The Macro Shift

General-purpose software investing is increasingly viewed as a crowded, high-risk theater due to LLM commoditization. The real opportunity for venture capital has migrated to the “physical world”—industrial automation, infrastructure resilience, and hard-tech decarbonization. Kompas VC’s latest €160M Fund II close confirms that institutional capital is prioritizing domain-specific “physical AI” that integrates with legacy operational workflows over speculative B2B SaaS.

What Happened

Kompas VC closed its second fund at €160M, bringing its total assets under management to approximately €310M. The firm is doubling down on its thesis: early-stage investments (Seed to Series B) in industrial technology, built environment software, and energy decarbonization. Backed by institutional investors including Realdania and VKR Holding, the firm focuses on companies that build, secure, and decarbonize essential industrial infrastructure across Europe, North America, and Israel.

Why It Matters

First-order: Capital is becoming highly siloed. For founders in industrial AI or construction tech, liquidity is available but requires demonstrable “real-world” ROI. VCs are moving away from top-line ARR growth as the sole north star, favoring defensible operational efficiency metrics.

Second-order: The definition of “AI-first” is changing. Startups attempting to sell software wrappers will face funding headwinds. Investors now demand deep integration into physical assets (robotics, energy grid sensors, building materials) where proprietary data loops are harder to replicate.

Third-order: We are seeing a structural realignment toward economic nationalism. Geopolitical instability is forcing a reliance on domestic supply chains and critical infrastructure, turning “resilience” into a primary sales driver for B2B industrial startups.

The Numbers

  • €160M: Size of Kompas VC Fund II, specifically targeting industrial technology.
  • €310M: Total assets under management across two funds.
  • €1M–€5M: Typical initial ticket size for Seed to Series B deployments.

What To Watch

  • Sector Consolidation: Look for increased M&A activity from incumbent industrial conglomerates seeking to acquire “physical AI” capabilities to hedge against labor shortages.
  • Data Moats: Competitive advantage will shift from model architecture to data access. Founders who own the sensor layer in a factory or grid will be the primary acquisition targets.
  • Capital Selectivity: Expect VCs to prioritize startups that offer measurable carbon reduction alongside productivity gains—a dual-value proposition that unlocks both traditional and green-tech capital pools.