Eclipse Ventures has emerged as a major player in tech investment, exemplified by its recent $2.5 billion return from Cerebras Systems. This impressive success, stemming from a $6.5 million investment made in 2016, underscores a notable shift in the tech sector’s focus—one that aligns closely with the firm’s long-standing belief in the potential of digitizing the physical world.
When Lior Susan founded Eclipse Ventures in 2015, the idea of investing in hardware and physical technologies faced skepticism. At that time, the tech narrative was dominated by enterprise software and SaaS models, leaving Susan to navigate what he described as a “lonely” environment during the firm’s early days. Fast forward a decade, and public market trends show a growing recognition of the importance of physical-world technology, a shift that Eclipse is well-positioned to take advantage of.
The IPO of Cerebras, which priced shares at $185, has reinforced the firm’s strategy. Over the years, Eclipse committed a total of $147 million to Cerebras, yielding a remarkable seventeenfold return. Susan believes this windfall is just the beginning. "Because 85% of global GDP is tied to the physical world, investing in companies beyond pure software could be immensely lucrative," he stated.
The Changing Sentiment Towards Hardware
Recent market trends indicate that investors are increasingly valuing companies that integrate hardware and software. Notably, shares of tech giants like TSMC and Micron have reached all-time highs, reinforcing the notion that the sector is evolving. Susan highlighted that a new generation of startup founders is keen to explore opportunities at this intersection, where tangible products meet advanced algorithms.
This sentiment is particularly evident following the decline in SaaS stock prices. Many analysts attribute this downturn to the belief that companies can now use advanced AI models, such as those from Anthropic and OpenAI, to develop custom software solutions independently. “I think people understand that the real moat in software is gone. You can vibe-code pretty much whatever you want,” Susan noted, reflecting a broader industry perspective.
However, he contends that not everything can be distilled into software. Manufacturing processes, such as wafer production, require significant infrastructure, clean rooms, and specialized machinery. This distinction emphasizes the value of investing in physical-world technologies, which cannot simply be replicated through software alone.
Momentum in Physical-World Investments
Eclipse’s broader portfolio strategy has also begun to yield results. In the past year, its companies across various sectors, including robotics and energy, raised nearly $15 billion from external investors. This momentum starkly contrasts with the firm’s early days, when total funding for its portfolio was below $4 billion in the first eight years.
Investors are increasingly recognizing the potential of technologies that engage directly with the physical world. For example, the firm reported an impressive $4.5 billion in late-stage funding in just the first quarter of 2026, indicating strong investor appetite for companies that can deliver tangible innovations.
Future Prospects
As the tech landscape continues to change, Eclipse Ventures is strategically positioned to lead in physical-world technology. The firm’s successful investment in Cerebras represents not just a financial triumph but a validation of its long-term vision. As Susan remarked, “This is the first time I believe in America ever, from Henry Ford and Carnegie, those five forces are aligned.” The ongoing interest in physical-world tech suggests that Eclipse's future could be as bright as its past successes, paving the way for new innovations that blend the digital and physical realms.
