ARK Invest backs Lucra in first lead startup investment outside AI

ARK Invest Venture Fund has made its first-ever lead investment in an early-stage startup called Lucra, according to firm founder Cathie Wood.

“We feel pretty excited about it,” Wood (pictured above) said in a recent interview regarding the investment in the startup.

Lucra has built a software platform that reimagines corporate loyalty programs as interactive, esports-style experiences, such as tournaments where customers can compete against each other, with options to bet or win cash rewards or company giveaways. The startup said its customers include Five Iron Golf, Chess Kings, and Dave & Buster’s.

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

There are a few reasons why the well-known investment firm had never led a startup deal before. For one, the ARK Invest Venture Fund is not a typical venture capital fund. It is an SEC-regulated interval fund (also known as a closed-end mutual fund), meaning anyone can invest in it starting from as little as $500. However, it is not traded on a public exchange, so investors cannot sell shares at will and can only redeem a limited number of shares on specific dates, typically quarterly.

Wood also noted that the person running the fund, director of research Nick Grous, “is a tough sell,” making it challenging for startups to convince him strongly enough to recommend leading a deal.

What makes the decision even more notable is that ARK was previously cautious about this type of business after a negative experience with a similar company years ago.

“We had actually owned a company called Skillz, which kind of operated in this space,” Grous said. “It didn’t work out well for many other investors and us.”

Skillz was once a high-profile public company that later faced difficulties and legal challenges. The key difference, according to the investor, is that Lucra operates as a B2B platform, offering interactive esports experiences as part of loyalty programs, rather than directly licensing and operating games for consumers.

“Overcoming our initial hurdle, especially given our experience with Skillz, overcoming our reticence, having Nick overcome it, that was our first screen,” Wood said while explaining how the startup convinced the firm to lead the investment.

ARK had already participated in Lucra’s earlier Series A round, which helped the firm become familiar with its business model, growth trajectory, and founder and CEO, Dylan Robbins, Grous told.

“We had been in constant communication,” Grous said, adding that the venture-style fund tries to hold quarterly conference calls with portfolio companies, similar to public company earnings updates. ARK primarily operates in the public markets through a range of exchange-traded funds (ETFs).

Despite already being in the portfolio, Lucra’s founder was thoroughly questioned multiple times before approval for additional investment—first by Grous and later by ARK’s investment committee, as he and Wood described.

During those discussions, Robbins had “thought about all the things that went wrong” with similar companies like Skillz, as well as potential risks within Lucra itself, and had prepared answers, Wood said. “No matter how many times we went at him, his conviction, there was just no let up,” she described.

It also helped that Lucra’s financials showed strong promise, the company operates in an area ARK understands well, and the opportunity was outside the heavily crowded artificial intelligence sector.

“We’ve been underwriting the sports-betting space, understanding the gamification aspects of entertainment,” Grous said, explaining that the firm could “really understand the opportunity here.”

The ARK Invest Venture Fund already holds stakes in companies such as Epic Games, Kalshi, and Discord. It also has exposure to AI-related companies such as OpenAI, Anthropic, Replit, Grok, and Perplexity, indicating it is already active across the AI ecosystem.

“We are all over AI, just like everyone else, because it is a massive revolution,” Wood said. “But in the process, a lot of companies are being neglected.” She added that identifying such overlooked opportunities represents “our opportunity because we are doing research in many other areas than AI.”