A new Pittsburgh-based investment vehicle has launched from an established venture studio that's looking to land deals for startups that are using autonomous robotics, AI or other Industry 4.0-based operations.
Carnegie Capital Partners LLC, which will be managed by the Carnegie Foundry — backed by U.S. Steel Corp. and Oshkosh Corp., will serve as a special purpose vehicle to allow interested parties to invest directly into Carnegie Foundry. The Foundry itself looks to more broadly aid the development and commercialization of industry-specific solutions being created at the Carnegie Mellon University-affiliated National Robotics Engineering Center in Lawrenceville.
"Launching startups in industrial robotics and automation are inherently more expensive and more complex than launching software startups, which is where venture funds tend to operate," Robert Szczerba, CEO of Carnegie Foundry, said in a prepared statement. "The scarcity of seed capital, despite the industrial automation and innovation expertise in our region, puts U.S. companies — who depend on a robust pipeline of innovations — at a disadvantage relative to their global competitors. Carnegie Capital Partners, as the investment arm of Carnegie Foundry, aims to address that challenge by offering a straightforward vehicle for impact investment in Industry 4.0."
Carnegie Capital Partners is hoping to solicit collaboration with local investors who might be interested in helping to fund the next generation of advanced technologies. The investment vehicle is "not subject to any overhead or carried interest" and that all investor capital will go directly into Carnegie Foundry to join prior investments made by U.S. Steel and Oshkosh.
Matthew B. Wachter, vice president of investment and finance for Carnegie Foundry, said the idea behind Carnegie Capital Partners came from conversations the Foundry has had with parties who would like to invest in the Foundry directly. Carnegie Capital Partners as an entity will sit on the same capitalization ownership table as U.S. Steel and Oshkosh, all of which will serve as the main investors in the Foundry's $20 million Series A funding round. Wachter said he expects the Foundry will close that round by the end of the year.
"We are fortunate to find investors as passionate as we are about the Pittsburgh region and its preeminent position as a global leader in robotics and AI," Wachter said in a prepared statement. "Our goal is that Carnegie Capital Partners will open the door for a more diverse pool of investors, such as regional family offices, institutions and accredited investors interested in early-stage, pioneering technologies from this region."
Carnegie Foundry emerged out of its "stealth mode" in September 2021. Szczerba, who co-founded the organization alongside its CTO Herman Herman and EVP of Business Development Jeff Legault, is hoping the Foundry will help launch eight to 10 companies per year in and around Pittsburgh over the next four to five years.
A previous version of this article stated that Carnegie Capital Partners will serve as a fund to invest in startups directly. The article has since been updated to reflect that Carnegie Capital Partners will serve as an investment vehicle into Carnegie Foundry, which, as a separate entity, is looking to spur out companies emerging from ideas and concepts at the National Robotics Engineering Center in Lawrenceville.
