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.
📧 Love this newsletter? Have it directly in your inbox - sign up here.
THE NUTS & BOLTS
Congrats to portfolio company Stable on the launch of Stable Market Intelligence! This powerful new solution provides visibility into local EV charger utilization trends, ability to benchmark an EV site's potential against national utilization rates, and data to build a compelling business case for site hosts. This in-depth local and national utilization information enables those installing EV charging infrastructure to deploy differentiated charging stations in any market. Learn more about Stable's new feature here.
Keep reading for the latest digital industrial news.
THE HEAVY HITTERS
🚚 Transactions and Transitions in Transport & Logistics
- A nice pop in the IPO market with Lineage, the largest temperature-controlled warehouse REIT in the world, closing up more than 3% in its Nasdaq debut late last month. The company raised $4.4B at an implied valuation of more than $18B, making this the largest IPO of the year.
- Logistics startup Stord is buying the e-commerce fulfillment services operations of Pitney Bowes (for an undisclosed amount). The deal comes as activist investor Hestia Capital Management has increased pressure on Pitney Bowes over the past few months. Shares of Pitney Bowes rose 12% in after hours trading following the transaction’s announcement.
- And another startup is jumping in to buy assets from an incumbent as European digital freight forwarder sennder acquired the European surface transportation business of global logistics company CH Robinson. Selling off the business unit is part of CH Robinson’s strategy to “get fit, fast and focused” in a freight market that continues to face challenges.
- Also last week, Korber Supply Chain Software announced it is acquiring TMS provider MercuryGate (for an undisclosed sum) in a move to strengthen Korber’s supply chain business as the company strives to be a leader in managing the movement of goods from procurement to the end customer.
- And FedEx is another major corporate making big changes in response to evolving market conditions as it combines its Ground and Express networks (which include more than 500,000 workers). Last fiscal year, Ground generated five times as much operating profit as Express as more and more packages are generated by ecommerce activity vs time sensitive business deliveries, and the consolidation aims to reduce redundancy and cut costs.
- While VC funding across all industries declined about 35% from 2022 to 2023, logistics start-ups were hit especially hard, with the sector accounting for 0.8% of total venture investments in 2023—down from roughly 3% in the five preceding years, according to a recent McKinsey report. The steep drop in logistics investment comes as e-commerce grows at a more modest pace post pandemic, trade volumes fall, and freight rates remain volatile. In 2021, venture funding for logistics startups reached nearly $26B; in 2023, that number was just shy of $3B (a 90% decline).
🏭 Activity Slows But Facilities Boom in Manufacturing
- US manufacturing is in a slump as high interest rates, rising operating costs, a strengthening U.S. dollar, and lower selling prices for commodities are tempering activity at factories across the country. Particularly hard hit are producers of long-lasting items (including cars, agriculture machinery, and large household appliances), with heavy equipment maker Deere & Co cutting more than 2,000 workers and recreational vehicle maker Polaris reporting a 49% drop in quarterly income as two examples (among many) of companies adjusting to weak demand. CAT Q2 earnings also foreshadowed lower dealer inventory levels ahead.
🚧 Deals, Dollars, and Data Centers in Construction
- Contech funding is up and down, with dollars invested down 1.6% during the first half of 2024 (compared to the same period last year) while deal count in the category is up, rising 18% year over year (indicating interest in construction innovation is still strong). North America came out on top, attracting about 55% of contech investment in Q2. This Cemex Ventures funding report is always a great pulse on the innovation economy in construction.
- Construction operations solutions provider Align Technologies announced it acquired FleetWatcher, a fleet and materials management software provider that serves the heavy civil construction space. The deal, for which terms were not disclosed, extends Align's product offerings and will allow customers to leverage a single platform to track tools, small equipment, fleet, and materials as well as oversee safety and compliance. PE firm The Riverside Company is a majority investor in Align and provided additional capital to fund the acquisition, and we believe PE platform rollups are just getting started within the construction market.
- Caterpillar reported Q2 earnings and improved profit margins that beat analyst expectations, however, revenue fell short of forecasts as changes in dealer inventories led to lower sales volumes. The company also reduced its full-year outlook, saying it now expects revenue to be “slightly lower” than 2023. CAT shares rose more than 3% following the report.
- Jumping in to meet the rapid rise in demand for data centers amid the AI boom is Panattoni Development, one of the largest industrial real-estate developers in the U.S. Panattoni will begin building and operating data centers across North America, with plans to develop a gigawatt of data-center capacity over the next five years (the equivalent of what it takes to power about 876,000 homes) on land it owns as well as new properties it will purchase.
⚡Enhancing Operations in Alternative Energy
- Chevron, the second-largest oil company in the US, is moving to Texas after more than 140 years based in California, a shift motivated by locating all HQ workers in one central hub (Houston) and finding a more friendly regulatory environment for the energy industry. In recent years, many major companies, including Hewlett Packard, Oracle, and most recently X and SpaceX, have left California to join us in Texas (welcome!) .
- Also contributing to higher costs in California are increasing energy bills as the state’s major utilities spend billions to upgrade infrastructure to minimize wildfire risk and add big solar and wind farms as they move away from fossil fuels. Across the country, utilities are passing along the cost of capital investments to customers, however, California has seen some of the sharpest increases nationwide, with electricity prices in the state almost doubling over the past 10 years (making them the highest among all 50 states with the exception of Hawaii).
- To address labor shortages and manage high costs hindering the installation of more solar power, companies are turning to robots to help with solar farm construction. AES Corporation, one of the country’s biggest renewable energy companies, recently introduced Maximo, a first-of-its-kind robot that can install heavy solar panels twice as fast as humans and for 50% of the cost. Already, AES has installed 10 megawatts of solar panels with robots (about enough to power 2,000 homes) and plans to use Maximo to install 100 megawatts by 2025.
