A venture capital firm is planting roots in Louisville, with a specific focus on growing the construction technology space.
Shadow Ventures is setting up local operations, led by Louisville native Nick Durham. It is a seed stage venture capital firm focusing on the "built environment," or technology startups related to construction, real estate and climate.
Durham grew up around the construction industry working for his father’s company, Pat Durham Builder Inc. At the time, he said he would ask him why there wasn’t more tech integrated into construction processes.
“We're still taking pen and paper to the job site,” Durham said. “For me, the big question was, "How do we get more leverage and find more efficiency like every other industry is doing?’”
He said the construction industry has been historically underserved in terms of innovation and venture capital, despite being one of the world’s largest asset classes.
He joined up Shadow Ventures in 2019. The firm was launched the year prior by KP Reddy, an entrepreneur out of Atlanta, Georgia. Matthew Ohlman is also a partner at Shadow Ventures.
Durham said he moved back to Louisville for a couple reason. For one, he just had a child, so moving to be closer to family was important to him.
Another is the startup ecosystem in Louisville. Durham said he’s spent some time in more mature tech cities like Denver and Chicago, and he believes Louisville is in a similar place they were a couple years ago.
On a trip to scout out the tech scene in Louisville prior to his move, his belief in Louisville’s potential was solidified.
“I saw a great community foundation and extreme potential for the community to grow over the next decade,” Durham said. “… Louisville specifically, can become and grow into an ecosystem much like those other cities.”
Since its launch, Shadow Ventures has made 23 early-stage investments into the built environment market, deploying more than $20 million in capital. The firm usually invests about $1 million to $1.5 million in a startup, typically taking an ownership percentage in the company.
Some companies in its portfolio include ICON, a company that 3D prints houses in Austin, Texas, and Aren AI, an infrastructure inspection tech company.
Durham said ICON and Aren AI are good examples of the kinds of companies Shadow Ventures seeks to invest. While creating a product that helps move the construction industry in new directions, ICON also a transformational goal of combatting housing shortages in the U.S.
Aren AI uses drones to inspect roads and bridges, limiting the need for manual inspections. Using photogrammetry technology, the company can be more accurate when assessing weakness in infrastructure, ultimately creating safer structures.
A vast majority of investors with Shadow Ventures are architecture, engineering, construction and real estate firms who are looking to learn how to leverage emerging technology to gain a competitive advantage, increase profits, or strategically position their business for the future, Durham said. There are some local firms who are investing, including forensic engineering company, Donan Engineering.
Durham is looking for a space to house Shadow Ventures’ Louisville office. He’s also anticipating hiring more associates at the firm as well. For now, Durham is renting a space at Story Louisville.
One aspect of Durham’s mission is to bring more education about venture capital funding to Louisville startups. He said he wants to help founders understand all the nuances and intricacies of venture funding, so they know what to pitch when given the chance.
He’s hosting office hours every Friday from 1 p.m. to 3 p.m. at Story in NuLu. Interested parties should email first at ndurham@shadow.vc.
