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When Lior Susan started Eclipse Ventures<\/a> in 2015, the firm\u2019s thesis of digitizing the physical world wasn\u2019t particularly popular in Silicon Valley.<\/p>\n \u201cIt was the era of enterprise software and SaaS, and it felt fairly lonely the first couple of years,\u201d Susan said on stage at a recent StrictlyVC event in San Francisco.<\/p>\n More than a decade later, Eclipse finds itself at the center of the tech world\u2019s action. The firm\u2019s $6.5 million Series A investment in Cerebras Systems in 2016 paved the way for a total return of $2.5 billion when the semiconductor company went public this week. The firm invested a total of $147 million in Cerebras over time, a bet that generated a 17-fold return at the IPO price of $185<\/a> per share, according to Eclipse.<\/p>\n For Susan, the windfall from Cerebras is only the beginning of reaping big rewards from a longstanding belief that because 85% of global GDP is tied to the physical world, investing in companies beyond pure software could be immensely lucrative.<\/p>\n Public markets and startup founders seem to be recognizing the value of physical-world tech now, too. Susan noted that shares of TSMC and Micron recently hit all-time highs, while a growing cohort of elite founders are eager to build startups at the intersection of hardware and software.<\/p>\n \u201cI think people understand that the real moat in software is gone. You can vibe code pretty much whatever you want,\u201d he said.<\/p>\n Susan echoed public market sentiment that earlier this year sent many SaaS stocks tumbling on the belief that enterprises may use Anthropic\u2019s Claude Code or OpenAI\u2019s latest models to create their own bespoke software tools instead.<\/p>\n \u201cWhat you cannot do with \u2018vibe code\u2019 is manufacture wafers, because you need machines and silicon, and they need clean rooms, and a bunch of other things,\u201d Susan said.<\/p>\n When it comes to the tech that touches the physical world, it\u2019s not just semiconductors that are suddenly catching the attention of investors and founders.<\/p>\n Eclipse\u2019s portfolio companies spanning sectors like robotics, energy and defense, raised nearly $15 billion from outside backers last year, and that late-stage momentum reached $4.5 billion in Q1 2026 alone, Susan said. That investor excitement stands in stark contrast to the firm’s early track record: in its first eight years, its portfolio companies raised less than $4 billion in total.<\/p>\n Indeed, the recent follow-on rounds across Eclipse\u2019s portfolio show a track record that any venture firm would envy. Driven by a string of massive late-stage deals this year, the haul includes $1.2 billion for Wayve<\/a>, $650 million for True Anomaly, $270 million for Bedrock Robotics, and $200 million for Oxide Computer. What\u2019s more, Eclipse was the Series A investor for all four companies.<\/p>\n At first glance, it may seem that investor enthusiasm for physical-world tech is driven purely by AI, whether as an infrastructure input like chips and data centers, or through AI\u2019s power to finally make robotics viable. However, Susan argues that there are other powerful tailwinds driving the momentum.<\/p>\n Besides technology \u2014 in this case, AI \u2014 what\u2019s important for this market to thrive is capital, customer demand, talent, and policy. Susan means that along with investors and engineers moving away from SaaS to sectors like robotics, semiconductors, space, and mining, the U.S. government is also encouraging these industries through subsidies and favorable regulation.<\/p>\n \u201cThis is the first time I believe in America ever, from Henry Ford and Carnegie, those five forces are aligned,\u201d Susan said. \u201cFor builders like us, this is the best time to build those companies.\u201d<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n