shifting their attention to building data centers to support the AI boom.?

?? Leading the Way?in Construction

• Built world innovation group BuiltWorlds released its Top 50 Venture Investors list which highlights the breadth of investors focused on innovating in the built world and calls attention to the continued acceleration of financing to back pioneering tech in the built environment. Ironspring Ventures was honored to be included here, alongside an impressive group of firms dedicated to furthering progress through technology in the built world.??
• Swinerton, a major US contractor, recently broke ground on a new mixed-use mass timber office building in Austin which will serve as a showcase for potential Swinerton clients interested in mass timber (in addition to housing the company’s workers). The company estimates that the timber used on the project will store 500 metric tons of carbon dioxide, which is the equivalent of removing 301 cars from the road for a year.?
• As mentioned above around ports, private equity investors are increasingly active in the skilled trades, including across HVAC,? plumbing, and electrical . PE firms have purchased nearly 800 HVAC, plumbing ,and electrical companies since 2022, according to PitchBook, and these are just the biggest deals—plenty of smaller-scale purchases aren’t tracked and sellers are often hesitant to share details on their PE payouts.?
• While selling to PE firms takes some of these businesses out of the hands of family operators, the wave of investment that is giving many “mom-and-pop” shops the chance to make life changing amounts of money could make it more attractive (and potentially lucrative) to work in these trades.

?? Technology Drives Transition in Transport & Logistics

• Canadian logistics network platform provider Descartes announced that it is acquiring Sellercloud , which offers omnichannel e-commerce solutions, for about $130M. Descartes says adding Sellercloud to their service will expand their “product suite with advanced inventory and order management capabilities,“ enabling the company to deliver tools “to manage the full lifecycle of domestic and cross-border ecommerce shipments.”??
• Descartes has been on a buying spree in recent years, with this deal marking its 31st acquisition since 2016.?
• With the wage agreement in place, ILA dockworkers now turn to negotiations around automation , which they fear will displace workers. Shipping executives, however, argue that U.S. ports lag behind facilities in Europe and Asia when it comes to automation, and these international ports consistently rank higher than those in our country when it comes to port productivity. They also point to the US’ fully automated terminal (at Long Beach) which worked ships and managed container stacks better than its peers during the pandemic, serving as a model for what is possible with automation.??
• Across the country, shipping companies are looking to add autonomous cranes and vehicles to terminals large enough to accommodate them , and at terminals where it is challenging for robots to operate due to size or layout, port operators are exploring how to leverage cameras, artificial intelligence, and other technologies to boost efficiency.??
• To build up its domestic supply chain, Mexico, like many other countries, says it wants to reduce its dependence on imports from China and is asking some of the world’s biggest manufacturers and tech firms operating in the country to identify Chinese products and parts that could be made in Mexico instead. China’s exports to Mexico have risen steadily in recent years (reaching 20% of total imports, according to Mexican government data), and about 70% of Mexico’s imports from Asia, primarily Chinese goods and components, are brought in by about 50 foreign companies operating in Mexico (half of which are U.S. firms in the automotive, semiconductor, and aerospace industries).?
• The new Sheinbaum administration hopes these efforts will support favorable discussions around the U.S.-Mexico-Canada Agreement (USMCA), which is subject to review in 2026 . Less reliance on China for goods made in Mexico could boost supply chain reliance and trade routes through North America.?
• US-Mexico cross-border trade is up yet again , coming in at $73.8B in August, rising 4% from the same month in 2023, and marking the eighth consecutive month (and 18th of the past 19 months) that Mexico has been the number one trade partner with the U.S. Through the first eight months of the year, trade between the U.S. and Mexico totaled $560B (while trade with Canada came in at $509B and China at $373B, for comparison)?
• The port of Laredo, TX popped to the top again as the top trade gateway in August among the nation’s 450 airports, seaports, and border crossings (after briefly falling behind the Port of Los Angeles in July), with trade totaling $30.7B in Laredo during the month.?

