When Ironspring Ventures launched in 2020 to back startups in industry sectors like construction and manufacturing, it was one of the few early-stage venture firms paying attention to these capital-intensive sectors. Now, the company is doubling in size.
The Austin, Texas-based firm has raised $100 million for its second fund that will focus on industrial startups. This is a significant increase from the firm’s $61 million debut fund that closed in 2021. This latest raise allowed the firm to hire its first principal, Colleen Konetzke, and its head of platform, Stephanie Volk. The firm plans to invest Fund II in 20 startups, supporting approximately three companies a year.
“What we saw then was as real as we see today,” Ironspring co-founder and general partner Ty Findley told TechCrunch. “There’s a big gap in the venture industry that looks in depth and has a genuine fit in the GP market with these industry markets and can help them navigate a pretty challenging market [process]. When you’re really rolling [these industries] it is more than half of the US GDP. My strong opinion is that we as a country simply cannot afford to let the US fall behind.”
Industries covered by Findley include: manufacturing, construction, transportation and energy. The firm backed 16 companies in its first fund, including Solvento, a payment infrastructure startup for trucking companies in Mexico, OneRail, a last-mile logistics startup, and Prokeep, a communications platform for distributors, among others.
Ironspring has already backed six companies with Fund II and has deployed about a quarter of the fund. Findley said the main difference between Fund I and Fund II is that the additional capital allows the company to write bigger checks this time, $2 million to $4 million, which will help it stay competitive as startup cycles have become older.
Findley said he’s excited to have a new pool of capital to invest in right now because of the macroeconomic headwinds affecting the industries they focus on. The supply chain constraints that began during Covid-19 are still in place, apart from new ones caused by conflicts in the Middle East. Policy, including the Inflation Reduction Act and the CHIPS and Science Act, is bringing buzz and government money to these areas as well. Additionally, Findley added that advances in artificial intelligence could make a huge difference in these industries.
“We’re seeing more top tech and innovation talent flooding into these industries,” said Findley. “Whether they’re relaunches from recent tech unicorns, or just other tech talent who just want to make a big impact in their non-photo sharing or adtech careers, or chasing the next cryptocurrency, these are the macro trends.”
GoodShip is a good example of this. The freight and procurement orchestration platform was started by former Convoy operators. Ironspring co-led the company’s 2023 seed round with Chicago Ventures and raised to Series A earlier this year.
While Ironspring was one of the first early-stage companies to focus on this space, the category has become more crowded as deep-pocketed firms such as Andreessen Horowitz, General Catalyst and Bessemer have entered the space. However, Findley does not see the entry of these branded companies as competition.
“I think the more capital flowing into these industries the better,” Findley said. “These are great allies. We wouldn’t be able to do our work at the early stage if we didn’t have a lot of downstream growth.”
Findley said it takes a village to grow these types of startups successfully, and he’s glad other companies can bring different perspectives to their portfolio companies. He added that the company invites these other companies on its podcast, Heavy Hitters, to create a resource for their portfolio companies and beyond. The company’s podcast featured notable VCs such as: Katherine Boyle, General Partner at A16z, Aaron Jacobson, Partner at NEA, and Lior Susan, CEO and Founder of Eclipse Ventures, among others.
Findley believes they will continue to stand out among the growing noise due to their domain expertise and “secret sauce” LP base. The company’s LP base consists of operators in the industries who work in privately owned manufacturing companies and manufacturing plants and can not only provide guidance and advice to companies but also serve as leads.
Ironspring’s Austin headquarters is an advantage, Findley said, because of where they invest — a narrative that conflicts with how many others in the venture ecosystem view the once-emerging tech hub. Findley said many of the industries the company is focusing on have a history in Austin, and with Tesla moving its headquarters there and the recently approved $6.4 billion granted by the Infrastructure Act Samsung for semiconductor chip manufacturing there, it has the right talent to lead the digital industrial revolution.
“The U.S. cannot allow these critical industries to be left behind,” Findley said. “We’re here for the long haul to make sure that never happens.”
