Jack Selby of Thiel Capital Acquires Interests in Promising Startups like Etched via Arizona Ties

This week, competitor Etched, which challenges Nvidia, revealed that TSMC has produced its inaugural chip earlier this year. The four-year-old startup, valued at $5 billion, is preparing to deliver systems incorporating this chip to clients later this summer. However, scaling up production could be a hurdle, as Etched must vie for the limited output capacity at TSMC’s facilities in Taiwan.

Copper Sky Capital, an early investor in Etched, expresses optimism that the company will navigate these manufacturing challenges by eventually enabling chip production at TSMC’s Arizona plant. When the venture capital firm invested $120 million in Etched’s Series A funding round two years ago, founder Jack Selby was able to secure an allocation partly by promising to assist in relocating chip fabrication to Arizona.

Selby, a former executive at PayPal and a long-time managing director at Thiel Capital, established Copper Sky in Phoenix in 2021 (previously known as AZ-VC). The firm’s initial $115 million fund primarily targeted startups located in Arizona and the Southwest. Selby believes that many startups on the coasts, particularly those in California, Massachusetts, and New York, are significantly overvalued compared to emerging companies in his region. Nonetheless, he recognized an opportunity to help California hardware startups move their manufacturing to Arizona.

Selby attributes Copper Sky’s investment in the otherwise hard-to-enter startup Etched to his prominent role within Arizona’s economic landscape. As a board member of the Arizona Commerce Authority, he plays a crucial part in attracting out-of-state businesses to establish manufacturing in the area.

“When Copper Sky invested in Etched, they were well aware of our connections to the Arizona semiconductor sector, especially with the local TSMC GIGAFAB,” Selby stated.

While Copper Sky has recently broadened its focus beyond the Southwest to include innovative venture hubs nationwide, Selby indicated that the firm continues to pursue investments in hardware companies, including those in the defense sector, that can set up production facilities in Arizona.

The firm is on track to enhance its capital for investment in these higher-valued coastal firms and others across the United States. Currently, Copper Sky is in the process of raising a $300 million second fund, as revealed in a regulatory filing.