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San Francisco hardware incubator Lemnos Labs is looking to expand its portfolio of early-stage startups with a new $20 million venture capital fund it announced on Wednesday.
The firm anticipates making 10-12 investments a year of up to $250,000 for 10 percent equity. Founding partner Jeremy Conrad said Lemnos Labs will spend a year to a year and a half with each startup, with the goal of at least half of them reaching the Series A funding stage.
It’s not a crazy goal: Since Lemnos Labs first started investing in 2012, its first 10 startups, which include companies like Nanosatisfi and Airware, have raised $35 million and five have gone through Series A or seed rounds. Conrad said Lemnos Labs is not afraid of high tech, and the new fund will focus on spaces like robotics, aerospace, transportation, agriculture and connected devices. He said they want the investment-friendly Dropcams of the world, not the George Foreman grills.
“It’s figuring out what industries we can be the most disruptive in,” Conrad said. “We want to continue to show that hardware companies are viable and they are successful.”
Lemnos Labs has already dipped into the fund to invest in two startups: 6sensor Labs, which is building a consumer testing device for gluten, and eventually other allergens and toxins like peanuts and seafood, and Ceres, which is working on an aerial camera that can be attached to crop dusters to monitor how effectively and efficiently agricultural fields are watered.
The new fund coincides with Lemnos Labs’ recent move from SoMa into an 8,000-square-foot warehouse in San Francisco’s Dogpatch neighborhood. Dogpatch is cheaper and more sprawling than SoMa, despite its rechristening over the last decade as an artsy, up and coming area. Lemnos Labs shares its new block with a catering service and locally-sourced meat company. The street smells faintly of popcorn due to a nearby popcorn factory.
Conrad said the new building will allow Lemnos Labs to house more startups and hold events. There is room for all the bulky tools a hardware startup needs, including a CNC mill, laser cutter and electrical room. And it finally has a conference room with a door that closes, not to mention a space with a couch and cot for extra-late work nights.
Conrad said Lemnos Labs sets itself apart from other incubators by pushing its startups hard to be prepared. Working in-house means they all benefit from each other’s teams as well.
“It’s about having process and rigor,” Conrad said. “It really is our process and our day-to-day with them that we feel is different.”