Erik Lindblad’s Post

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Managing Partner på Zenith Ventures

Many VCs shy away from hardware. But I see hardware as a brilliant VC opportunity, especially when combined with software and done right. Here’s why and how I see that hardware can offer the required outlier VC returns and fit into our model: 🔒 Unique MOAT: Hardware, paired with software, creates a robust barrier to entry, enabling solutions that pure software can't achieve. 🤝 Enhanced Stickiness: Installing a physical device creates a deeper commitment than a software subscription, leading to lower churn rates. The tailored experiences and direct value from these devices are hard to replace. 📊 Data Advantage: Hardware devices can enhance software capabilities by collecting valuable data, building a powerful data MOAT. What type of hardware investments are attractive to me as a boutique VC? Scalability: Hardware that is almost as scalable as software, meaning easy to ship and install. Service-Oriented Sales: Sold as a service with high blended software-like margins. Capital Efficiency: Low capex to enable capital-efficient scaling. 💡 For the skeptics, here are a few formerly VC-backed examples showcasing the potential for VC-returns in hardware/software businesses (not even mentioning Nvidia, Apple and the likes..): 🪹 Nest Labs: Smart home devices (thermostats, smoke detectors etc.). Acquired by Google for $3.2 billion in 2014. 🏃 Fitbit: Wearable fitness trackers and smartwatches. Acquired by Google for $2.1 billion in 2021. 🛎️ Ring: Smart doorbells and security cameras. Acquired by Amazon for over $1 billion in 2018. I'm proud that we at Zenith Venture Capital are backing the next generation of hardware-enabled companies, like Minut led by Nils Erik Mattisson and Valpas with Martim Gois at the helm, which are on track to be the next Nest Labs and Ring. What are your thoughts on the future of hardware investments in VC? #VentureCapital #Hardware #Investment #TechInnovation #StartupSuccess

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Nils Erik Mattisson

CEO & Co-founder at Minut

5mo

Alan Kay famously said that people who are serious about software should build hardware. This is more true than ever in the age of AI. Having hardware installed with customers means getting access to data no one else has. That can data can be leveraged to build vertical software and AI with functionality that software competitors can't touch. It is harder than running your average startup, but if you build it right, the startup will have a lot more staying power!

Aymerik Renard

General Partner at HCVC

5mo

It's part of our fund name, so you can bet we're into it as well.

Christopher Lindfeldt

Entrepreneur - Investor - Evangelist

5mo

What I think? Right on the money! Evolution in e-com and saturated 4g coverage has contributed to a game changing environment for hardware distribution and IoT management, especially favorable in the B2B segment. At Surfboard, our payment terminals is handled by API calls with no human intervention between the factory and when it arrives to the merchant where it is configured automatically.

Axel Bruzelius

Founder and COO at Gilion

5mo

love this piece, and couldn’t agree more!

Marie Claire Maxwell

Trade & Invest Promotion | Tech & Impact Initiatives | Board & Mentoring | Talent Attraction

5mo
Ahmad Gaber

Founder | Investor | Board Member

5mo

We’d love to show you Norbert Health !

Joel Qviberg

Key Account Manager - Ciceron Group

5mo

Spännande! Ett annat superintressant case på temat är Whoop som värderades till 3,6 miljarder USD så sent som förra året!

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