AlleyCorp Deep Tech | August 2025
End-of-summer Check In
Hey everyone —
I hope you are enjoying the lazy last days of summer. Short newsletter for you this month - as I and most of our team is out of office. I am spending the majority of the month in quiet and sunny colorado. While I am here I am dropping in to capture our preliminary thoughts about a few interesting markets and trends that I will dive into and likely expand into full theses later.
~Brannon
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If you missed the July Newsletter - Check it out here!
🧠 Three ideas We’re Kicking Around this month
Idea # 1 - Rebuilding the Electric Grid
The U.S. grid can’t grow faster than its slowest part—and right now, that part is the transformer.
The energy industry is well aware that the grid needs 2x-5x more transmission by 2050 to handle AI data centers, EV charging, and electrified heating. But the hidden chokepoint is transformers. They’re the backbone of substations and interconnections, and right now the wait to get one is often two to three years. That slows not just renewable projects but the broader economy.
The U.S. once had a strong transformer industry, but much of it has shifted overseas. Today, we rely on a few conglomerates and foreign suppliers for critical materials like high-voltage core steel. That leaves our ability to expand the grid hostage to fragile supply chains.
Thus there may be an opportunity in modernizing how they’re built. Transformer lead times have ballooned because of recurrent (and predictable) bottlenecks - custom engineering, steel prep, coil winding, and logistics to name some. Each of those is solvable with smarter tools like standardized designs, configurators that streamline customer specs, robotics to automate winding, and tighter supply chain contracts.
Think of how aerospace or automotive evolved from slow, bespoke processes to lean, digital manufacturing. If today’s techno-industrialists apply that same mindset here, we could cut lead times dramatically while still meeting the reliability standards utilities demand. Done right, the result is faster delivery and a more resilient domestic supply chain that can flex with demand.
We’re sketching out what a new entrant in this space could look like. It feels like one of those rare alignments where industrial need, policy tailwinds, and technology all point in the same direction. If you’re building in grid infrastructure, transformer manufacturing, or adjacent supply chains—drop me a note. Let’s compare ideas and see what’s possible.
Idea #2 - Software for Hardware
New software tools are making physical systems faster, cheaper, and less risky to build.
One space I’m especially excited about right now is software for hardware. The recent emergence of a robust software layer makes building physical systems faster, cheaper, and in many ways less risky.
I think about it like this: the last decade of value creation in software has been about making digital systems more intelligent. The next decade of value creation is about making physical systems buildable like software—shorter iteration loops, better data integration, faster bring-up, and more reliable deployment. From simulation-first robotics, to generative design and firmware tools, to industrial data fabrics —there’s a new stack forming that looks a lot like the “operating system” for reindustrialization.
This is a massive opportunity. We’re talking about potentially accelerating timelines that normally stretch 18 months down to six; about allowing engineers to test 40 variations of a design where they used to be able to test four; about industrial customers who already spend billions on systems integration and compliance—shifting a fraction that spend to scale new tech suites.
I won’t spill the full thesis here (we’re writing it up as a deeper piece to publish soon), but I’ll just say this: I think the next generation of big winners in deep tech will be companies that turn “hardware is hard” into “hardware is iterative.”
If you’re building, researching, or just thinking about this space—especially how software can unlock creativity and speed in physical system development—I’d love to talk. We’re actively meeting with founders, operators, and engineers circling these ideas.
Idea #3 - Rolled-Up Automation Strategies
The next wave of automation won’t just operate robots — it’ll run the businesses too.”
One trend I can’t stop thinking about lately: more automation companies are becoming their own customers. By owning deployment, they can debug tech in the wild, prove ROI, and feed real-world data back into their systems. Tesla and SpaceX are the classic examples who started with a novel technical architecture (batteries, propulsion), built full-stack products (EVs, rockets), and then fully verticalized into downstream markets (Electrification company, launch services). It’s a playbook that worked spectacularly for them, and we’re now seeing robotics startups apply it in fields like construction, advanced manufacturing, agriculture, and even hospitality.
What makes this moment so compelling is that these industries are still incredibly fragmented and under-digitized. Local service providers, regional factories, and small-scale farms all struggle with the same challenges: high labor costs, uneven quality, and thin margins. A verticalized automation company that not only builds the robots but also runs the service or acquires incumbents can start to unlock operating leverage, consolidate fragmented markets, and build defensibility around data and performance. Think of a roll-up model where you buy undervalued, analog businesses, layer in automation, and suddenly you’ve got scale, margin expansion, and a flywheel of real-world feedback that keeps the tech ahead.
Of course, this strategy isn’t without risk — CapEx is heavy, integration is messy, and maintenance in the field often proves harder than expected. But if executed well, the upside is enormous: higher multiples, stronger moats, and long-term control of value creation across the stack.
We’re planning to write a deeper thesis on this soon, but wanted to plant the flag here. If you’re building or thinking along similar lines, let’s talk — I think this playbook will define some of the biggest winners in reindustrialization over the next decade.
📬 Let’s Connect
That’s all for August.. Short note, but wanted to plant the flag if you are thinking about any of these categories let’s please get in touch! We would love to be a thought partner, financial partner, or simply friend.
Got something else you're working on?
We’re always eager to meet great founders and collaborators. Don’t be a stranger.
Cheers,
— Brannon & Abe
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