via TechCrunch
How Thiel Capital’s Jack Selby Nabs Stakes in Hot Startups Like Etched Through Arizona Connections
Nvidia competitor Etched announced this week that TSMC had manufactured its first chip earlier this year. While the four-year-old startup, now valued at $5 billion, prepares to ship systems powered by that chip to customers later this summer, scaling production may prove difficult. As with other chip designers, Etched must compete for limited capacity at TSMC’s Taiwan factories.
Copper Sky Capital, an early investor in Etched, is optimistic that the chipmaker will resolve its manufacturing constraints by eventually producing chips at TSMC’s Arizona facility. When the four-year-old venture firm invested in Etched’s $120 million Series A two years ago, founder Jack Selby secured a stake in part by promising to help the startup eventually reshore its chip fabrication to Arizona.
Selby, a former PayPal executive and longtime managing director of Peter Thiel’s family office, Thiel Capital, founded Phoenix-based Copper Sky in 2021 (formerly known as AZ-VC). The firm’s first $115 million fund focused primarily on startups based in Arizona and the Southwest. Selby’s thesis was that most coastal startups—particularly those in California, Massachusetts, and New York—are grossly overpriced compared to companies emerging in his region. However, he saw an opportunity to bridge the gap in the other direction: helping California-based hardware startups move their production to Arizona.
Selby credits Copper Sky’s investment in Etched—an otherwise hard-to-access startup—to his influential role in Arizona’s economy. As a board member of the Arizona Commerce Authority, Selby is deeply involved in recruiting out-of-state businesses to set up manufacturing operations in the region.
“When Copper Sky invested in Etched, the company clearly understood our connectivity to the Arizona semiconductor industry, and in particular the local TSMC GIGAFAB,” Selby told TechCrunch.
While Copper Sky has recently expanded its focus beyond the Southwest to include non-traditional venture hubs nationwide, Selby said the firm is also interested in backing hardware companies—including those in the defense sector—that can establish manufacturing operations in Arizona.
The firm is expected to soon have more capital to invest in those higher-priced coastal companies and others across the United States. Copper Sky is currently raising a $300 million second fund, according to a regulatory filing.