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Teforia

Lemnos, a Silicon Valley venture firm focused on hardware startups, has raised $50 million for its third—and largest—fund. Jeremy Conrad and Helen Zelman founded Lemnos in 2011, originally as a startup incubator, and have invested in 39 startups, including Airware, Spire, and Teforia.

Changes: The larger fund size will allow Lemnos to write larger checks and do more follow-on investing. The firm also has hired what it calls a "director of portfolio development" to work with portfolio companies as they grow and need to raise more funding. It's also now open to investing in purely software companies—so as long as they're still related to hardware products, Conrad told Axios.

VC and hardware: Until a few years ago, VCs were wary of backing hardware startups because of the high costs and complex production. But that's changed in recent years. "It's been proven that you can do hardware at venture scale," said Conrad of the ability for hardware startups to efficiently grow and bring significant returns to their investors.

The key to building what Conrad calls a "venture-backable business" in hardware is recurring revenue. He cites Kodak as an early proof of that model—selling film to its customers is how the company kept making money after the initial camera purchase. (Snap also looks to model itself after Kodak.) For modern hardware startups, this could be in the form of subscriptions to cloud-based video storage (for cameras), consumable items (like tea pods for a tea maker), or even renting out industrial robots and charging for their use.

Go deeper

53 mins ago - World

COVID cases surge in South Africa in sign Omicron wave is coming

Recreated from Our World in Data; Chart: Axios Visuals

South Africa alerted the world to the Omicron variant. Now data out of South Africa may serve as a warning of what we're facing.

Driving the news: South Africa recorded 11,535 new cases Thursday with 22.4% of tests coming back positive — up from an average of about 300 new cases, with a 2% test positivity rate 10 days earlier. The country's top public health officials expect that exponential rise to continue as Omicron rapidly becomes the dominant variant.

BuzzFeed to go public, after shareholders approve SPAC deal

Photo by Charley Gallay/Getty Images for BuzzFeed

BuzzFeed is set to become publicly traded on Monday, after shareholders of a SPAC called 890 Fifth Avenue Partners voted to approve a previously-announced merger.

Yes, but: The vast majority of the money the SPAC raised in January was yanked, a signal that investors aren't very optimistic about BuzzFeed's future prospects.

Omicron cases confirmed in 4 U.S. states

A healthcare worker inserts a Covid-19 rapid test into a machine in Denver, Colorado. Photo: Daniel Brenner/Bloomberg via Getty Images

Five cases of the newly-discovered Omicron variant were detected in New York, Gov. Kathy Hochul (D) and New York City Mayor Bill de Blasio announced on Thursday, making New York the fourth state with confirmed cases.

The latest: In addition to New York, the variant has been confirmed in California, Colorado and Minnesota.