Thiel Capital’s Jack Selby owns stakes in hot startups like Etched via Arizona Communications

Nvidia competitor Etched announced this week that TSMC manufactured its first chip earlier this year. As the four-year-old, $5 billion startup prepares to ship systems powered by this chip to customers later this summer, scaling up production could be difficult. Like other chip designers, Etched must compete for limited capacity at TSMC’s factories in Taiwan.

Copper Sky Capital, one of Etched’s early investors, hopes the chipmaker will find a solution to its manufacturing limitations by eventually producing chips at TSMC’s facility in Arizona. When the four-year-old venture capital firm invested in Etched’s $120 million Series A two years ago, founder Jack Selby secured a partial allocation by promising to eventually help the startup bring chip manufacturing back to Arizona.

Selby, a former PayPal executive and longtime managing director of Peter Thiel’s family office, Thiel Capital, founded Phoenix-based Copper Sky in 2021 (formerly AZ-VC). The firm’s first $115 million fund focused primarily on startups based in Arizona and the Southwest. Selby’s thesis was that most coastal startups, especially those in California, Massachusetts, and New York, are significantly overvalued compared to startups in his area. However, Selby saw an opportunity to bridge the gap in the other direction by helping California hardware startups move their production to Arizona.

Selby credits Copper Sky’s investment in Etched — a hard-to-find startup — for its influential role in Arizona’s economy. As a member of the Arizona Commerce Authority’s board of directors, Selby is heavily involved in recruiting out-of-state companies to establish manufacturing operations in the region.

“When Copper Sky invested with Etched, the company clearly understood our connection to the Arizona semiconductor industry, and in particular the local TSMC GIGAFAB,” Selby told TechCrunch.

While Copper Sky has recently expanded its focus beyond the Southwest to include non-traditional enterprise centers across the country, Selby said the company is also interested in supporting hardware companies, including the defense sector, that can establish manufacturing operations in Arizona.

The company is expected to soon have more capital to invest in those higher-priced coastal businesses, and those located throughout the United States. Copper Sky is currently raising a second fund worth $300 million, according to a regulatory filing.