The Rise of Physical-World Tech: Eclipse Ventures’ Bold Bet Pays Off
In the heart of Silicon Valley, where software-as-a-service (SaaS) once reigned supreme, Lior Susan and Eclipse Ventures embarked on a contrarian journey in 2015. At a time when enterprise software startups dominated venture capital portfolios, Eclipse dared to challenge the status quo by focusing on digitizing the physical world. Nearly a decade later, that audacious bet has proven transformative—not just for Eclipse but for the broader tech ecosystem. The firm’s $6.5 million Series A investment in Cerebras Systems, a semiconductor company, has yielded a staggering $2.5 billion return following its recent IPO, marking a watershed moment for physical-world tech investments.
This milestone is more than just a financial win for Eclipse Ventures; it underscores a seismic shift in the tech industry’s priorities. As global markets increasingly recognize the value of blending hardware and software, Eclipse finds itself at the forefront of a movement reshaping industries ranging from robotics and energy to defense and semiconductors. With its portfolio companies raising nearly $15 billion in external funding last year alone—including $4.5 billion in the first quarter of 2026—the firm has solidified its position as a trailblazer in a sector once considered niche.
A Contrarian Vision in the Era of SaaS
When Lior Susan founded Eclipse Ventures in 2015, Silicon Valley was captivated by the allure of SaaS startups. These companies, which offered cloud-based software solutions, were celebrated for their scalability, low capital requirements, and rapid growth potential. Against this backdrop, Eclipse’s thesis—investing in companies that bridge the digital and physical worlds—seemed almost out of place. “It was the era of enterprise software and SaaS, and it felt fairly lonely the first couple of years,” Susan recalled during a recent StrictlyVC event in San Francisco.
Eclipse’s early investments were met with skepticism. The firm’s focus on sectors like robotics, manufacturing, and semiconductors was seen as capital-intensive and slow-moving compared to the meteoric rise of SaaS giants. However, Susan remained steadfast in his conviction that 85% of global GDP is tied to the physical world, presenting immense opportunities for innovation.
This belief bore fruit with Cerebras Systems, a semiconductor company specializing in artificial intelligence (AI) hardware. Eclipse’s $6.5 million Series A investment in 2016 grew to a total commitment of $147 million over time. When Cerebras went public earlier this month at $185 per share, Eclipse’s stake was valued at $2.5 billion—a 17-fold return on investment.
The Winds of Change: Physical-World Tech Gains Momentum
Cerebras’ IPO is emblematic of a broader trend: the growing recognition of physical-world tech’s potential. Public markets have taken notice, with shares of semiconductor giants like TSMC and Micron hitting all-time highs this year. Meanwhile, a new generation of elite founders is gravitating toward startups that combine hardware and software, signaling a departure from the SaaS-dominated landscape of the past.
Susan attributes this shift to several factors. First, the competitive moat in pure software has eroded. “You can vibe code pretty much whatever you want,” he noted, referencing the proliferation of AI tools like OpenAI’s latest models and Anthropic’s Claude Code, which enable enterprises to develop bespoke software solutions with ease. However, he emphasized that the same cannot be said for physical-world technologies. “What you cannot do with ‘vibe code’ is manufacture wafers, because you need machines and silicon, and they need clean rooms, and a bunch of other things,” he said.
Second, advancements in AI have unlocked new possibilities for industries once considered labor-intensive or capital-prohibitive. Robotics, for instance, is becoming increasingly viable as AI-powered systems enhance precision and efficiency. Similarly, sectors like space exploration, energy, and mining are benefiting from innovations that blend hardware with intelligent software systems.
A Portfolio Built for the Future
Eclipse Ventures’ success extends beyond Cerebras. The firm’s portfolio companies—spanning robotics, energy, defense, and more—raised nearly $15 billion in external funding last year, a figure that dwarfs the less than $4 billion raised in its first eight years combined. This momentum has continued into 2026, with late-stage rounds totaling $4.5 billion in the first quarter alone.
Notable deals include Wayve, a self-driving technology startup that secured $1.2 billion from investors such as Nvidia and Uber; True Anomaly, a space-focused company that raised $650 million; Bedrock Robotics, which closed a $270 million round; and Oxide Computer, which garnered $200 million. Eclipse was the Series A investor for all four companies, underscoring its ability to identify transformative opportunities early.
The Perfect Storm: Tailwinds Driving Physical-World Tech
While AI is often cited as the primary driver of investor enthusiasm for physical-world tech, Susan points to a confluence of factors fueling this momentum. Beyond technological advancements, he highlights the importance of capital, customer demand, talent, and policy.
“This is the first time I believe in America ever, from Henry Ford and Carnegie, that those five forces are aligned,” Susan said. He noted that as investors and engineers pivot away from SaaS to industries like robotics, semiconductors, and space, the U.S. government is also playing a pivotal role through subsidies and favorable regulations. Initiatives such as the CHIPS and Science Act, which aims to boost domestic semiconductor manufacturing, exemplify this alignment.
For Susan, the present moment represents a golden opportunity for builders. “For builders like us, this is the best time to build those companies,” he declared.
A New Era for Tech Investments
Eclipse Ventures’ journey from outlier to industry leader reflects the evolving dynamics of tech investment. What began as a contrarian bet on the digitization of the physical world has blossomed into a thriving ecosystem of companies poised to redefine industries. As AI continues to revolutionize hardware and governments worldwide prioritize strategic sectors, Eclipse’s success serves as a testament to the enduring value of innovation that bridges the digital and physical realms.
While the firm’s windfall from Cerebras is a standout achievement, it is merely a chapter in a larger story—one that underscores the limitless potential of physical-world tech. As Susan and his team continue to invest in the builders of tomorrow, their story offers a compelling reminder that the future of technology lies not just in the code we write but in the tangible products we create. The question now is not whether physical-world tech will dominate the next decade, but how quickly and profoundly it will transform our world.
