We’ve raised $300 million in new capital, across our second early stage fund ($225M) and a new vehicle for select later stage opportunities ($75M), to continue to support our founders as they transform the real world around us: the foundational industries that provide us with the food we eat, the products we need, and the critical services – like transportation and delivery – that shape our lives now and for the future. We remain convinced that the next set of defining companies will come from founders who share our vision that the most critical tasks of these industries are ready to be transformed through software and automation.
With Fund II, Construct will continue to invest behind a high conviction and high concentration strategy backing ~20 companies, as we have in Fund I. We will continue to lead and co-lead Seed and Series A investments in Fund II.
We invest in sectors that are the underpinnings of the economy and drive over half of our country’s GDP. Our core areas have just come into focus for many. Production shortages are now a regular topic at dinner tables and supply chain management burgeoned as the most popular major at several universities this year. While we have always believed deeply in the criticality of these areas — we’ve both been operating and investing in them for over a decade — the speed at which they have become recognized as problematic dramatically accelerated during the pandemic. COVID brought shock and strain to a system with outdated infrastructure and decades-old technology. Suddenly, it became clear, for example, that models such as localized hub-and-spoke production and distribution must replace outdated chains spanning hemispheres. Yet severe shortages of workers made the ideal, new designs out of reach. And these industries have been underinvested in for decades. The solutions require a total reimagination. And bold, determined founders. And we’ve been fortunate to back 15 teams so far in Fund I who are doing just that.
So let us expand on a few areas that we’ve built deeper points of view around and a few examples from our portfolio:
Hadrian automates precision manufacturing for space and defense, building the world’s most efficient factories from the ground up to serve industries at the core of human advancement and exploration.
Copia introduces software processes to the industrial space by building developer operations tools purpose-built for this market. Copia is rearchitecting the industrial automation world – that runs our factories, warehouses, and physical infrastructure – by making it software driven.
Telegraph, a SaaS software company for the freight rail industry — the ultimate antiquated space — brings instant visibility and seamless logistics to the freight rail supply chain via its cloud-based operating system.
Buffalo Market has built a fully tech enabled food distribution business for large retailers — and the only new distributor of good-for-you brands in over 60 years. Their full service system optimizes where goods need to go (and when) and maximizes sell-through, increasing revenue for all stakeholders, including brands and retailers.
Veho, an e-commerce logistics company, transforms the shipping experience for brands. Veho’s local networks of gig-drivers deliver goods at a far higher quality and reliability than the traditional players such as UPS and Fedex can provide.
Pastel is building the first merchant centric ecommerce and delivery experience for local businesses.
Verve focuses on the workers powering our supply chain, offering them people-centered robotics that support their backs through proven, science based systems built at the Harvard Wyss Institute.
Chef automates food production, abstracting the most arduous, redundant physical processes away from human labor.
These Points-of-View represent a slice of these expansive foundational industries. There is so much more work to do and so many opportunities for building enduring software and tech-enabled companies.
We are thankful for the founders who we have partnered with so far and for our LPs who have supported us. If any of the above resonates with you, especially if you’re an entrepreneur, please reach out and say hello.
Dayna Grayson and Rachel Holt
Co-founders and Managing Partners, Construct Capital