In Blindness, Dayna Grayson and Rachel Holt did not have the best time. It was late in early 2019 when the two, both of Washington who met through a mutual acquaintance six years ago, decided to first work on negotiations and start a fund together.
At the time, Grayson offered an opportunity to create a new venture brand, largely focused on types of Manufacturing deals She was funding inside the investment giant NEA, which she joined in 2012.
Holt, who joined Uber in 2011, moving from a city general manager in Washington to the last head of the company’s mobility unit in 2018, was also poised for a change and about the prospect of full-time investment Were excited, which was brought. To scout newborn deals on the side by NEA Grayson.
“Of course, we didn’t expect COVID,” says Holt. Nevertheless, this did not stop them from moving forward with fundraising and, in the process, secured $ 140 million in capital commitments, which Holt calls “specific types of institutional LP base, such as endowment, foundations,” and a few others. Described as voters. Cowboy Ventures’ Elaine Lee, First Round’s Josh Kopelman and Grayson’s former NEA affiliate, Scott Sandals.
Construction, which focuses primarily on five topics – decentralized manufacturing, supply chain visibility, automation, transportation and mobility – is already actively writing checks, in fact. Among the companies he has supported are Chef Robotics, A startup focused on assembling food at high throughput; Copia, A food waste management platform that connects businesses that have leftover food with organizations that feed the hungry; And ChargeLabA manufacturer of electric vehicle charging software that Holt compared to “Android of the charging market”.
To get a better idea of the types of startups that might be ideal for the firm moving forward, we spoke first with the pair, who recently signed a lease for their team (also building Have done) Two junior investors), But who were working together from Grayson’s house today. Parts of that conversation are lightly edited for length and clarity.
TC: Rachel, which startups did you identify for NEA and how do they fit into your talk as an investor?
RH: I was always attracted to solving real-world problems, so between investments [I made as a scout for] NEA is an auto-refinancing company called MotoRefi Because it was a problem I first noticed, talking with Uber drivers. I am still on the board of that company.
But both Dana and I have been attracted to what we have called fundamental industry. I saw [opportunities] On the transport side, on the logistics side, on the supply chain side [at Uber]. While we were jumping [as part of the mobility unit of Uber], We were building an e-bike, which is actually a very complicated piece of equipment to pull together, and you will see that some had left a factory in China, you could track it for five weeks Would lose, then you would see it entered a port in America, and then you would lose track of it again and I knew there had to be a better way. . . And I think COVID only exposes the urgency around some cracks in the system.
TC: Right. I think we are all shocked by the supply chain issues because they are definitely related to vaccines and PPE. Are you focused on global supply chain opportunities or only domestically?
DG: We are mainly focused at the domestic level. We will make occasional investments in Canada and Europe. we will do [invest in] Asia without some more dedicated personnel, and it is not yet in scope.
What we have seen in COVID is a huge acceleration of consumer demand, so if you are a brand or an e-tailer and you were planning all these upgrades, this demand will be met two years from today. Really put a crunch on the system. Companies like [the e-commerce optimization startup] Treadwell, Brings data visibility into the supply chain from where sales are happening online to how they are being completed in inventory. This is something that can help analysts and agencies help you, but when you are just looking at your real-time urgency and the crunch of having information at your fingertips, you can no longer wait for human intervention . You have to automate.
TC: Have you invested in Tradeswell’s seed round and its Series A? Relatedly, what size check are you writing and when you invest in a company, how much ownership will you target?
RH: Our typical sizes range from $ 2 million to $ 6 million. We like to lead those rounds, but they can be part of a round, which goes to $ 12 million.
DG: For ownership, something reasonable is close to 15%. We do not have a very large portfolio. Every company really matters for the fund that I think you know something about, is as close to 15% as we can. I mean, we want to be. I think the point we like to emphasize is that we don’t have a very large portfolio. Every company really matters to the fund, every company gets dedicated time and attention from us, there is no cookie cutter approach where if you work with construction, you get x. It depends on the entrepreneur and what they need.
TC: How important are board seats for both of you?
RH: What is important to us is getting the company where they are and understanding what the entrepreneur needs and how we can add value.
TC: You’re in Washington. As an investor focusing on what you do, is there a special benefit to being there?
DG: We are investing at the national level. If we find great projects here, we would love to join them, but two of our first investments are in the Bay Area and two are in the East Coast.
RH: Mage [had been operating remotely at times before COVID] And I was running teams in the US and Canada [at Uber]. We do not have a backyard bias.
TC: So you are likely to do more remotely even after the world is normal.
DG: I definitely feel that some things are here, and that’s great for the founders. Their ability to engage investors on Zoom, whether they are down the road or around the world, is really in their interest and I am glad that there is a potential for more efficient fundraising for a lot of them.
RH: I think for entrepreneurs, they are trying to find the best fit for what they are building, versus just being the person they know because they run to the gym, a big net. Is positive [to come out of this whole thing]. This enables them to build companies in the place where they are best suited to form the company, rather than where they will look from the funding perspective.
For a fuller look at what the team is creating, you can check out their blog post here.