Shadow Ventures today announced the launch of its second fund, a $34M seed fund to continue its core mission of partnering with ambitious entrepreneurs to solve the most challenging technical problems in core global infrastructure.

The core thesis behind the fund is that modernizing mission-critical physical infrastructure – buildings, housing, civil infrastructure (roads, bridges, transit), energy and power grids, data centers, building products, supply chain/cold chain, and water – remains one of the world’s most pressing challenges. The funding required to upgrade this infrastructure over the next decade would surpass the GDP of a major European country. With global fiscal deficits at all-time highs, there seems to be only one viable solution: Armies of technical teams solving the most complex infrastructure problems with better leverage via code, robotics, automation, and materials breakthroughs.

The problem is that today, startups focused on physical infrastructure receive less than 2% of all venture capital funding, which is woefully undercapitalized compared to their corresponding 20% share of global GDP.

With Fund II, Shadow seeks to fill the significant gap in early-stage funding for startups leveraging scientific and technological breakthroughs to modernize physical infrastructure.

"Most generalist VCs shy away from advanced technology at the seed stage in the built environment due to slower adoption cycles," said KP Reddy, Founder and Managing Partner at Shadow Ventures. "Industry firms often lack the technical expertise to support founders through deep technology commercialization. Startups competing on the frontier in our industries need technical moats with thoughtful distribution strategies, and that’s precisely what we’re interested in funding and what we're great at assisting founders with.”

The frontier technology themes in focus for Fund II will include artificial intelligence, machine learning, robotics, 3D printing, materials science, modular and prefabrication building systems, data infrastructure, advanced hardware, advanced reality capture, financial technology, and alternative energy platforms. These themes represent a potential step-order change in infrastructure quality, durability, cost, speed to build, safety, and sustainability.

Since the firm’s inception in 2018, Shadow Ventures has consistently invested early in leading built environment frontier technologies, with notable seed-stage investments in 3D printed housing startup ICON, robotics leaders BotBuilt and Okibo, AI bridge inspection platform AREN, and AI reality capture platform ConstructN.

Beyond Shadow’s industry expertise and technology specialization, their portfolio also benefits from access to 60+ strategic investors, representing the full value chain of services supporting global infrastructure, real estate, architecture, engineering, and construction. New strategic LPs in Fund II include: Builders First Source, Hensel Phelps, MiTek, Supreme Steel, Thornton Tomasetti, POWER Engineers, JB&B, Pennoni Associates, Terracon, Mead & Hunt, and Tourmaline Capital Partners.

For more information about Shadow Ventures, their portfolio, and their latest fund, please visit shadow.vc.