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THE NUTS & BOLTS
Our team is growing! We’re looking for a stellar experienced, mid-career investment professional to join our team as a Principal. This is a unique and exciting opportunity for an early stage investor to grow as a leader investing in and advising industrial tech companies and to help expand our capacity as a venture firm following the recent close of our $100M Fund II. Strong candidates will have five years of early stage investing experience in industrial B2B focused companies and a deep network across industrial innovation.
More information on the role and how to apply can be found here.
Keep reading for the latest digital industrial news.
THE HEAVY HITTERS
🏭 Big News Weeks in Manufacturing
- Last month, the US Supreme Court overturned the Chevron doctrine, meaning that federal courts will no longer have to defer to agency regulations for interpretation of ambiguous statutes. This opens the door for federal agencies to face more challenges to their rules and regulations and signals that agencies might publish fewer and more modest regulations going forward. Expect to see industrial businesses challenge the myriad of rules and regulations that have come out of regulatory agencies over many years in the months to come, potentially catalyzing new innovation and company creation.
- Also out of DC is new funding from the Department of Commerce’s Economic Development Administration (EDA) which has allocated $504M to develop 12 Tech Hubs across the country to scale up the production of critical technologies, create jobs in innovative industries, and strengthen U.S. economic competitiveness and national security. These sites in 12 states will help the US maintain “a competitive edge by advancing America’s leadership in commercializing critical emerging tech sectors,” said U.S. Secretary of Commerce Gina Raimondo.
- There is innovation across the manufacturing supply chain, including in how food is transported and distributed, with AI - and robots - holding great promise, says Ironspring Ventures portfolio company Plus One Robotics CEO Erik Nieves. In this $2.3T industry, AI can greatly reduce the time-to-shelf for several products, including food, and robots can automate packaging systems in warehouses with the help of machine learning and 3D computer vision (plus robots can hang out longer in a cold freezer to package temperature-controlled goods and also handle more manual labor than a human, even with a forklift).
- In 3D printing, Nano Dimension announced that it will buy additive manufacturing company Desktop Metal for a still to be determined price that will range between $135-$183M (at the high end, the deal marks more than a 27% premium over Desktop Metal’s closing price). This transaction comes after several cycles of layoffs at Desktop Metal and a failed merger between Stratasys and Desktop Metal in fall 2023.
🚧 Ups and Downs in Construction
- Data center construction is booming as more and more companies (across diverse sectors spanning cloud services to finance to healthcare) increasingly rely on these facilities as core digital infrastructure. Despite market headwinds of high interest rates, ongoing inflation, and supply chain bottlenecks impacting the construction industry broadly, data center projects continue to stay strong, with many notable projects in the works including a $1B Microsoft data center in Indiana and an $800M Meta data center in Alabama.
- Down, however, are lumber prices, which have dropped significantly in recent months, with lumber futures falling 27% since mid-March to $452.50 per thousand board feet, and framing-lumber composite prices hitting their lowest point since May 2020 at $366. The declines come as the residential construction and home-improvement markets confront high borrowing costs and sluggish demand. Capacity is also down, as North American sawmill production fell by 2% in 2023, as several mills have closed or curtailed operations until prices rebound. Aligned to that, we have seen the volatility of this market spawn many venture-backed innovators specifically focused on lumber efficiencies.
- And in M&A activity, AI powered construction project delivery platform Crews by Core was acquired by WakeCap, a Saudi Arabia based IOT company specializing in construction project management, for an undisclosed amount. The transaction will create a comprehensive SaaS and IoT solution for managing construction mega projects.
🚚 Changing Dynamics in Transport & Logistics
- Last week, the Biden administration announced it would impose a 25% tax on foreign-made steel imports routed through Mexico, a move aimed at curbing imports of metals from China and other countries that ship products through Mexico to avoid tariffs (with China being a clear target here as it is the largest producer of steel in the world). All steel and aluminum products imported from Mexico will be subject to the new tariffs unless the steel is documented to have been melted and poured in Mexico, the U.S. or Canada. In 2023, the U.S. imported almost $3B worth of steel, aluminum and other metals from Mexico, about half of the total amount it imports annually. Clearly there is some connectivity behind this and the recent LATAM port activity we’ve covered previously (Mexico and Peru) around US actions against workarounds from China.
- The US government has been active in spurring infrastructure development, with the U.S. Department of Transportation announcing $1.8B in RAISE grants will be awarded to 148 infrastructure projects across all 50 states, equally divided between urban and rural areas. This year's program saw nearly $13B in requests, with representative projects including $25M for a grade separation in California and $24M for electric buses in rural Maine.
