Hardware Club announced today that it has raised its first venture fund, a $28 million pool that will be used to back seed-stage startups coming out of its community platform. Launched almost three years ago and originally based in Paris, Hardware Club also has offices in San Francisco and Tokyo.
Hardware Club first built a networked community of hardware startups that can help each other. It then brings in large partners — like Foxconn for manufacturing and distributors like Amazon and Target — to help club members with every facet of development.
More recently, Hardware Club has tiptoed into the venture capital side of things. As of last December, it had written 10 seed funding checks for $100,000. With the new fund, Hardware Club will now be structured as a VC firm, with the ability to invest up to $1.5 million in a startup, though average deal size is more likely to be around $500,000.
“Our goal was always to build a new venture capital approach,” said cofounder Barbara Belvisi. “There is a community in terms of how we can help startups and how we can make them succeed.”
Belvisi started Hardware Club with Alexis Houssou, and Jerry Yang joined as a general partner. Institutional investors in the fund include Bpifrance, Credit Mutuel Arkéa, Foxconn, and Mistletoe, among others.
Hardware Club plans to target 10 to 15 companies over the next three years. Among its areas of interest are digital health, artificial intelligence, new sensors, connected buildings, smart transportation, and consumer hardware.
According to the firm’s stats, its community now includes 260 startups from over 30 countries. Member companies have gone on to raise more than $700 million in venture capital, and another $80 million in crowdfunding campaigns.
Despite the ups and downs hardware startups have experienced in recent years, Belvisi said she remains convinced the sector is going to experience massive innovation and disruption in the coming years. The new fund will help Hardware Club take its best startups farther, while also offering the potential for better returns that will allow it to continue to expand its reach.
“Every industrial revolution that has hit humanity, there has always been a hardware component,” she said. “We are investing in startups that are building the new industrial revolution with drones and robots. They’re going to bring human civilization to the next level.”
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