Looking To Go Long On Deep Tech, Lux Capital Announces Nearly $1.5B In New Funds

Lux Capital has closed a $675 million early-stage venture fund and an $800 million “opportunities” fund that will help support what the firm sees as the most promising deep tech companies.

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With offices in both New York and Menlo Park, California, Lux was founded in 2000 and focuses on deep or frontier technologies, ranging from robotics and autonomous vehicles to innovations in health care regarding surgeries and drug development.

“We’ve always believed that true innovation happens at the intersection of scientific disciplines,” said Peter Hebert, co-founder and director of Lux. “We look at the collision of areas that previously had not collided.”

New funds

With the closing of the two new funds, Lux now manages $4 billion in committed capital and has about 170 active investments, Hebert said. Just in April, portfolio company Recursion Pharmaceuticals went public through a traditional IPO, and thus far this year another half dozen investments — such as Latch, Matterport and Evolv — have announced their intentions to go via SPACs.

The new $675 million early-stage fund — Lux Ventures VII — will focus on seed and early-round financings, with a median investment in about 20 to 25 companies being around $25 million, Hebert said.

And the new $800 million Lux Total Opportunities fund will look to push growth and expansion in what the firm decides are the most promising companies — which can include companies in which Lux has no previous investment, he said.

For that fund, Lux will focus on maturing companies where risk has been lessened, and valuations likely in the “hundreds of millions to billions of dollars” range, he said. The fund will support what probably will be “a handful” of inventions that could be around $100 million on average, he added.

Since the firm’s inception, Lux has invested in more than 200 companies, with its first early-stage fund closing at $10 million two decades ago. Hebert said the larger funds the firm now has make sense in the field of deep tech where development and a company’s life cycle can take much longer than in internet and software.

“In gambling terms, there’s a much larger ante,” he said. “It makes sense we have the wherewithal to support such a company.”

Illustration: Li-Anne Dias.

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