Why We’re Backing Heliux

Heliux aims to rebuild the manufacturing stack one module at a time (PLM → ERP → MES), eventually becoming an all-in-one, AI-powered enterprise operating system for manufacturers.  

A recent McKinsey Report noted that “in the United States, manufacturing accounts for $2.3 trillion in GDP, employs 12 million people, and supports hundreds of local economies. Although that represents just 11 percent of US GDP and 8 percent of direct employment, the sector makes a disproportionate economic contribution, including 20 percent of the nation’s capital investment, 35 percent of productivity growth, 60 percent of exports, and 70 percent of business R&D spending.”

Manufacturing is big in this country and only accelerating. It is responsible for 55% of patents in the US, 8% of the US workforce, and a whopping 70% of R&D Spending. And it’s on the rise, with 1.3 million manufacturing jobs added to the economy between 2010 and 2019, following the loss of 5.8 million jobs over the previous ten years. The Bipartisan Infrastructure Law is set to pour billions into US manufacturing capacity over the next decade alone. Global conflicts (but particularly China’s increased antagonism and rising tensions over Taiwan) are only further encouraging manufacturers to re-shore operations. 

Manufacturers moving operations back to the US, or setting up shop for the first time, are far more digital than their corporate ancestors, eagerly adopting the technologies of “industry 4.0”. Innovation and new tech adoption is increasingly viewed as essential for beating out the competition. In a recent global survey, Rockwell Automation found that 2x as many respondents say they lack the technology to outpace the competition compared to last year. A third of manufacturers are hampered by ‘technology paralysis’ – an inability to decide between solutions, while simultaneously prioritizing digitization more than ever before. Similar to the case with altitude, the appetite for disruption is massive, and there is a new generation of companies starting up to meet the need. 

Manufacturers’ tech stacks are placing significant drag on the companies they are supposed to “serve.” The biggest sources of friction can be chunked out thusly: 

• Cost: The complexity of legacy software systems necessitates the use of 3rd party consulting firms (often multiple) which only further increases the cost of such systems (typically $1M+ for installation with additional charges for customizations). Even with the help of third parties, integrations can take over twelve months to complete. 

• Fragmentation: Manufacturing companies have no central system of record, often juggling 3+ disparate providers (consider the thousands of moving parts, millions of manual data transactions, and hundreds of thousands of hours spent connecting and updating data across platforms). 

• Technical Anachronisms: Most legacy providers have the same UI/UX they had in the 90s and require hundreds of human operators with little to no internal automation (leading to copious data entry errors). 

These headaches have led many within manufacturing to conclude that an ideal system synchronizes and communicates perfectly across each module–the ideal system is a bundled one. Building that full-stack OS is Heliux’s mission. 

Heliux CEO and founder, Alex Craig, comes from industry and has a unique clarity of vision. His journey began about a decade ago when he was an intern in a manufacturing environment in Grand Rapids, Michigan. He encountered legacy platforms (PLM (Product Lifecycle Management), ERP (Enterprise Resource Planning), and MES (Manufacturing Execution System)), which he found to be non-intuitive and frustrating to use.

From the internship a decade ago to his more recent experience at Relativity Space, a modern venture-backed company, the experience hadn't improved - outdated, fragmented engineering and manufacturing software continues to constrain one of our most important economic sectors. This frustration (and a clear lack of viable alternatives) led him to start Heliux.

We’re incredibly excited to watch the Heliux team charge after existing, and new, opportunities in the space. LA alone has seen an explosion in Aerospace and Manufacturing funding over past years. Isolating Seed funding is fascinating—the first half of 2020 saw just 5 hardware deals done in LA, with ~$12M allocated. Compare that with 1H 2022 and it gets pretty insane. 1H 22’ saw $63M deployed across 15 companies (and 2H 22’ saw 12 companies funded and ~$49M deployed). Hardware numbers held steady into the first half of this year, but the percentage of aerospace companies alone doubled YoY. Not to mention, investors are getting increasingly comfortable funding sci-fi-esque deals that –shocker–require a lot of proprietary hardware to be manufactured (think robotics, climate, defense, etc.).

Generational atoms companies are going to need commensurately adept bits platforms. 

In late 2023, the team closed on $2M from Amplify.LA, New Stack Ventures, Crosscut Ventures, Lux Capital, Countdown Capital, and Strategic Angels. 

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