Matter Venture Partners Raises $300M First Fund To Invest In 'Hard Tech' | Tech Crunch

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Wen Hsieh and Haomiao Huang, both Kleiner Perkins investors, left the firm in 2023 to start their own venture capital fund called Matter Venture Partners. The firm has backing from Kleiner and Taiwanese chipmaker TSMC.

Hsieh is the longest serving KPer, having been there for 17 years; Huang stayed there for four years. Passionate about what they call “hard tech,” HC has invested in companies such as Luxview, a microscreen technology company that Apple bought, and Amprius, a maker of high-energy-density lithium-ion batteries. Huang has invested in drone maker DJI and 3D printing company Desktop Metal, which went public through a SPAC in 2020.

On Thursday, they announced the closing of a $300 million seed fund. Hsi told TechCrunch that it is expected to be one of the largest “first funds” raised in 2023. Medium venture fund Nearly $37 million was raised that year, according to a PitchBook-NVCA Venture Monitor report.

Matter Venture Partners is going for an initial $200 million fund, and Hsieh acknowledges that “it's a tough time for everyone,” be it startups or venture capitalists, to raise money in 2023.

“We went into it anticipating such difficulty and had very modest expectations,” Hsieh said. “But to our surprise, it went well for us. We closed $300 million last year, in total, and were significantly oversubscribed.

Knowing when to say “when”.

Figuring out the best amount to close a fund can be like “Goldilocks,” Hsieh said. Matter Venture Partners invests in large seed rounds, Series A and Series B.

Wen Hsieh, co-founder of Matter Venture Partners (Image credit: Matter Venture Partners)

If a fund is undercapitalized, it may not be able to compete in deals or support portfolio companies in multiple rounds, he explained. Overcapitalized and may have too much money to deploy over a two- or three-year lifetime fund cycle. It may also lead to writing very large checks or check sizes for adequate fundraising.

He opined that the oversubscription was due to the focus of the Matter Venture partner on hard tech. “The world is realizing that many of the foundational technologies and trends in our society today are built on hard tech,” he says. “It really puts the wind behind us. We've come out successful and unscathed in a very positive way and we're very lucky to have raised the money during a difficult time.

In addition to Kleiner LP and TSMC, individuals, entrepreneurs and family offices also support the fund. Hsieh and Huang are also LPs at the fund, along with John Budd, who joins them on the investment team.

Influencing Operating Partners

Matter venture partners offer a unique aspect of having operating partners, which HC said is usually only available to larger firms. One is Mel Tang, former CFO of video doorbell company Ring, which was later acquired by Amazon.

Tang has experience in operations, supply chain management and manufacturing unit economics, and Hsieh believes that having such expertise early in the life of a hard tech startup is a good value-add.

On how Matter Venture Partners works with founders, HC says partners pride themselves on being company builders, but not at the expense of getting in the way of founders. They like to be coaches, partners and jump in where appropriate.

All about hard tech

Haomiao Huang, Matter Venture Partners

Hayomio Huang, co-founder of Matter Venture Partners (Image credit: Matter Venture Partners)

They put “hard tech” into six buckets: semiconductors, automation and robotization, generative AI, manufacturing onshoring and offshoring, energy building blocks, and life science.

“The common theme for these six areas is that we want to invest in the next 'picks and shovels' for all six of these trends,” Hsieh said. “Many gold rushes are going on, but we want to provide 'picks and shovels' for every occasion. We want to fund them and the entrepreneurs who contribute to these new innovations.

To date, Matter Venture Partners has invested in six companies. It also doubled down on some from the pair's cleaner Perkins days, including Ambiq Micro, which Hsieh described as a company “a key player in edge AI,” the concept of making AI workloads easier to implement.

“It's about low energy,” he said. “The big debate is how much energy it consumes for inference or how much energy it consumes for training. Ambik is a world leader in manufacturing ultra-low powered chips. They dominated wearables and now they are turning it into edge AI applications. The product is making a huge impact and we are riding a new wave of energy-efficient AI awareness.

Ultimately, Matter Venture Partners will invest in between 15 and 20 companies with the new fund, Hsi said.

(TagsToTranslate)Haomiao Huang

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