Discussing “industrial” venture capital with investor Dayna Grayson: Human composting and timber marketplaces

Amid the excitement in the venture capital realm surrounding generative AI, Dayna Grayson, a veteran venture capitalist who co-founded her own firm, Construct Capital, five years ago, has directed her attention towards seemingly mundane software capable of revolutionizing industrial sectors. While her mission doesn’t rule out AI, it also isn’t contingent upon it.

Construct Capital recently spearheaded a seed-stage funding round for TimberEye, a startup focused on creating vertical workflow software and a data layer. TimberEye claims that its technology can accurately tally and measure logs, aiming to establish itself as the premier marketplace for timber procurement. Curious about the potential size of this market? Well, in 2021, the global forest products industry reportedly reached a staggering $647 billion.

Another investment by Construct Capital may not be as glamorous as large language models, but it’s Earth, a startup dedicated to human composting. Earth’s innovative process converts bodies into nutrient-rich soil within just 45 days. While it may sound unpleasant, it’s a savvy market to target. Currently, cremation holds 60% of the market share, a figure projected to rise to 80% within the next decade. Moreover, the environmental impact of cremation, likened to a 500-mile car trip, has prompted a growing interest in eco-friendly alternatives. Earth aims to capitalize on this trend by attracting an increasing number of environmentally conscious customers.

While Dayna Grayson and her co-founder Rachel Holt at Construct Capital have chosen to sidestep some of the AI hype, they still face many of the same challenges as their counterparts. Grayson recently discussed these challenges with me during a Zoom call from Construct’s headquarters in Washington, D.C. One such challenge is timing. They launched their first three funds during a period of peak enthusiasm in the venture industry. Like many other venture firms, some of their portfolio companies are grappling with challenges stemming from overfunding. However, despite these hurdles, they are forging ahead into the future and, it seems, successfully bringing along some traditional industrial businesses. Below are edited excerpts from our recent conversation, condensed for brevity.