A broad group of some of the nation’s leaders in science, business and government have come together in the newly formed venture firm America’s Frontier Fund to begin rebuilding America’s global technology leadership, and they have chosen New Mexico as their launch pad.
To kickstart the initiative, the State Investment Council approved a $100 million investment in an initial $500 million fund, which AFF is now raising to pull emerging cutting-edge technologies out of national laboratories and research universities and drive those innovations through bring new startup companies to market supported by AFF capital and expertise. The SIC is the first public body in the country to provide money directly to the AFF fund, and it is the largest single investment to date in a venture fund made through the council’s private equity program, the money from the Severance New Mexico’s Tax Permanent Fund is pumped by venture firms investing in local startups.
Over time, AFF expects to raise much more public and private capital for its nationwide initiative. But SIC’s commitment from the start puts New Mexico at the forefront and at the center of what could become a major catalyst for major high-tech developments across the country, with New Mexico positioned right in the middle.
AFF is the brainchild of some of the nation’s leaders who want to reverse the decade-long decline in US technical and industrial superiority that has left the nation vulnerable to new challenges from competing nations, most notably China. The pandemic has clearly exposed these vulnerabilities, throwing supply chains into chaos and undermining critical industries. And that year, the war in Ukraine further demonstrated the difficulties caused by the US and world’s dependence on key natural resources like oil and gas from aggressive, hostile nations like Russia.
The crux of the problem, according to AFF executives, is the erosion of domestic development of emerging 21st-century technologies that feed today’s high-tech industries and that in the future will enable the social, economic, and political progress needed to power the U.S to consolidate leadership and national defense in the future. This includes everything from microelectronics, artificial intelligence and advanced manufacturing to quantum science, advanced communications, new energy generation and synthetic biology.
In his speech to SIC on Tuesday, AFF CEO Gilman Louie called these things “frontier technologies” that will define the future. Taken together, they represent the “dawn of a new technological revolution,” Louie told council members, and the US cannot afford to be left behind.
“Leadership in these technologies ensures not only economic prosperity but also national security,” Louie said. “These technologies will impact all facets of life, from healthcare, food production, energy and the environment to education, entertainment, work, commerce, defense and scientific discovery.”
The federal government took an important first step in August to begin rebuilding the country’s technology leadership when the US Congress approved the bipartisan CHIPS and Science Act, which provides $280 billion in funding to expand domestic semiconductor manufacturing, research and development of new technologies approved staff training. And now the public and private sectors need to come together to build on that initiative and pump a lot more money and talent into technology development at every level, Louie said.
A national strategy
This requires a scientific approach to investing that combines the expertise of leading scientists, technologists and policymakers with the seasoned acumen of seasoned investors and executives.
And to facilitate this effort, AFF has developed a process called “Frontiercast” that uses advanced data analytics to create technology roadmaps.
“Frontiercast tells us what to invest in, and our Frontierscape gives us a map that helps us define where and who to invest in,” Louie said.
This process brought AFF to New Mexico because of its extensive scientific infrastructure. These include the state’s national laboratories and three world-class research universities.
“New Mexico has the highest concentration of scientific talent per capita,” Louie said. “It has untapped R&D and world-class patents.”
To tap into this mass of emerging discoveries and innovations, AFF plans to build a network of “venture studios” across New Mexico – called Roadrunner Studios – that will be located adjacent to key research centers and will be headquartered in Albuquerque. AFF will staff Roadrunner Studios with scientists, technologists and business people who together will scour the labs to sniff out the most promising technologies to bring to market by indigenous startups, backed by AFF investments and end-to-end support services will.
This will make New Mexico the launch pad for AFF’s national strategy by transforming the venture studio in Albuquerque into the company’s central headquarters for a chain of studios that AFF will establish in key locations across the United States. The studios will virtually connect local and national teams in a collaborative effort to unleash technological innovation in target communities – particularly in places traditionally overlooked by venture investors – to potentially spark a wave of new frontier technology development.
The goal is to bring national and local talent together in the nation’s heartland — outside of the traditional bastions of venture capital on the East and West Coasts — to build innovative hubs of innovation that benefit from financial backing from the AFF, while also attracting investment from other national venture funds could .
“Roadrunner Studios will serve as the hub of a nationwide virtual Silicon Valley, connecting other centers of scientific, technical and business excellence across the United States and connecting new and growing technology ecosystems across the country in which (AFF) will also invest,” said Louie .
It starts in NM
With SIC’s new $100 million commitment, AFF will begin building the Roadrunner Studios network immediately, said Norman Winarsky, general partner of AFF, a longtime California-based venture investor.
“We will create a series of New Mexico-headquartered hubs supported by technical resources and talent, venture investors, management consultants, coaches and business development legal systems,” Winarsky told the Journal. “In today’s world, everything can be done remotely, with New Mexico being the central hub for Silicon Valley 2.0. I live in Palo Alto and I think this is the right time.”
The AFF network will target transformative technologies that require “patient investment” with significant funding to grow into large, successful ventures over time, Winarsky added.
“We want to build transformative ventures that create technological breakthroughs,” said Winarsky. “We will choose kings.”
Roadrunner Studios will seek out promising technology from the state’s national laboratories and universities, said general partner Steve Weinstein.
“We’re going to find the technology and the people and build a company around them,” Weinstein told the Journal. “That is our core talent. We’ve done that many times in many other places.”
The time for New Mexico is now, Louie said.
“She has the talent, the leadership and the science,” he said. “[AFF wants to]leverage the talent, drive and communities of New Mexico to help America lead the world in the next technology revolution.”
State Investment Council invests record $100 million in high-tech venture initiative
America’s Frontier Fund is building local “venture studios” around NM…