The Story Behind My Investment In Optimus Ride

About a year ago, thanks to an investor friend who, in this particular case, shall remain nameless (but you know who you are, and thank you!) was kind enough to tip me off about a great team he met on the east coast but one that he couldn’t invest in. Often investors only take referrals from other investors if that introducing investor has invested him- or herself; here, this was a close friend, and it was a very interesting company. I’m glad I took the referral.

That is how I came to meet the team from Boston’s Optimus Ride. This week, Optimus Ride announced a large Series A investment led by Greycroft. You can read more about that news here.¬†And, read this great piece by Xconomy on how Optimus fits into the landscape.

I was lucky to be involved in the seed last year, a round led by friends at NextView and FirstMark. While I couldn’t make it to Boston at the time I needed to decide to invest, fate played a hand as some of the team’s leadership, who hailed from MIT’s faculty, had actually shared lab space with one of my old mentor’s from a previous life — I literally picked up the phone, called my mentor (who is a leader at MIT) and within minutes learned the team was, indeed, top-notch.

While I knew I wanted to invest, getting in was a bit harder. Lee @ NextView and Matt @ FirstMark were nice to vouch for me, but I had to really work the phones with the team to get them comfortable with me. Knowing a MIT professor in common really helped. I also told them that having a west coast investor, even if smaller, would be helpful as they thought about future rounds and company building in what is arguably one of the most active sectors over the last few years. Lucky for me, it worked out, I was able to invest, and happily able to follow into the next round.

For context, I have not made many investments in the autonomous driving space. I have, however, invested “around” the idea of the car — companies like Navdy (heads-up display), or Carmera (V2V communications); or a recent stealth AI/data company in the Valley. I’ve always felt the VC industry has over-tilted after the blockbuster acquisition of Cruise Automation by GM. Since then, we’ve seen a flurry of VC investment in the category, tons of self-driving startups and adjacent tech plays, and even funds solely focused on autonomous driving technology.

While I appreciate the surge of entrepreneurial activity (and investment to support it), it always struck me as out of balance. On the other hand, there is no question the transformation of the automotive industry from machine-driven to technology-driven is upon is. It presents a different challenge for VCs here — very few, if any, of these companies can be independent; few, if any, will IPO; so, they all need to be acquired, so VCs who are investing are essentially betting the consolidating pressures in this industry will reward them for taking this risk.

Despite that, investing in a team like the one behind Optimus doesn’t feel like a risk at all — it feels like a huge opportunity. It is a truly interdisciplinary team of technologists and operators and one that could very well defy my logic above and remain independent, remain in control of their own fate. The interdisciplinary nature of Optimus is, at the end, what distinguishes it — we see today, especially in the Bay Area, many isolated product solutions in this space, but because Optimus is away from the Valley and has these networks, they were able to build the team they wanted to without fear of talent fragmentation. That is working so far, and it’s a theme I’ve been investing against and hope to write more about here.

Finally, of course, congrats to the entire Optimus team, and it will be fun to watch fleets deployed.

Haystack is written by Semil Shah, and is published under a Creative Commons BY-NC-SA license. Copyright © 2017 Semil Shah.

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