Venture capital is constantly evolving, with new firms emerging to support the next wave of groundbreaking companies. One of the most notable new entrants is Matter Venture Partners, a venture capital firm founded by Wen Hsieh and Haomiao Huang, both formerly investors at the renowned Kleiner Perkins. In 2023, they embarked on their own venture, creating Matter Venture Partners with backing from Kleiner Perkins itself and TSMC, the Taiwanese semiconductor giant.
Hsieh brings an impressive 17-year tenure from Kleiner Perkins, while Huang contributed four years to the firm. Their shared passion lies in “hard tech,” a sector where Hsieh has a proven track record. His previous investments include companies like LuxVue (microLED display technology, acquired by Apple), Amprius (high-energy density lithium-ion batteries), DJI (drone technology), and Desktop Metal (3D printing, went public via SPAC). Huang and Hsieh have also collaborated on investments in companies such as Dexterity (robotics) and Lumafield (CT scanning).
Wen Hsieh co-founder of Matter Venture Partners, highlighting his leadership in the new hard tech focused venture capital fund.
This expertise and vision have quickly translated into significant success for Matter Venture Partners. They recently announced the successful closing of their inaugural fund, reaching an impressive $300 million. Wen Hsieh highlighted to TechCrunch that this is considered one of the largest first-time funds raised in 2023, especially when considering the median venture fund raised that year was approximately $37 million, according to a PitchBook-NVCA Venture Monitor report.
Initially targeting a $200 million fund, Matter Venture Partners exceeded expectations despite a challenging fundraising environment in 2023. Hsieh admitted the difficulties of the past year for both startups and VCs, stating, “We had gone into it anticipating such difficulty and had very modest expectations. But to our surprise, it went really well for us. We closed $300 million last year, in its entirety, and were significantly oversubscribed.”
The “Goldilocks” Approach to Fund Size
Determining the optimal fund size is a critical balancing act, likened to the “Goldilocks” principle by Hsieh. Matter Venture Partners focuses its investments on large seed rounds, Series A, and Series B stages. An undercapitalized fund risks being less competitive and unable to adequately support its portfolio companies through subsequent rounds. Conversely, an overcapitalized fund may face pressure to deploy capital too quickly, potentially leading to less strategic investments or overly large check sizes.
Hsieh believes Matter Venture Partners‘ focus on hard tech was a key factor in their oversubscription success. He explained, “The world has realized that most if not many of the foundational technologies and trends of our society today are built on hard tech. That really puts wind behind ourselves. We came out successful and unscathed in a very positive way, and we’re very lucky to have raised money at a tough time.” The fund’s backers include Kleiner Perkins, TSMC, along with individuals, entrepreneurs, and family offices. Notably, Hsieh, Huang, and operating partner Mel Tang are also LPs in the fund, demonstrating their commitment.
Leveraging Operating Expertise
A distinctive feature of Matter Venture Partners is their incorporation of operating partners, a resource typically found in larger firms. Mel Tang, former CFO of Ring (acquired by Amazon), is a key operating partner. Tang’s expertise in operations, supply chain management, and manufacturing unit economics provides significant value to early-stage hard tech startups. Hsieh emphasizes the importance of this operational guidance in the crucial early phases of company development.
In their approach to working with founders, Matter Venture Partners emphasizes a company-building philosophy, prioritizing a collaborative and supportive relationship. They aim to be coaches and partners, offering assistance where needed without overstepping or hindering the founders’ vision.
Haomiao Huang co-founder of Matter Venture Partners, emphasizing his expertise in venture investing within the hard technology sector.
Deep Dive into Hard Tech Sectors
Matter Venture Partners strategically focuses on “hard tech,” categorizing it into six key areas:
- Semiconductors Everywhere: Investing in advancements and applications of semiconductor technology.
- Robotization due to Blue-Collar Labor Shortage: Supporting automation and robotics solutions addressing labor challenges.
- Generative AI: Funding innovations within the rapidly evolving field of generative artificial intelligence.
- Manufacturing On-shoring and Friend-shoring: Investing in the resurgence of domestic manufacturing and strategic international partnerships.
- Energy Building Blocks: Supporting foundational technologies in the energy sector, including renewables and energy storage.
- Life Science Automation: Investing in automation technologies within the life sciences and biotechnology industries.
Hsieh describes their investment strategy as focusing on providing the “picks and shovels” for these major technological trends. “There are many gold rushes ongoing, but we would like to provide the ‘picks and shovels’ in every case. We like to fund them and entrepreneurs that contribute to these new innovations.”
Matter Venture Partners has already made six investments from the new fund, which are yet to be publicly disclosed. They have also continued to support companies from their Kleiner Perkins portfolio, including Ambiq Micro, a leader in ultra-low-power edge AI chips. Hsieh highlights Ambiq Micro as “a key player in edge AI,” crucial for energy-efficient AI applications, a growing area of focus in the tech industry.
With their $300 million fund, Matter Venture Partners plans to invest in 15 to 20 companies, poised to significantly impact the hard tech landscape and support the next generation of deep technology innovators.
