CHICAGO--(BUSINESS WIRE)--The 81 Collection, an early-stage venture firm investing in founders building across low margin or capital intensive ‘hard industries’ like manufacturing, real estate, retail, and construction, today announced its inaugural $41 million fund, with more than two-thirds of funding raised from current and former company founders in these industries. The capital will fuel The 81 Collection’s unique model, which applies decades of operating experience to identify and support high margin start-ups tapping automation, AI, and smart hardware to disrupt traditionally low margin industries.
“‘Hard’ businesses see a 15:1 funding gap compared to the asset-light, cloud-based businesses that have ruled Silicon Valley, and I experienced this gap first-hand as a founder looking to bring technology to the traditionally boring laundry & dry cleaning industry,” said Founding Partner Vijen Patel. “By targeting industries 20 to 30 years behind the tech stack and introducing them to technology innovation, our community built $20 billion of value in ‘hard industries’ and created more than 10,000 jobs. Our businesses weren’t interesting to most investors at the seed stage, but ended up being the better companies in the long-run, financially and socially.”
Patel founded The 81 Collection in 2021. Previously, he was the co-founder and CEO of Pressbox, a Chicago-based fabric care company acquired by Procter & Gamble in 2018. Patel remained post-acquisition to lead the re-branded ‘Tide Cleaners’ before stepping down in 2020. The 81 Collection’s Founding Members include Grubhub Co-founder and Fixer Founder Mike Evans, Industrious Chief Commercial Officer Anna Levine, Protege CEO Jackson Jhin, Farmer’s Fridge CEO Luke Saunders, Tovala CEO David Rabie, CarmaCare CEO Jamie Ahern, ShipBob Co-founders Dhruv Saxena and Divey Gulati, Alex Kirshenbaum, and Cubii Co-founders Amav Dalmia and Shivani Jain.
The new fund arrives amidst dismal economic conditions. Raw material shocks, supply chain disruptions, and labor shortages are cracking the infrastructure of ‘hard industries,’ creating openings for entrepreneurs to exploit and transform sectors starved of innovation. 77% of manufacturers report issues attracting skilled workers, and the average age of skilled construction workers is aging faster than the American workforce.
The “collection” of The 81 Collection includes more than 100 accomplished entrepreneurs in its investor base, who can uniquely help portfolio companies shorten the average four-year journey most startups endure to gain traction in these industries. The fund operates with a unique structure that unlocks coaching, access, and relationships to collectively ease the load for entrepreneurs choosing to take the less traveled path in hard industries.
“Hard, knotty problems, once solved, become a powerful asset and competitive advantage, so we’re taking a chance on tenacious hard industry founders when solving the issue is still a risk,” said Grubhub co-founder and author of Hangry, Mike Evans.
The fund also raised capital from four institutions around the Midwest, including DNS Capital, the Chicago-based investment office of Gigi Pritzker, Michael Pucker, and their immediate family.
“Vijen and the 81 Collection team have assembled an impressive community of successful founders who are uniquely equipped to tackle the complex challenges of ‘the 81%’”, said Charles Tollinche, Managing Director at DNS Capital. “We believe 81 Collection’s thesis of backing startups in industries underserved by traditional financing sources and leveraging the firm’s founder network to shorten an entrepreneur’s learning curve and catalyze growth represents a differentiated approach in the market.”
The firm participates in pre-seed and seed rounds with initial checks ranging from $500K to $1.5 million. The 81 Collection began investing from the fund in 2022 and has made eight investments to date, including:
- Bonside, non-dilutive financing for large SMB
- Cambium Carbon, fulfills large lumber orders with local lumber mills
- CarmaCare, car care subscription service making car maintenance more affordable
- Dentologie, modern dentistry with a digitally native focus
- Goose, operating system for professional pet services
- Maestro, allows artisans to co-create with others via asynchronous video
- Mezo, automates home maintenance
- Parentaly, helps women stay in the workforce through life changes
"The 81 Collection are an incredible partner because they've been in our shoes before," said Neha Govindraj, founder & CEO of Bonside, a growth platform for brick-and-mortar businesses. "They've faced the same challenges as us in their hard industries and know what it takes to ultimately achieve success. So while many investors shy away from solving hard problems in hard industries, The 81 Collection sees it, is inspired by it and backs it – that's rare."
About The 81 Collection
Founded in 2021, The 81 Collection is a collection of Midwest-based entrepreneurs focused on “hard industries”, the 81% of the GDP that is underserved by seed venture capitalists. The firm backs entrepreneurs transforming boring trades, hard work, unpleasant spaces, and structural inequity through seed capital investment and hands-on support. For more information, visit: https://www.81collection.com/.
