Eclipse Raises $510 Million For New Early Growth Fund Focused On Supply Chain

Calls to modernize and innovate the legacy industries involved in supply chains have been deafening this year as the fragile systems bottlenecked the delivery of basic household items since the start of the pandemic...and who could forget the drama at the Suez Canal back in May? Lior Susan knows the supply chain problems well and he’s been sounding the alarm for years. Susan, the founding partner of Eclipse, a venture firm that focuses on the digitization of said legacy industries, could see that transformation was on the horizon when he took a role at tech manufacturing company Flex in 2012. He was hired to build and run Lab IX, an incubation program for startups to meant to digitally transform Flex’s network of 150 factories globally and services their customers across industries including energy, industrial and automotive. He saw the writing on the wall. 

“I started getting an idea of where the world is going,” Susan tells Forbes. “I decided to go and share with [venture capitalists] what I was seeing in the field of supply chain and by and large I got the cold shoulder.” So he launched Eclipse in 2015 to help build and invest in the companies that play a role in this digitization which would transform analog data into a masterlist of actionable information cross-referencing every aspect of the supply chain. Susan compiled a team of operators from notable companies in their respective industries like Tesla, Microsoft, Samsara and others. Susan was right about the impending transformation. The market has grown so much since the firm’s founding that it is now announcing a new fund to add to its strategy. 

The Palo Alto-based firm raised $510 million for its first early growth fund, as originally reported in Midas Touch newsletter. This new fund will invest in Series B and Series C rounds into new companies for the firm as well as in follow-on rounds from the existing portfolio — something the firm was already doing through special purpose vehicles. “It’s also our first attempt to invite companies that we didn’t do in the early stage  — that are still great companies — to come and work with us because they still want our operating background,” he says. The fund compliments the firm’s main early-stage flagship fund which raised $500 million earlier this year and brings the firm’s AUM to $2.6 billion.  

The firm invests in the digitization of legacy industries including automotive, agriculture and manufacturing among others.“We live in the physical world, we don’t live in the online world,” Susan says. “Regardless of how excited you are about NFTs, they aren’t going to help my kids eat, live or grow food. My kids live in the physical world and that’s where we have been investing.” The firm has seen its strategy play out thus far garnering 11 exits including ecommerce fulfillment company 6 River Systems, which raised $46 million before being acquired by Shopify in 2019 for $450 million, and biotech Lucira Health, which went public at more than a $600 million valuation in 2021 after the firm participated in its $13.1 million Series A round in 2015. 

The past two years have really put the country’s aging supply chain front and center— and not just for the venture capital industry but also consumers. From the toilet paper famine of March 2020 to the semiconductor shortage still dragging on, the issues are permanently in the limelight. “Covid shows us we actually have a super fragile infrastructure,” Susan says. “We can’t be next to each other in a factory, we can’t deliver food to supermarkets, we can’t manufacture ventilators in this country anymore.” The signing of Biden’s infrastructure bill further hammers home the amount of change that is needed. Susan jokes that it's nice to see some validation on the firm’s original strategy from six and half years ago, but there is still a long road ahead.