FROM OUR TEAM
On Heavy Hitters: The Digital Industrial Podcast, Ty Findley speaks with MIT Professor of the Practice and manufacturing innovation expert Elisabeth Reynolds on her breadth of experience spanning academia to The White House advising on innovation strategies across manufacturing and supply chain, where we are today in US industrial innovation, and how technological innovation can support workers through cycles of tech transformation. Listen to the episode here!
FleetPulse is the newest addition to the Ironspring portfolio, and we recently released a "Why We Invested" piece detailing why modernizing trailer telematics will have a significant impact on the $800B US trucking industry and why we believe this is the right team to build a winning solution to address this major opportunity in transport and logistics. Read it here!
THE DEALS & M&A
Deals
- Applied Intuition, a Mountain View, Calif., autonomous driving simulation software startup, raised $200M is secondary sale led by Fidelity.
- InnerPlant, a Davis, Calif. crop monitoring tech company, raised $30M in Series B funding round led by Coutts Agro with Systemiq Capital, Deere & Company, and Bison Ventures also participating.
- Altana, a N.Y. supply chain monitoring company, raised $200M in Series C funding at a $1B valuation led by US Innovative Technology Fund with March Capital, Generation Investment Management, Salesforce Ventures, Friends and Family Capital, GV, Activate Capital, Floating Point, and OMERS Ventures also participating.
- Graphyte, a Dover, Del. carbon capture startup, raised $30M in Series A funding led by Prelude Ventures and Carbon Direct Capital with Breakthrough Energy Ventures and Overture also participating.
- Lineaje, a Saratoga, Calif., supply chain cybersecurity startup, raised $20M in Series A funding led by Prosperity7 Ventures, Neotribe Ventures, and Hitachi, with Tenable Ventures, Carahsoft Technology, Wipro Ventures, SecureOctane, and Alumni Ventures Group also participating.
- Applied Carbon, an SF automated biochar production tech startup, raised $21.5M in Series A funding led by TO VC with Congruent Ventures, Grantham Foundation, Microsoft Climate Innovation Fund, S2G Ventures, Overture.vc, Wireframe Ventures, Autodesk Foundation, Anglo American, Susquehanna Foundation, US Endowment for Forestry and Communities, TELUS Pollinator Fund for Good, and Elemental Excelerator also participating.
- Axle Energy, a U.K. energy grid connectivity startup, raised $9M (£7M) in seed funding led by Accel with Picus Capital, Eka Ventures, Amit Gudka, Sierra Peterson, Hanno Renner, and Nico Rosberg also participating.
- Sora Fuel, a Boston sustainable aviation fuel startup, raised $6M in seed funding led by The Engine Ventures with Wireframe Ventures and others also participating.
- H3X, a Denver-based electric motor maker, raised $20M in Series A funding. Infinite Capital led and was joined by Hanwha Asset Management, Cubit Capital, Origin Ventures, Industrious Ventures, Venn10 Capital, and insiders Lockheed Martin Ventures, Metaplanet, Liquid 2 Ventures, and TechNexus.
- Seeq, a Seattle provider of industrial analytics and monitoring, raised $50M in Series D funding. Sixth Street Growth led and was joined by insiders Insight Partners, Altira Group, Second Avenue Partners, and Saudi Aramco Energy Ventures.
- Branch Energy, a Houston energy retailer that leverages batteries, raised $10.8M in Series A funding co-led by Prelude Ventures and Zero Infinity Partners.
- Datch, an industrial AI solution for frontline manufacturing, energy, and utilities, raised $15M in Series A funding. Third Prime led and was joined by insiders Blackhorn, Blue Bear Capital, and Susquehanna Investment Group.
M&A, IPOs, & Fundraising
- American Industrial Partners acquired the grain & protein division of AGCO Corporation (NYSE: AGCO) which designs, manufactures, and globally markets grain storage and seed processing equipment.
- WeRide, a Chinese autonomous driving startup, filed for an IPO on Nasdaq.
- Acieta, backed by Angeles Equity Partners, acquired Capital Industries, a Shelbyville, Ind., industrial robotics manufacturer and integrator.
- MiddleGround acquired a majority stake in Helix, a U designer and manufacturer of high-performance electric motors and inverters.
- Sennder agreed to acquire the European ground transportation assets of C.H. Robinson, an Eden Prairie, Minn., logistics company, in an all-cash deal.
- Argonaut Private Equity acquired Layco Electric Innovations, a Tulsa, Okla., electrical equipment manufacturing and servicing company.
- Eurazeo is considering selling Elemica, a Wayne, Pa., supply-chain software company, in a deal valuing it at more than $1B.
- Rand Logistics acquired Andrie, a Muskegon, Mich., marine transporter of liquid bulk commodity goods, from Auxo Investment Partners.
- Quantum Capital agreed to buy Cogentrix Energy, a Charlotte, N.C.-based operator of natural gas power plants, from Carlyle for $3B.
- Aurora Capital Partners acquired GenServe, a provider of backup power solutions, from GenNx360 Capital Partners.
- Black Sesame, a Chinese AI chipmaker for autonomous driving, raised around $133M in its Hong Kong IPO (pricing at the low end of its range). It had raised nearly $700m in VC funding from backers like Xiaomi, SummitView Capital, Boyuan Capital, Hina Group, and Delta Capital.
- Enverus, an energy data SaaS owned by Hellman & Friedman and Genstar Capital, acquired BidOut, a Houston-based procurement software provider that had been seeded by Ascent Energy Ventures.
THE JOBS
There are 100+ open roles on our jobs site. Check these out!