?Powering Up in Alternative Energy

• Renewable power is on the rise, currently on pace to produce close to half of the electricity used globally by the end of this decade , when more than 5,500 gigawatts of renewable capacity will be available (the total current capacity of China, India, the U.S., and the EU combined), according to a new report from the International Energy Association.???
• Solar power will account for most of the growth as it continues to outperform projections and become more ubiquitous in the years ahead as manufacturing accelerates. India and the U.S. are expected to triple their solar manufacturing capacity by 2030. That said, recent extreme hail storms have?kicked up a valid discussion on solar panel resilience?as outlined by a recent Wired research effort .?
• Nuclear power also has momentum amid the data center bonanza , with Google signing an agreement to purchase nuclear energy from multiple small modular reactors (SMRs) from Kairos Power. The first SMR is scheduled to be deployed by 2030, reaching up to 500MW across 6-7 reactors by 2035.?
• The Google deal comes after Microsoft, Amazon, and Oracle have all signed recent agreements to develop nuclear power to support their operations.?
• EVs have had a rough ride lately as demand has slipped, but BYD is one automaker racing ahead after posting its fourth straight month of record global sales (with nearly 420K vehicles sold) and displacing Volkswagen as the number one carmaker (by sales) in China. BYD’s recent success is fueled by its efforts to build its own batteries and chips, improve fuel efficiency, and develop plug-in hybrid technology that enable it to sell its low cost Qin L plug-in hybrid for about $14K, setting it apart as a low cost model that can drive about 1,300 miles with one charge and a full tank.??
• BYD is riding high in China, however, backlash against Chinese cars across the globe is hampering its international expansion. The Biden administration imposed a 100% tariff on Chinese EVs (while the Commerce Department has proposed banning Chinese components inside connected vehicles), and earlier this month, EU member states voted to impose tariffs of up to 45% on EVs made in China.?

FROM OUR TEAM

Last week, we released The Blueprint #5 – Data Centers Unplugged: Physical Assets for the Digital Economy , the latest edition in our thought leadership series that shares what we’re thinking about, observing, and predicting across the digital industrial innovation ecosystem. This piece covers the data center supply chain lifecycle and the infrastructure required – digital and physical – to enable the data center expansion required to support the burgeoning AI ecosystem.?Check out this in depth primer on what it takes to design, build, and operate a data center – and the opportunities Ironspring Ventures?sees to innovate and invest across the data center development value chain.

ICYMI: Read our previously published edition in this series :

• The Blueprint #1 - The Power of Industrial Vertical Labor Solutions
• The Blueprint #2 - Nearshoring: A Shift in LATAM Transport & Logistics
• ?The Blueprint #3 - Designing, Building, Transporting, and Operating a More Sustainable Future
• ?The Blueprint #4 - The Rise of Building Material Distributors

And earlier this month, Co-Founder and General Partner Ty Findley participated in Forge, an exclusive annual summit hosted by Stifel and G2 Venture Partners , which brought together a highly curated group of founders, investors, LPs, and corporate buyers focused on developing technologies for application in the physical world. Portfolio company founders Juan Aparicio of Reshape Automation and Erik Nieves of Plus One Robotics also attended the high impact event for the industrial innovation and deep tech community.

THE DEALS

Deals

• Valdera , an SF-based sourcing platform for chemicals and raw materials, raised $15M?in Series A funding led by Index Ventures.

• Paren , an SF-based electric mobility data platform, raised $3M?in first-round funding. Base10 Partners?led?and was joined by Founders Network Fund and Luc Vincent.

• Airloom Energy , a Laramie, Wyo., wind energy startup, raised $13.8M. Lowercarbon Capital?led?and was joined by Breakthrough Energy Ventures, the state of Wyoming, the U.S. Defense Department, WYVC, Crosscut Ventures, WovenEarth Ventures, Adiuvans, and the Kutnick Family Office.

• Windmill , a New York-based air conditioning equipment startup, raised $5M?in Series A funding co-led by Yeti Capital?and Pentland Ventures.

• Fortius Metals , a Lafayette, Colo., metals additive manufacturer, raised $2M?from Finindus.

• Form Energy , a Somerville, Mass., developer of long-duration batteries, raised $405M?in Series F funding. T. Rowe Price led?and was joined by GE Vernova and insiders TPG Rise Climate, Breakthrough Energy Ventures, Capricorn, Coatue, Energy Impact Partners, The Engine Ventures, NGP, Temasek, GIC, Prelude Ventures, Claure Group, Gigascale Capital, Blindspot Ventures, and VamosVentures.

