Lux Capital ditches its opportunity fund in latest fundraise

Lux Capital, known for investing in life science and frontier tech startups, is back in the market to fundraise for its latest vehicle — but this time without a dedicated late-stage entity.

The firm is targeting over $1 billion for Lux Ventures VIII, according to meeting materials from the New Mexico State Investment Council (NM SIC) for March 28, which committed $62.5 million to the fund. The fund will combine the firm’s early and late-stage investing strategies into one pool.

The firm was founded in 2000 and has raised $4 billion across nine previous funds. Lux declined to comment on its fundraising efforts.

The fund will still invest in later-stage opportunities, but the firm’s founder and managing partner, Josh Wolfe, told the NM SIC that the fund will primarily invest at the early stage and will continue the firm’s thesis of investing at the intersection of sciences and tech.

The firm most recently raised a pair of funds in June 2021 that totaled nearly $1.5 billion. This included $675 million for early-stage focused Lux Ventures VII, and $800 million for Lux Total Opportunities Fund, a late-stage fund.

Lux is the latest firm with early-stage roots to ditch a dedicated late-stage fund given that the late-stage and exit environments have remained muted over the past year. Last month, Y Combinator said it would shut down its continuity fund, pulling back from late-stage investing and letting go of 20% of its team in one move.

Multiple firms, including Founders Fund and Vibe Capital, have either shrunk the size of their funds or given investors some of their capital back due to the softening market.

As 2023 rolls on, we expect to see more funds retreat to their traditional investing stage.