Venture firm Material Impact, which focuses on investing in materials innovation, raised $200 million for a second fund as more money flows to deep tech, a shift that had begun before the coronavirus pandemic and has continued over the past few months.
“Pandemic aside, it was the perfect time to raise funds,” says Material Impact cofounder Carmichael Roberts.
Material Impact’s first $110 million fund has invested in 11 startups to date, many of which were created from academic research and spun out of universities, including Harvard, MIT, Arizona State and Case Western.
With the new fund, Roberts and his cofounder Adam Sharkawy plan to maintain the same investment strategy, but figure they’ll be able to write larger checks to a similar number of companies as from their first fund.
Before even starting Material Impact, Roberts recalls, “We were tag-teaming this on weekends and weekday nights.” Today, Soft Robotics has raised a total of $54 million at a valuation of $115 million, according to venture-capital database PitchBook.
In researching water, for example, Material Impact invested not just in Zero Water, but also in Infinite Cooling, an MIT spinout that uses technology to capture and recycle water plumes leaving industrial cooling towers, and Fusion Coolant Systems, a University of Michigan spinout that developed a carbon dioxide lubrication system for use in factory machining operations that can eliminate wastewater.
Five years ago, Roberts says, “The question wasn’t about competition, it was about companies. Who’s doing these things and can you tell us why it matters?” Today, deep tech, whether robotics or synthetic biology, is getting more of its due.