• Document Crunch , an Atlanta-based document compliance platform for construction, raised $21.5M?in Series B funding. Titanium Ventures?led?and was joined by Nemetschek Group, Andres Construction, Satterfield & Pontikes and insiders Navitas Capital, Zacua Ventures, Fifth Wall, and Ironspring Ventures.

• ?Molg , a Chantilly, Va., circular manufacturing startup, raised $5.5M?in seed funding. Closed Loop Partners?led?and was joined by Amazon's Climate Pledge Fund, ABB Robotics & Automation Ventures, Overture, Elemental Impact, and Techstars.?

• Drawer AI , an Austin, Texas-based estimating system for electrical contractors, raised $5M?in seed funding. Brick & Mortar Ventures led?and was joined by Base10 Partners.

• In Bold Print , a Chicago-based carbon management platform for businesses, raised $1M?in pre-seed funding led by VC 414.

• ?Path Robotics , a Columbus, Ohio-based developer of autonomous robotic welding systems, raised $100M. Matter Venture Partners and Drive Capital?co-led?and were joined by Yamaha Ventures, Taiwania Capital, MediaTek, Catapult Ventures, Gaingels, Addition, Tiger Global, and Basis Set.

• Koloma , a Denver-based green hydrogen startup, raised $50M?in Series B extension funding (structured as a SAFE note) from backers like Japan's Osaka Gas and Mitsubishi Heavy Industries.

• REsurety , a Boston-based?provider of data analytics for clean energy companies, raised $32M?in Series C funding led by S2G Ventures.

• Equilibrium Energy , a Boston operator of grid-connected battery systems,?raised $39M?in Series B funding. DCVC?led?and was joined by Breakthrough Energy Ventures and Valo Ventures.

• King Energy , a Durango, Colo., installer of solar panels on commercial buildings, raised $10M?in seed funding led by ArcTern Ventures.

• Treehouse , an installation platform for electrification?projects, raised $16.6M?in Series A funding from Flourish Ventures, Eaton, Veriten, MassMutual Ventures, inVest Ventures, CarMax, Montage Ventures, Acrew Capital, Holman, Virta Ventures, and Invest Detroit.

M&A, IPOs, & Fundraising

• Helix Energy Solutions (NYSE: HLX), a Houston offshore drilling services firm valued at around $1.8B, is exploring a possible sale, per Bloomberg.?

• Power Grid Components, a Bessemer, Ala., portfolio company of Blackstone, acquired Vizimax, a Canadian?provider of energy measurement and control automation solutions.

• Equinor?(Oslo: EQNR) acquired a $2.5B?stake in listed Danish wind energy firm Orsted.

• STG Logistics, a Bensenville, Ill., transloading and containerized freight services firm, raised $300M?in equity and debt funding. Equity backers were insiders Wind Point Partners, Duration Capital Partners, and Oaktree Capital Management.?

• Honeywell?(Nasdaq: HON) will spin off its advanced materials into an independent, publicly traded company.?

• Woodside Energy?(ASX: WDS) acquired Houston-based LNG developer Tellurian?(ASX: TELL) for $1.2B?(including debt).?

• Activate Capital?is raising $500M for its third climate-focused fund.

• DC Blox, a?provider of interconnected data centers, raised new equity funding co-led by Post Road Group and Bain Capital Credit.

• GXO Logistics?(NYSE: GXO), a supply chain services firm that spun out of XPO?(NYSE: XPO) in 2021, is exploring a sale, per Bloomberg.

• Interlagos, a VC firm led by former SpaceX execs, is targeting $550M?for its debut fund.

• DataBank, a Dallas-based data center operator, raised $2B?in equity led by a $1.5B?commitment from pension system AustralianSuper.

• Syntax Systems, a Montreal-based portfolio company of Novacap, acquired Argon Supply Chain Solutions, a warehouse management firm.

THE JOBS

AIM - Infrastructure Engineer , Full Stack Software Engineer ?(plus several other roles)

Cargado?-?Marketing Lead , Carrier Partnerships Manager

GoodShip - Customer Success Manager

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