When Lior Susan started Eclipse Ventures in 2015, the firm’s thesis of digitizing the physical world wasn’t particularly popular in Silicon Valley.

“It was the era of enterprise software and SaaS, and it felt fairly lonely the first couple of years,” Susan said on stage at a recent StrictlyVC event in San Francisco.

More than a decade later, Eclipse finds itself at the center of the tech world’s action. The firm’s $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 per share, according to Eclipse.

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.

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.

“I think people understand that the real moat in software is gone. You can vibe code pretty much whatever you want,” he said.

Susan echoed public market sentiment that earlier this year sent many SaaS stocks tumbling on the belief that enterprises may use Anthropic’s Claude Code or OpenAI’s latest models to create their own bespoke software tools instead.

“What you cannot do with ‘vibe code’ is manufacture wafers, because you need machines and silicon, and they need clean rooms, and a bunch of other things,” Susan said.

When it comes to the tech that touches the physical world, it’s not just semiconductors that are suddenly catching the attention of investors and founders.

Eclipse’s 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.

Indeed, the recent follow-on rounds across Eclipse’s 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, $650 million for True Anomaly, $270 million for Bedrock Robotics, and $200 million for Oxide Computer. What’s more, Eclipse was the Series A investor for all four companies.

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’s power to finally make robotics viable. However, Susan argues that there are other powerful tailwinds driving the momentum.

Besides technology — in this case, AI — what’s 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.

“This is the first time I believe in America ever, from Henry Ford and Carnegie, those five forces are aligned,” Susan said. “For builders like us, this is the best time to build those companies.”

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