Innovation Endeavors joins other venture capital firms such as Thomvest Ventures and Myriad Venture Partners in announcing a new fund. This is the firm’s fifth fund and $630 million in capital commitments — the firm’s largest fund to date.
Eric Schmidt, the former CEO of Google, started the company in 2010 with Dror Berman, Scott Brady and Rick Scalon to invest in the intersection of science and technology. Think climate, smart software, engineering health and supply chain.
The firm plans to deploy capital to between 30 and 35 companies with this new fund, though it has yet to make an investment, Berman told TechCrunch.
Over the past 14 years, the firm has invested in more than 70 companies, 12 of which have exited, including SoFi, Uber, Astra, Slice and Zymergen. Some recent pioneering investments include Machina Labs, an engineering and industrial engineering and manufacturing company, and BioLoomics, a biotech company developing antibodies for cancer treatments.
TechCrunch spoke with Berman and Brady about the new fund, the evolution of Innovation Endeavors, and how a diverse talent pool will be a requirement for the next generation of startups.
The following has been edited for length and clarity.
TechCrunch: How has Innovation Endeavors grown over the past two decades?
Berman: After starting the company, Eric Schmidt and I spent a lot of time thinking about the future, what’s next, and how we could really leverage technology to solve really hard problems that we predicted were already going to get worse. in the coming decades.
We recognized that there were some technologies that were emerging and converging to essentially allow us to solve these problems—industries that didn’t benefit from technology—anchored in the physical world or the biological world. Think manufacturing, the supply chain space, to climate change, drug discovery and development, healthcare and so on. But also to think horizontally about all the new technologies that would emerge during this time period. Even companies that wouldn’t necessarily be trying to sell technologies.
We spent a lot of time building this brand, but also constantly thinking about how to become the partner of choice for these types of entrepreneurs. It would be a different type of startup and a different type of playbook. Over the past 14 years, we’ve worked with entrepreneurs who defined many of these industries I mentioned and are building massive companies in these spaces. This has allowed us to continue to grow and launch several funds during this time period.
You are now launching Fund V, which is your largest. Why now?
Berman: It’s probably the most interesting and exciting time to be building new companies. If you think about the next decade, we have seen a rapid pace of technology. It’s obviously been evolving over the last few decades, but more so in the last few years.
The whole world has been familiar with AI and what is possible with genetic AI ever since OpenAI went public. Similar to what will follow in quantum computing, robotics, sensing and so on. We believe we are just at the beginning of an incredible era where many of these technologies will continue to develop.
We’ve decided to raise a slightly larger fund than we’ve done in the past to be able to support these companies in what I think of as a growing or growing set of depth that exists in these integral stages.
How active is Eric Scmidt these days?
Berman: It helps us with various things. We have many entrepreneurs who want to talk to him to promote their work or with strategic help. The way to help entrepreneurs is his superpower.
We hold monthly sessions and bring in a few companies to spend 30 minutes to an hour with Eric. He does an amazing job and he can dive deep very quickly to really understand what’s going on, analyze it, and then come back with a unique set of insights that really helps these companies think differently about these challenges. It’s very different from what I hear in the boardrooms of Silicon Valley.
What are some of the technologies and industries that have caught your attention in the last couple of years?
Scott Brady: We look broadly at the physical economy, which is energy, climate, infrastructure and materials. These represent the majority of GDP. Each of them individually has huge opportunities. Data-driven, we also think about the impact of automation and other technologies.
Another part of the fund focuses on life sciences thinking about applying these technologies to things like new therapeutics or diagnostics. We look at what is possible today that wasn’t in the past and how we can improve people’s quality of life.
The third is looking across the board at these key technologies and how they will be applied to these industries and trying to create that basic infrastructure—the tools that allow the engineers and scientists in those industries to bring about that disruption.
What will it take to bring many of these technologies to market?
Brady: The technologies are pretty broad and I would say some of the interesting things we’re seeing are, generally if you did your Ph.D. more than five years ago, you are not really up to date on many of these technologies. A whole generation of scientists and engineers has to learn a new set of capabilities, and then a really ambitious set of new talent comes into the market that can be the expert in those technologies. It’s an interesting confluence of talent and technology and opportunity that we’re excited about.
How do you look for investments?
Brady: The approach we took is probably slightly different than a lot of other companies. As mentioned, the emerging nature of technology is very talent-driven, and much of that talent comes from industry or academia. A lot of our work is very thesis oriented. We don’t just observe what comes to us, we actually try to actively meet talent, many times, long before a company is formed.
We started in some cases, two years ago, sitting in the research labs to understand the technology, who’s working in that area, and learning when they break away to do something interesting. It’s really a relationship funnel that we’ve been cultivating for a long time.
You said you haven’t invested yet from this new fund, however, what kind of pipeline will you be doing?
Berman: We were fortunate enough to have enough capital to continue investing seamlessly, so we raised this capital before we even completed the previous one. It allows us to continue to be very active now and invest. It gives us more time to build relationships with entrepreneurs and really get to know them. When the time is right when they are ready to launch the company or raise the next round, we are there to support them.
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