Contech backer launches second, $100M fund

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Dive Brief:

  • Austin, Texas-based investment firm Ironspring Ventures, which targets industrial-focused startups including construction technology companies, unveiled its $100 million Fund II late last month
  • The venture capital business, which was founded in 2020, announced the new pool of cash on the heels of its $61 million Fund I from 2020, which it used to invest in 16 businesses across its portfolio, per the release. It plans to invest in 20 startups with Fund II, at a rate of four or five companies per year, Stephanie Volk, Ironspring’s head of platform, confirmed to Construction Dive. Volk said the firm’s usual check size to startups is between $2 million to $4 million.
  • Ironspring created Fund II because of what it called “exorbitant material prices, skilled labor shortages, infrastructure stagnation, supply chain stalls and clunky legacy operating systems,” per the news release. The company claims it is uniquely positioned to understand issues facing the industry, and to evaluate startups based on how they can confront those problems.

Dive Insight:

The investment firm puts money toward companies across the design and build lifecycle, Adam Bridgman, Ironspring’s co-founder, told Construction Dive in an email. The VC is particularly focused on automation solutions for commercial, industrial and infrastructure construction.

“These are complex, fragmented supply chains that challenge systems and data interoperability and effective multi-player collaboration,” Bridgman wrote. “When you add the current skilled labor crisis to this environment, it creates a sense of urgency to help builders do more with less via technology.”

With the launch of the second fund, Ironspring will inject capital into four startups across the manufacturing and supply chain logistics spaces, per the announcement. They are:

  • Goodship, a Nashville, Tennessee-based artificial intelligence-enabled freight orchestration platform that allows users to monitor distribution networks with built-in analytics about performance.
  • Base Power, an Austin-based firm that provides battery backup services and a monthly power offering for customers in the Lone Star State while touting clean energy.
  • Wilya, a New York City-based software solution that helps manufacturers manage existing workers and create pools of on-demand, flexible talent.
  • Cargado, a Chicago-based platform that claims it will help provide increased transparency, engagement and security for cross-border logistics. 

Among the 16 companies Ironspring backed in its first fund, three startups stand out for the construction industry:

  • Document Crunch, an Atlanta-based startup which offers a generative AI-based solution for contract management. It features a chatbot that can answer contract questions.
  • Handle, an end-to-end solution that manages crediting and payment rights for contractors. The San Francisco company works with both material suppliers and contractors to smooth out the payment process.
  • Join, an Oakland, California, firm that documents and keeps track of early construction phase planning decisions for the whole team. It also provides insight into costs, and allows input on all sides of the spectrum, from owners to builders and designers.

The new fund comes even as contech funding plummeted 44% year over year to $3 billion in 2023, down from $5.4 billion in 2022, according to Cemex Ventures, the contech-focused venture capital arm of Madrid-based Cemex. However, the firm predicted that the first half of 2024 would see the industry stabilize, which has at least partially held true — investment in the space grew 20% year over year for the first quarter of 2024 to $672 million, per a Cemex Ventures report.

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