The Palo Alto firm thinks real-world industries will define the next decade of tech.
Silicon Valley investment firm Eclipse has raised $1.2 billion for two new funds, both dedicated to backing startups trying to modernize physical industries.
The funds bring the Palo Alto-based firm’s total assets under management to $4 billion, Eclipse announced Monday. One fund, worth $720 million and called Eclipse Fund V, will focus on young companies with an emphasis on manufacturing, supply chain, transportation and electrification businesses. The remainder of the money will go to Early Growth Fund II, which will back more mature companies.
“Some of the most amazing founders in the market right now want to be Elon Musk,” Eclipse Founding Partner Lior Susan said in an interview on Bloomberg Television on Monday. “They want to build cars, they want to build rockets, and they understand that the impact of technology can be much more superior in the physical world than what we’ve been trained in Silicon Valley.”
Eclipse is raising money at a tumultuous time for the venture capital industry, following both a slowdown in VC activity and a banking crisis. Venture-backed deals dropped in 2022 amid higher interest rates and macroeconomic concerns. Then last month, Silicon Valley Bank, a lender closely tied to VCs and startups, collapsed in the biggest bank failure since the financial crisis. The tech industry as a whole is facing new questions over its long-term growth and the viability of new businesses.
“The next decade in tech will be defined by companies focused on physical industries,” the firm said in a statement, citing “severe cracks in the foundation of our physical world.” Eclipse likened the opportunity to modernize real-world businesses to the boom in software-as-a-service companies in recent decades.
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