Bolt Goes Bigger, Raises $80M for Third Early-Stage Hardware Fund

Bolt just raised over $80 million for its third venture fund, its largest to date. But the hardware investor and manufacturing consultant says it remains committed to backing early-stage startups that sometimes struggle to secure capital and other support.

Bolt announced the new fund Wednesday in a blog post. An SEC filing indicates the firm raised $80.3 million for this fund. Bolt launched in 2013 in Boston with a $3.5 million fund, then raised a $32 million fund in 2015 and added a second location in San Francisco. (Bolt also has a New York office.)

Raising larger subsequent funds is a familiar path in the venture capital industry, and one that can change the investing calculus—to the detriment of startups, some investors argue. But Bolt insists it’s not abandoning its roots.

Ben Einstein

“Over time, small seed funds are incentivized to raise larger funds, leading them to invest in later-stage companies and act more like traditional VCs,” wrote Ben Einstein, Bolt founder and general partner, in Wednesday’s blog post. Bolt’s partners “reject this path and will stay true to the founding conviction of Bolt.”

That means the firm is “doubling down on pre-seed investments and focusing where our value is highest: pre-product, pre-revenue companies that sit at the intersection of hardware and software,” Einstein wrote. The plan is to raise $80 million for subsequent Bolt funds, he added.

The ability of Bolt to raise more money speaks to the growing interest among entrepreneurs and investors in software-enabled hardware products, from the explosion of connected consumer devices to robotics and artificial intelligence technologies.

Einstein, who has a product design and development background, started Bolt because he saw fewer resources available for pure software businesses than hardware makers. Bolt provides its portfolio companies with money, office space with equipment for making prototypes, access to an in-house staff of engineers and industrial designers, and connections to manufacturers and other partners.

Bolt certainly isn’t the only firm that sees an opportunity here. There are plenty of organizations running hardware accelerators or some variation of the model. Some of them have a lot more resources than Bolt. Playground, for example, runs a hardware design studio in Palo Alto, CA, and has a $300 million venture fund. Playground’s co-founder is Android co-founder Andy Rubin, who is leading a new startup, Essential Products, that just announced plans to release a smartphone and a smart-home device.

Ultimately, of course, the longevity of Bolt and its competitors will depend on whether they make smart bets that pay off. Bolt currently has 40 companies in its portfolio, including Desktop Metal, a well-funded metal 3D printing startup; Kuvée, maker of a smart wine bottle; and Tank Utility, which makes a device and accompanying mobile app for monitoring fuel tanks. Einstein hasn’t responded to an e-mailed question about the outcomes of Bolt’s investments thus far. (We couldn’t find any exits in a quick scan of the firm’s investments.)

This year, former Sequoia Capital partner Greg McAdoo joined Bolt as a general partner, according to its website. McAdoo led Sequoia’s investments in Airbnb and Y Combinator, among others, and he previously held leadership roles at Cisco and Sentient Networks.

Axel Bichara, formerly of Atlas Venture, is Bolt’s third general partner. He’s one of Bolt’s original partners, along with Einstein and Scott Miller, the Dragon Innovation CEO and former iRobot executive. Miller is currently a Bolt venture partner, according to its website, but he has not been listed on the SEC filings for its second and third funds.

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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