$140M VC Fund Launched by Ex-NEA & Uber Leaders

Construct Capital: A New Venture Fund Focused on Manufacturing and Supply Chain Innovation

Dayna Grayson and Rachel Holt initiated the formation of Construct Capital in late 2019, following a six-year acquaintance established in Washington, D.C. through a shared connection.

Grayson identified an opportunity to establish a new venture brand concentrating on manufacturing-related investments, building upon her experience at NEA, where she began working in 2012.

From Uber to Investing

Holt, having progressed from a city general manager role at Uber in 2011 to leading the company’s mobility division by 2018, sought a transition to full-time investing. She was initially brought into NEA by Grayson to identify promising early-stage opportunities.

“Naturally, we didn’t foresee the emergence of COVID-19,” Holt notes. Nevertheless, they proceeded with fundraising, successfully securing $140 million in commitments from a diverse group of institutional investors, including endowments and foundations, as well as fellow venture capitalists like Aileen Lee of Cowboy Ventures, Josh Kopelman of First Round, and Scott Sandell, a former colleague of Grayson’s at NEA.

Investment Focus Areas

Construct Capital’s investment strategy centers around five key themes: decentralized manufacturing, supply chain visibility, automation, transportation, and mobility. The firm is actively deploying capital into companies within these sectors.

Among their initial investments are Chef Robotics, a company developing high-throughput food assembly solutions; Copia, a provider of tools designed to enhance engineering workflows and minimize downtime; and ChargeLab, an electric vehicle charging software developer, which Holt characterizes as the “Android equivalent” within the charging infrastructure landscape.

Insights from the Founders

To gain a deeper understanding of Construct Capital’s investment philosophy, we spoke with Grayson and Holt, who recently secured office space in Washington, D.C. for their team, which includes two junior investors.

The following is an edited excerpt from that conversation.

Identifying Investment Opportunities

TC: Rachel, could you describe the types of startups you identified while at NEA and how they aligned with your investment perspective?

RH: I consistently gravitated towards businesses addressing tangible, real-world challenges. For example, I invested in MotoRefi, an auto-refinancing platform, recognizing a need I observed directly while interacting with Uber drivers. I continue to serve on that company’s board.

Both Dayna and I have consistently been drawn to what we term ‘foundational industries.’ During my time at Uber, I identified opportunities within transportation, supply chain management, and logistics. While leading the Jump e-bike initiative, we encountered complexities in sourcing components from China, experiencing significant delays in tracking shipments and navigating port logistics. This highlighted the need for improved supply chain solutions, a need further emphasized by the COVID-19 pandemic.

Supply Chain Focus: Domestic vs. Global

TC: Given the recent disruptions, are you primarily focused on global supply chain opportunities or those within the domestic market?

DG: Our primary focus is domestic investment. We will consider opportunities in Canada and, occasionally, Europe. However, we lack the dedicated personnel required to effectively invest in Asia at this time.

The COVID-19 pandemic has dramatically accelerated consumer demand. Companies that had planned infrastructure upgrades to accommodate future growth are now implementing them immediately, creating significant strain on existing systems. Tradeswell, one of our portfolio companies, provides data-driven visibility across the supply chain, from online sales data to inventory fulfillment. While traditional consulting firms can offer similar insights, the urgency of the current situation demands real-time information and automated solutions.

Investment Size and Ownership

TC: You participated in both the seed and Series A rounds of Tradeswell. Is this a typical investment pattern for Construct Capital? Furthermore, what is your typical check size and target ownership stake?

RH: We generally write checks ranging from $2 million to $6 million. We often lead these rounds, though they can be part of larger funding rounds up to $12 million.

DG: We aim for a reasonable ownership stake, typically around 15%. We intend to maintain a focused portfolio where each company receives substantial attention and dedicated resources. We don’t employ a standardized approach; our support is tailored to the specific needs of each entrepreneur.

Board Involvement

TC: How important are board seats to your investment strategy?

RH: Our priority is to understand the entrepreneur’s needs and provide value in the most effective way possible.

The Advantage of a Washington, D.C. Location

TC: Does being based in Washington, D.C. offer any unique advantages as investors?

DG: We invest nationally. While we would welcome opportunities in the D.C. area, our initial investments are located in the Bay Area and on the East Coast.

RH: Dayna had experience operating remotely, and I managed teams across the U.S. and Canada while at Uber. We don’t prioritize geographic proximity.

Remote Investing and the Future of Fundraising

TC: Do you anticipate continuing to invest remotely even as the world returns to a more normal state?

DG: I believe certain changes are here to stay. The ability for founders to connect with investors via platforms like Zoom, regardless of location, is beneficial. I’m pleased to see a more efficient fundraising process emerging.

RH: I think it’s a significant benefit for entrepreneurs to be able to select the best fit for their company, rather than being limited by personal connections or geographic convenience. It also allows them to build their companies in locations that are most conducive to their success, rather than prioritizing access to funding.

For further insights into the firm’s vision, please visit their blog post.