Construct Capital’s $300M fund targets critical infrastructure automation

Construct Capital co-founders and general partners Dayna Grayson and Rachel Holt continue to dive into innovation that some investors may not think is so sexy, but actually runs behind the scenes so that our food gets to grocery stores every week and our packages arrive when they say they will. And this time, they have an even bigger arsenal of capital to support their efforts.

The pair founded the fund in 2020 — read more about it here — and their backgrounds with NEA and Uber, respectively, and closed their first fund of $140 million last year.

This week, Construct announced $300 million in new funding for its second vehicle that includes a $225 million for early-stage (leading or co-leading seed and Series A) and $75 million earmarked for later-stage opportunities. This gives the firm a total of $440 million in assets under management at this point.

Grayson, Holt and their team invest in companies operating in and around the manufacturing, transportation and logistics sectors, which, they say “represent over half our country’s GDP and have not been tech-enabled.”

To put it in perspective, much of this has been driven by consumer demand of the past couple of years, from food delivery, a  $150 billion market, to e-commerce in general which is a market pushing $1 trillion in value within the decade. Both are being quickly adopted thanks, in part, to the global pandemic.

In turn, that has caused a bottleneck in the supply chain and highlighted “cracks already in the foundation,” so to speak. Not to mention factories and large manufacturing companies dealing with shortages of both materials and labor. Grayson says the future of the supply chain might actually be more of a “hub-and-spoke” kind of thing versus a bonafide “chain.”

She also notes there isn’t a better time than now to invest early in the right building blocks and infrastructure to drive the next generation of technology companies.

“These are areas that have been chronically under invested in,” Holt added. “Given the recent economic climate, the pandemic and the geopolitical situation have only highlighted the importance of us building a tech infrastructure in these spaces so that they can be more agile and more responsive to where consumers are going, not where they have been.”

Capital from the first fund went into 15 companies, and Grayson and Holt say they expect the second fund to infuse about 20 companies with funding. Some of the companies in Construct’s portfolio include Chargelab, Chef, Hadrian, Tradeswell, Veho, Verve Motion and Woflow.