Ironspring Ventures Doubles Down on Industrial Innovation: A $100 Million Bet on Manufacturing, Construction, and More
The industrial sector, encompassing heavyweights like manufacturing, construction, transportation, and energy, is undergoing a significant transformation. While often overlooked by traditional venture capital firms, this sector represents a substantial portion of the U.S. economy, accounting for over half of its GDP. Recognizing this untapped potential, Ironspring Ventures, a leading early-stage venture firm, has doubled down on its commitment to industrial innovation with a $100 million second fund.
Founded in 2020, Ironspring emerged as a pioneer in this space, driven by the belief that the industrial sector was ripe for disruption with the advent of new technologies and a growing demand for efficiency and sustainability. “There is a big gap in the venture industry that deeply studies and has genuine GP market fit with these industrial markets and can help them navigate a pretty challenging go-to-market [process],” says Ironspring co-founder and general partner, Ty Findley.
The firm’s initial $61 million fund garnered positive results, backing 16 startups, including notable names like Solvento, a payments infrastructure platform for trucking companies in Mexico, OneRail, a last-mile logistics startup, and Prokeep, a communications platform for distributors.
However, Ironspring’s latest fund aims to reach even greater heights. The $100 million injection will allow the firm to write larger checks, ranging from $2 million to $4 million, staying competitive with the increasingly robust seed funding rounds. This capital infusion also enabled Ironspring to expand its team, hiring Colleen Konetzke as its first principal and Stephanie Volk as head of platform, demonstrating the firm’s long-term vision and commitment to building a robust team.
Findley believes the current macroeconomic landscape provides fertile ground for investment in industrial startups. Ongoing supply chain constraints, exacerbated by the Covid-19 pandemic and the conflict in the Middle East, highlight the need for robust and innovative solutions. Furthermore, government initiatives like the Inflation Reduction Act and the CHIPS and Science Act, focused on bolstering domestic manufacturing and technology, have created a wave of optimism and investment.
"We are seeing more top-tier tech and innovation talent flood into these industries, " Findley stated. "Whether they are recirculating from recent tech unicorns, or just other tech talent that simply wants to make a big impact on their career that’s not based on photo sharing or adtech or chasing the next crypto coin, that is what the macro trends are.”
This influx of talent is evident in companies like GoodShip, a freight orchestration and procurement platform founded by former Convoy operators. Ironspring co-led GoodShip’s 2023 seed round and followed up with a participation in the Series A round, demonstrating their confidence in the company’s future.
While Ironspring initially carved a distinct niche in the industrial venture space, the sector has attracted increased attention from other venture capitalists. Deep-pocketed players like Andreessen Horowitz, General Catalyst, and Bessemer have entered the arena, vying for a piece of the industrial pie. However, Findley sees this as a positive development rather than a threat.
"I’m a believer that the more capital flowing into these industries the better,” Findley emphasizes. "Those are great allies. We wouldn’t be able to do our job at the seed-stage if we didn’t have great downstream growth."
Findley views the growth of the industrial venture space as a collaborative effort, fostering a more robust ecosystem for startups. Ironspring’s commitment to collaboration is reflected in its popular podcast, Heavy Hitters, featuring interviews with notable VCs including Katherine Boyle (a16z), Aaron Jacobson (NEA), and Lior Susan (Eclipse Ventures), providing insights and resources for portfolio companies and the wider community.
Despite the increased competition, Ironspring believes it will remain a standout player in the industrial venture landscape. The firm’s unique selling proposition lies in its deep sector expertise and its "secret sauce"– a network of Limited Partners (LPs) comprising industry veterans and operators. These LPs, owning construction companies and manufacturing plants, offer valuable guidance, advice, and potential customer relationships, providing a crucial edge for portfolio companies.
Ironspring’s location in Austin, Texas, further strengthens its position. While the tech hub’s future has been scrutinized recently, Findley argues that the city’s industrial heritage and the presence of industry giants like Tesla and Samsung create a fertile ground for the digital industrial revolution.
"The U.S. can’t allow these critical industries to be left behind," Findley concludes. "We are here for the long haul in ensuring that will never happen."
Ironspring’s commitment to building a robust and sustainable industrial future is reflected in its ambitious second fund. By backing innovative startups and fostering collaboration, the firm is not just investing in technology but also in the very foundation of the American economy. The next chapter of industrial innovation is being written, and Ironspring Ventures is firmly at the forefront, leading the charge towards a more efficient, sustainable, and technologically advanced future.
