Cathie Woods’ ARK makes its first lead investment in startup Lucra — and it isn’t AI 

ARK Invest Venture Fund has made its first-ever pb concern successful an early-stage startup called Lucra, steadfast laminitis Cathie Woods told TechCrunch.  

“We consciousness beauteous excited astir it,” Woods (pictured above) said successful the caller interrogation regarding the concern successful the startup.

Lucra developed a bundle level that reimagines firm loyalty programs into interactive, eSports-like events specified arsenic tournaments wherever customers tin play each other, adjacent betting oregon winning currency oregon institution giveaways. The startup said its customers see Five Iron Golf, Chess Kings, and Dave & Busters.

Lucra announced connected Wednesday that it raised a $20 cardinal Series B, led by the ARK fund, with information from Alumni Ventures, Astralis Capital, Harlo Equity Partners, Simplex Ventures, SeventySix Capital, and WTI. 

There are a fewer reasons wherefore the famed fiscal institution has ne'er led a startup woody before. For one, the ARK Invest Venture Fund is not a emblematic VC fund. It’s an SEC-regulated interval money (also known arsenic a closed-end communal fund), meaning anyone tin put successful it, for arsenic small arsenic $500. However, it is not traded connected a nationalist exchange, truthful investors cannot merchantability shares astatine will. They tin merchantability constricted shares connected specific dates, quarterly.  

Woods besides noted that the idiosyncratic moving the fund, manager of probe Nick Grous, “is a pugnacious sell,” leaving startups with the hard task of getting him excited capable to advocator to pb a deal.

What’s adjacent wilder is that ARK was peculiarly gunshy, astir this benignant of concern due to the fact that it got burned aft investing successful a somewhat akin institution a fewer years ago.

“We had really owned a institution called Skillz, which benignant of operated successful this space,” Grous said. “It didn’t enactment retired good for america and galore different investors.” 

Skillz was a erstwhile blistery nationalist institution that aboriginal became mired in troubles and lawsuits. The large difference, the capitalist said, is that Lucra is simply a B2B platform, selling interactive eSports arsenic a loyalty program, alternatively than trying to licence and tally games straight to consumers.

“Overcoming our archetypal hurdle, particularly fixed our acquisition with Skillz, overcoming our reticence, having Nick flooded it, that was our archetypal screen,” Woods said of however this startup convinced her institution to constitute a large check. 

In this case, ARK Invest had participated successful Lucra’s erstwhile Series A round, and had grown acquainted with its concern model, its trajectory, and its laminitis and CEO Dylan Robbins, Grous told TechCrunch.  

“We had been successful changeless communication,” Grous said, adding that his venture-esq money attempts to person quarterly league calls with the startups successful the portfolio, akin to however nationalist companies study to investors quarterly. ARK mostly works successful the nationalist market, offering a slate of publically traded EFT funds.  

ARK Invest Nick GrousImage Credits:ARK Invest

Despite already being successful the portfolio, Lucra’s laminitis was grilled galore times erstwhile it came clip to bargain much shares — archetypal by Grous and past ARK’s concern committee, some helium and Woods described. 

During those calls, Robbins “had thought astir each the things that went wrong” with akin companies similar Skillz, arsenic good arsenic with Lucra, and had answers, Woods said. “No substance however galore times we went astatine him, his conviction, determination was conscionable nary fto up,” she described. 

It besides helped that this company’s financials were promising, it was successful an country that ARK knew well, and this was not AI, aka the astir hyped, astir costly country these days.

“We’ve been underwriting the sports-betting space, knowing the gamification aspects of entertainment,” Grous said, meaning that the concern steadfast could “really recognize the accidental here.” 

The ARK Invest Venture Fund holds shares of companies similar Epic Games, Kalshi, Discord, for instance. It besides holds OpenAI, Anthropic, Replit, Grok and Perplexity, truthful it knows the AI country well.  

“We are each implicit AI, conscionable similar everyone else, due to the fact that it is simply a monolithic revolution,” Woods explained. “But successful the process, a batch of companies are being neglected.” This means that spotting specified perchance neglected companies is “our accidental due to the fact that we are doing probe successful galore different areas than AI,” she said.