Thiel Capital’s Jack Selby uses Arizona ties to invest in hot startups
▼ Summary
– Etched announced that TSMC manufactured its first chip earlier this year, but scaling production is challenging due to limited capacity at TSMC’s Taiwan factories.
– Copper Sky Capital, an early investor in Etched, hopes the startup can eventually manufacture chips at TSMC’s Arizona facility.
– Copper Sky founder Jack Selby secured an allocation in Etched’s $120 million Series A by promising to help reshore chip fabrication to Arizona.
– Selby founded Copper Sky in 2021 to invest in Southwest startups, seeing them as less overpriced than coastal companies, and to help hardware startups move production to Arizona.
– Copper Sky is raising a $300 million second fund to expand investments beyond the Southwest, including in defense-sector hardware companies that could manufacture in Arizona.
Nvidia competitor Etched announced this week that TSMC had manufactured its first chip earlier this year. The four-year-old startup, valued at $5 billion, is preparing to ship systems powered by that chip to customers later this summer. But scaling production may prove difficult. Like other chip designers, Etched must compete for limited capacity at TSMC’s factories in Taiwan.
Copper Sky Capital, an early investor in Etched, is optimistic the chip maker can overcome its manufacturing hurdles by eventually producing chips at TSMC’s Arizona facility. When the four-year-old venture capital firm invested in Etched’s $120 million Series A two years ago, founder Jack Selby secured an allocation partly by promising to help the startup eventually reshore its chip fabrication to Arizona.
Selby, a former PayPal executive and longtime managing director for Peter Thiel’s family office, Thiel Capital, founded Phoenix-based Copper Sky in 2021, originally known as AZ-VC. The firm’s first $115 million fund focused mainly on startups based in Arizona and the Southwest. Selby’s core thesis: most coastal startups, especially those in California, Massachusetts, and New York, are grossly overpriced compared to companies emerging in his region. However, he saw an opportunity to bridge the gap in the other direction by helping California-based hardware startups move their production to Arizona.
Selby attributes Copper Sky’s investment in Etched , a startup that is otherwise difficult to access , to his influential role in Arizona’s economy. As a board member of the Arizona Commerce Authority, he is heavily involved in recruiting out-of-state businesses to establish manufacturing operations in the region.
“When Copper Sky invested with Etched, the company clearly understood our connectivity to the Arizona semiconductor industry, and in particular the local TSMC GIGAFAB,” Selby told TechCrunch.
Although Copper Sky has recently expanded its focus beyond the Southwest to include non-traditional venture hubs across the country, Selby said the firm is also interested in backing hardware companies, including those in the defense sector, that can set up manufacturing operations in Arizona.
The firm is expected to soon have more capital to invest in those higher-priced coastal companies and others throughout the United States. According to a regulatory filing, Copper Sky is currently raising a $300 million second fund.
(Source: TechCrunch)