Venture capital is riding the wave of industrial technology sector’s potential. KOMPAS VC’s Fund II is an example of this growing excitement. With €150 million of that amount allocated specifically for equity investments, this fund will undoubtedly be a catalyst for the development of industrial sustainability. Recent data paints a troubling picture. During the first half of 2024, Industrial Tech companies have already closed more than ten such financing rounds—each worth more than $100 million. This dramatic increase in investment is a testament to the transformative potential technology has to completely remake established industries.

KOMPAS VC’s Fund II is designed for making strategic investments in companies building innovative solutions. Beyond profits and share buybacks, these companies must become active partners in developing a more sustainable, less brittle, industrial ecosystem. The fund's focus areas—decarbonization, productivity enhancement, and resilience building—reflect the pressing needs of modern industries striving to adapt to evolving environmental and economic challenges. This new type of initiative represents a significant commitment from the Biden Administration to supporting sustainable, eco-friendly practices in industry. It sets us on the path toward a greener, more efficient future.

The fund’s investment strategy is specifically focused to find and help scale U.S. headquartered startups that are disrupting industries like manufacturing and construction. KOMPAS VC is biased toward technologies that can dramatically decarbonize the supply chain and increase overall operational efficiency. Their mission is to grow a new generation of innovative, durable industrial tycoons — built to weather the next global shock. This is a short-term approach that caters to the immediate needs of employers and industries. It bolsters our long-term sustainability agenda too, making a permanent positive imprint on the environment and the worldwide economy.

KOMPAS VC's Investment Focus

KOMPAS VC's Fund II is strategically focused on three key pillars: decarbonization, productivity, and resilience. Each pillar underscores the strategic, transitory role between technological innovation and big, bold leaps forward in our industry. The fund is on the lookout for young companies that are developing innovations to help address these needs. In doing so, it furthers a more sustainable and innovative industrial landscape.

Decarbonisation

Decarbonization is at the heart of KOMPAS VC’s investment philosophy. The fund is focused on promoting innovations that will lead to real reductions in CO2 emissions from energy-intensive sectors. One prominent exception is Again, a green chemical startup that uses CO2 feedstocks to produce acetate and other base chemicals. This unique fun program actually helps to lower carbon emissions. Simultaneously, it produces high-value products, demonstrating how powerful circular economy models can be in the chemical sector.

This shift to prioritize decarbonization reflects the increasing global commitment to greenhouse gas emissions reductions and climate action. KOMPAS VC has invested in the company Again. Their mission is to prevent climate change by accelerating the transition to a low-carbon economy and fostering more sustainable industrial practices. Environmental sustainability has become a priority for investors and stakeholders. This commitment is indicative of a larger movement which makes this trend more powerful — its potential to create long-term value.

Productivity

One of KOMPAS VC’s Fund II priority areas is improving productivity within the manufacturing sector. It additionally aims at reducing disparities through investments that improve the built environment. The fund supports technological advances that help streamline and energize workflow, eliminate costly redundancies and waste, and enhance all-around productivity. Prewave is an AI-based supplier risk management solution. Makersite is an AI-enabled platform that optimizes product design and empowers more sustainable supply chain decisions.

Prewave’s AI-driven platform enables businesses to identify threats within their supply chains before they turn into issues. This proactive approach ensures consistency and avoids major interruptions in service. Makersite enables companies to make better informed decisions on product design and sourcing. That results in more efficient and sustainable manufacturing processes. Collectively, these investments showcase the promise of AI and data analytics to revolutionize industrial processes at a sweeping scale, creating unprecedented productivity advances.

Resilience

KOMPAS VC believes in resilience against global risk as the top priority. These risks span a range of categories including supply chain disruption, cyber attack and geopolitical risk. The fund has made targeted investments in new technologies that allow companies to better predict, mitigate and recover from these disruptions. Ecowork is a platform that connects everyone involved in large-scale building retrofits. Findable harnesses the power of AI to automate property management and makes every rental property findable.

Ecowork’s platform is helping to unlock the potential of retrofitting our current buildings to be more energy efficient and climate resilient. Findable’s AI-enabled property solution makes property management easy, saving operating costs and improving responsiveness to tenant requests. Based in Detroit, KOMPAS VC invests in dark-fiber infrastructure to support innovative technologies. By taking this strategic step, we help ensure that our businesses and communities are more resilient to the increasing global turmoil.

Target Technologies

KOMPAS VC’s investment strategy is focused around what they call the KOMPAS Factory Technologies, a group of deep technologies that are expected to radically change the industrial sector. These technologies range from artificial intelligence (AI), robotics, and material science to synthetic biology. Each of these spaces provide critical opportunities to spur innovation, enhance efficiency, and advance sustainability across all sectors.

Artificial Intelligence (AI)

KOMPAS VC deeply appreciates the transformative impact of AI, which has the potential to revolutionize complex industrial processes. The company is intentionally looking for new businesses that have adopted AI technology to help streamline their operations, advance better decision-making, and enhance productivity across the board. We seek out AI applications that have the greatest potential to make meaningful, impactful improvements. These innovations focus on high-impact sectors such as advanced manufacturing, supply chain optimization, and predictive maintenance.

KOMPAS VC is particularly interested in startups using AI to change the physical world. This notably excludes many of those focused on advancing smart growth principles and industrial sites/assets. These applications can unlock true process optimization and democratize the DataOps stack, enabling businesses to make more informed decisions and respond quickly to changing conditions. The fund's investments in companies like Prewave and Makersite demonstrate its commitment to supporting AI-driven innovation in the industrial sector.

