By Stephen Nellis

Palo Alto, California-based Eclipse Ventures said that it has added as partners Mike McNamara, the former chief of contract manufacturing firm Flex Ltd, and Sanjay Jha, who led chip manufacturer GlobalFoundries after a career at Qualcomm Inc and leading phone maker Motorola Mobility.

The firm, two of whose other partners came from Tesla Inc's manufacturing operations, also said it had closed a new $500 million fund, bringing the total it has raised for investment into startups since its founding in 2015 to $1.1 billion.

Eclipse is unusual among venture capital firms because it invests in companies that make hardware technologies as well as software.

Despite Silicon Valley's name - which derives from the raw material for computer chips - many venture investors prefer to stick to software, advertising and commerce companies. Hardware companies can require huge amounts of capital and face intense competition from both larger rivals and cheaper imitators.

Shares of smart speaker maker Sonos Inc, for example, have declined 34 percent since its initial public offering last year, as Amazon.com Inc, Alphabet Inc and Apple Inc all rolled out competing products.

But Eclipse has funded U.S.-made drones, custom chips to help cameras recognize objects quickly and a startup making robots and software for manufacturing electronics.

Lior Susan, the firm's founding partner, said today's tech giants build both hardware and software, so he's willing to invest in both in hopes of finding the next one. Even Facebook Inc, which many investors think of as an advertising firm, spends billions of dollars on sprawling data centers and is hiring chip designers.

"If it makes sense for [a startup] to open their own factories, we're not going to say no just because it sounds hard," Susan told Reuters in an interview.

McNamara in October retired from contract manufacture Flex, which competes against assemblers such as Hon Hai Precision Industry Co Ltd's Foxconn and has built devices for Fitbit among others. He said he is hoping to use his decades in the manufacturing business to help Eclipse-backed startups hit the market at the right time.

"Eventually, you have to know about when to expand production. Everything you do has to come out of the lab, out of the design center and hit scalability at some point," he told Reuters.

(Reporting by Stephen Nellis; Editing by Lisa Shumaker)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)