- New infrastructure may be on the way, however, the freight industry is still looking to regain its command of the roads. Freight continues to struggle, with the latest woes coming from mega truck brokerage C.H. Robinson, which announced it laid off more than 50% of its US sales team. This comes as the company has cut U.S. sales jobs by around 89% over the past six years as part of a strategy to rely more on technology, however, despite investing $1B in tech solutions since 2019, the company has been mired in technical challenges and shed more than 2,000 workers over the past two years.
⚡Shifting Landscape in Alternative Energy
- In southern California, the ports of LA and Long Beach will invest a combined $25M to develop charging infrastructure for electric-powered heavy-duty trucks serving the harbor and warehouses in the region. This is a major move to work toward the state mandate requiring zero emission fleets by 2035.
- Having burned through $100M raised from investors over the past four years, hydrogen powered aircraft maker Universal Hydrogen said it is shutting down after failing to raise additional capital needed to develop its technology. The company’s CEO said he hopes their “efforts will live on as part of a future entity.”
- The recent Supreme Court decisions may also impact the energy sector, which now faces uncertainty after the court rulings weakened federal agency authority and extended the statute of limitations for filing suits for existing regulations. While federal agencies with less power may fuel innovation in some sectors, in energy, a less reliable regulatory environment may hinder investment in US energy projects, with some investors potentially waiting to commit capital until judicial reviews are completed. Regulated entities’ may also forgo early compliance with anticipated or pending regulations in this new era of limited federal agency authority.
FROM OUR TEAM
On Heavy Hitters: The Digital Industrial Podcast, Ty Findley speaks with Bain Capital Ventures Principal Zeeza Cole on BCV's focus on industrial technology and the potential her team sees in our current "industrial renaissance," how the firm's industrials team operates within BCV and taps into the broader Bain network, and her take on what's hot and hype in industrial tech today. Listen to the episode here!
THE DEALS AND M&A
Deals
- Clearstory, a Walnut Creek, Calif., change order management platform for construction, raised $16M in Series B funding. Prudence led and was joined by Industry Ventures, Jackson Square Ventures, Building Ventures, GS Futures, and Cloud Apps Capital Partners.
- Phaidra, a Seattle virtual plant operator, raised $12M led by Index Ventures.
- Feon Energy, a Woburn, Mass.-based battery electrolyte developer, raised $6.1M in seed funding. Fine Structure Ventures led and was joined by Eight Roads, Foothill Ventures, MassVentures, EPS Ventures, and Valkyrie Fund.
- Aether Fuels, Chicago sustainable fuels developer, raised a $34M Series A led by AP Ventures.
- Scaler, a provider of ESG data analytics software for the real estate sector, raised $10M from Plural.
- Skild AI, a Pittsburgh AI robotics company, raised $300M in Series A funding at a $1.5B valuation. Lightspeed Venture Partners, Coatue, SoftBank Group, and Jeff Bezos co-led and were joined by Felicis Ventures, Sequoia Capital, Menlo Ventures, General Catalyst, CRV, Amazon, SV Angel, and Carnegie Mellon University.
- Buildots, an Israeli AI construction software company, raised $15. Intel Capital led, and was joined by OG Tech Partners.
M&A, IPOs, & Fundraising
- Google acquired a stake in New Green Power, a Taiwanese renewable energy firm owned by BlackRock.
- Novo Holdings, the largest shareholder of Ozempic maker Novo Nordisk, launched a growth equity strategy focused on climate change.
- Seaya, a Madrid-based VC firm, raised €300M for a climate-tech fund.
- The Westly Group raised $100M for a seed-stage fund focused on climate and energy startups.
- DOF Group, a listed Norwegian supply shipping company, agreed to buy Maersk Supply Service for $1.11B in cash and stock from a unit of A.P. Moller Holding.
- Nano Dimension (Nasdaq: NNDM) agreed to buy additive manufacturing company Desktop Metal (NYSE: DM) for upwards of $183M, or $5.50 per share.
- WakeCap, a Saudi IoT platform for construction, acquired Crews by Core, a Palo Alto-based field scheduling platform for the construction industry. CbC had raised around $12M from firms like NFX, Capital Factory, Streamlined Ventures, and Hometeam Ventures.
- Honeywell (NYSE: HON) agreed to buy the LNG process tech and equipment unit of Air Products (NYSE: ADP) for $1.81B in cash.
- Benchmark raised $425M for its latest flagship VC fund.
- Eversource Energy (NYSE: ES) sold its 50% stake in the 924 MW Sunrise Wind offshore wind project in New York to Denmark's Ørsted, grossing $230M.
THE JOBS
There are 110+ open roles on our jobs site. Check these out!
