Eclipse raises $1.3 billion to back and build physical AI startups

Palo Alto-based venture capital firm Eclipse has raised $1.3 billion in fresh capital. The new capital is split between a $591 million early-stage incubation fund—defined as a pool of capital specifically allocated for building companies internally within the venture capital firm—and a second fund oriented toward growth-stage startups.

The firm is targeting “physical AI,” which refers to artificial intelligence applied to physical-world problems such as robotics and autonomous vehicles. Eclipse’s strategy centers on building an ecosystem where portfolio companies can partner early on to build scale and proof points, allowing them to address subsequent market demand. The firm’s existing portfolio includes several companies operating in the physical world:

• Arc
• Redwood Materials
• Bedrock Robotics
• Wayve
• Mind Robotics

According to Jiten Behl, a partner at Eclipse, this technological shift represents the first time innovation will move from digital screens into the physical world, bringing advanced intelligence and actual actions to solve real-world problems. Behl pointed to previous waves of innovation over the last two decades, such as the internet, mobile cloud, and social media eras, contrasting them with the current shift to the physical world. He noted that the strategy involves connecting these different sectors, building scale across them, and using data across sectors to train smarter AI models to benefit a broader group and build a competitive moat.

Beyond investing in existing startups, Eclipse plans to build companies internally using the new capital. Behl confirmed that this company-building process has already started, stating that the firm is working on a couple of ideas, particularly those focused on cross-enterprise applications. With the new capital, Behl stated that the firm has a “nice war chest to go and make a serious dent in the market and support the companies in the right way across the life cycle.” He explained that portfolio companies will partner with each other directly, and hopefully, also work with each other’s partners to go after the next set of demand.

Why it matters

Eclipse is deploying $1.3 billion to invest in and incubate “physical AI” startups, aiming to create an ecosystem where portfolio companies partner with each other to scale across sectors like transportation, energy, and defense.