Cathie Woods’ ARK makes its first investment in startup Lucra – and it’s not AI

ARK Invest Venture Fund has made its first investment in an early stage startup called work, startup founder Cathie Woods told TechCrunch.

“We’re very excited about it,” Woods (pictured above) said in a recent interview about the startup’s funding.

Lucra developed a software program that reimagines corporate loyalty programs into interactive, eSports-like games where customers can play against each other, bet or win money or company giveaways. The founders said its customers include Five Iron Golf, Chess Kings, and Dave & Busters.

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

There are a number of reasons why a well-known financial company has never led a startup. First, ARK Invest Venture Fund is not a VC fund. It is an SEC-regulated mutual fund (also known as a mutual fund), meaning that anyone can invest up to $500. However, it is not publicly traded, so investors cannot sell shares at will. They can sell limited shares actual days, quarter.

Woods also said that the man running the fund, head of research Nick Grous, is “a tough sell,” leaving the startup with the difficult task of getting him excited about leading the deal.

The worst part is that ARK was too gung-ho for this type of business because it got burned after investing in a similar company a few years ago.

“We had a company called Skillz, that worked on the site,” Grous said. “It didn’t go well for us and many other investors.”

Skillz was the hottest company it ever was he got into problems are cases. The main difference, the investor said, is that Lucra is a B2B platform, selling interactive eSports as a loyalty program, instead of trying to license and run games directly to consumers.

“To deal with our initial problem, especially because of our experience with Skillz, to deal with our weakness, to have Nick overcome, that was our first screen,” Woods said of how the launch influenced his company to write a big check.

For this reason, ARK Invest participated in Lucra’s Series A round, and was familiar with its business, its strategy, and founder and CEO Dylan Robbins, Grous told TechCrunch.

“We’ve been in constant contact,” Grous said, adding that his venture-esq fund tries to make quarterly calls with startups on a quarterly basis, just as public companies make quarterly payments to investors. ARK generally operates on the public market, offering publicly traded EFT funds.

Although he was already part of the group, the founder of Lucra was encouraged several times when it came time to buy more shares – first by Grous and then by ARK’s financial committee, he and Woods explained.

On those calls, Robbins “thought about all the things that went wrong” with companies like Skillz, as well as Lucra, and he had answers, Woods said. “No matter how many times we went to him, his passion never wavered,” she said.

It also helped that the company’s investment was promising, it was in an area that ARK was familiar with, and this was not AI, which is a very expensive area these days.

“We’ve been writing about sports betting, understanding the fun aspects of sports,” said Grous, meaning that an investment firm “can better understand the odds.”

ARK Invest Venture Fund they hold corporate divisions such as Epic Games, Kalshi, Discord, for example. It also supports OpenAI, Anthropic, Replit, Grok and Perplexity, so it’s familiar with AI features.

“We’re all over AI, like everybody else, because it’s a big change,” Woods said. “But at the moment, many companies are being ignored.” That means seeing overlooked companies is “our privilege because we’re doing research in many other areas than AI,” he said.