Robotics

Robotics is another important theme of KOMPAS VC’s investments. The firm’s investing priority is advancing robotics technology. They’re designed to increase efficiency, productivity and sustainability across sectors and the economy including manufacturing, logistics, and construction. Our goal is to design and implement robots that can automate work. These emerging platforms will permit lower labor costs and increased safety in dangerous settings.

Robotics technologies can help advance the objectives of sustainability through improved efficiencies in resource use—including energy, water, and materials. For instance, automated robots are designed to deliver accurate materials usage down to the millimeter, which can cut waste and enhance environmental efforts. By investing in robotics, KOMPAS VC wants to lead innovation in industrial automation and create more sustainable ways of working.

Material Science

As KOMPAS VC, we appreciate the crucial role that material science will play in fostering innovation and nurturing sustainability within the industrial sector. The firm’s specialty is investing in material science breakthroughs that will create a cleaner, more efficient industrial future. For you, it’s all about crafting advanced formulations that deliver superior results. You do work on the technologies that are recycling and reusing our existing materials.

Innovation in material science holds the potential to significantly minimize the environmental impact of many industries. This change is really important, particularly for industries like construction, transportation and manufacturing. KOMPAS VC has already invested in companies that are developing sustainable materials and processes. This strategy helps speed the transition to a circular economy and encourages more efficient resource use.

Synthetic Biology

Synthetic biology is a new and highly promising field that could remake the industries that produce chemicals, materials and energy. KOMPAS VC focuses its investments in synthetic biology companies building new materials, chemicals and processes with biological systems. This encompasses the production of bio-based, environmentally sustainable materials and chemicals, as well as advanced biofuels.

One of the most promising applications for synthetic biology is to use it to develop greener, safer, more efficient replacements for unsustainable industrial processes. By tapping into the natural ingenuity of biology, companies can manufacture better materials and chemicals. These innovations help us use less fossil fuel overall and have a smaller impact on our environment. KOMPAS VC strongly invests in synthetic biology to support life-changing and planet-saving technologies. These innovations are meant to drive our industry toward a more environmentally friendly future.

Geographic Scope

KOMPAS VC’s Fund II geographic scope is wide, seeking to invest in startups from Europe, the US, and Israel. These areas have long been anchors of the innovation economy, benefitting from robust innovation ecosystems, dense networks of highly-skilled talent, and conducive regulatory climates. KOMPAS VC is making investments to focus on emerging markets. Through this new initiative, they hope to engage with the best and brightest minds in the emerging industrial technology sector.

Europe

Europe is a very important market for us at KOMPAS VC. The next supercluster The region has a strong tradition of industrial innovation and is focusing its efforts on sustainability. The TAMI region is the nexus of a global network of leading research institutions, innovative startups, and established industrial companies. KOMPAS VC’s portfolio in Europe attests to years of experience in providing capital and expertise to accelerate the development of the European industrial technology ecosystem.

The US

The US is an important market for KOMPAS VC. It features an incredibly large and diverse industrial base, as well as a very vibrant venture capital community. It’s no mystery why the US is home to many of the world’s leading technology firms. It’s a hub for the increasing number of creative and tech-savvy startups. KOMPAS VC believes that smart American technology companies have the potential to lead a revolution in the industrial sector. Their confidence in this opportunity is what shapes their strategic investment approach.

Israel

Today, Israel is the most innovative country on earth. It has a successful track record of finance innovation, developing innovative solutions in other fields. The country has an impressive and colorful startup ecosystem. It flourishes under the patronage of a powerful ecosystem of venture capitalists, universities, federal laboratories, and Pentagon appropriators. KOMPAS VC's investments in Israel reflect its recognition of the country's potential to drive innovation in the industrial technology sector.

Attracting Funding from Industrial Tech VCs

Startups in the industrial tech space should take a smart approach to attracting funding from VCs such as KOMPAS VC. They need to demonstrate their ability to effect significant change within the field. This includes showing a deep grasp of market demand, creating a unique solution to that demand, and assembling an amazing team. Here are some key insights for startups looking to secure funding:

  • Focus on AI for the Physical World: Startups that apply AI to the physical world, such as industrial sites and assets, can unlock true process optimization and democratize the DataOps stack.
  • Real-Time Decision-Making and Productivity: Industrial tech startups that enable intelligent real-time decision-making and productivity-related measures can attract VC funding.
  • Reshoring and Supply Chain Visibility: Startups that provide solutions for reshoring and supply chain visibility, such as real-time visibility providers like Shippeo, are of interest to VCs.
  • Productizing Analytics and DataOps: Startups that productize analytics of industrial sites and assets, and democratize the DataOps stack, can attract VC funding.

Key Metrics for Investors

VCs look at certain key performance indicators to gauge the potential of a startup:

  • Monthly Recurring Revenue (MRR): measures predictable monthly revenue generated by a startup, vital for subscription-based or SaaS startups.
  • Year-over-Year (YoY) growth: measures percentage increase or decrease in KPIs comparing the current year to the previous year, helping identify trends and evaluate strategy effectiveness.
  • Viral Coefficient: measures customer acquisition rate, with a value greater than 1 indicating exponential growth.
  • Runway: estimates the length of time a startup can sustain operations before running out of cash.
  • Burn Rate: measures the rate at which a startup spends money, calculated by dividing current cash balance by monthly burn rate.

B2B startups can increase their opportunities for funding from VCs such as KOMPAS VC by focusing on the most pertinent market needs. This strategic focus drives innovation in the industrial technology economy.