Cathie Woods’ ARK makes its first lead investment in startup Lucra — and it isn’t AI

ARK Invest Venture Fund has made a significant move by leading a $20 million Series B investment in Lucra, an innovative startup that is transforming corporate loyalty programs. Cathie Woods, the founder of ARK, expressed her enthusiasm about this milestone investment during a conversation with TechCrunch. Lucra has created a unique platform that gamifies loyalty initiatives, turning them into interactive events reminiscent of eSports tournaments. Users can engage in competitions, with opportunities to win cash prizes or company giveaways. Prominent clients such as Five Iron Golf, Chess Kings, and Dave & Busters have already adopted Lucra's services. This investment marks ARK’s inaugural lead in a startup deal, which is notable given the fund’s unconventional structure. Unlike traditional venture capital firms, the ARK Invest Venture Fund functions as an SEC-regulated interval fund, allowing broader public participation with a minimum investment of $500. However, it is not listed on public exchanges, limiting the liquidity of shares to specific quarterly dates. The cautious approach taken by ARK can be attributed to its previous experiences, particularly with a company called Skillz, which faced significant challenges after ARK's investment. Nick Grous, the fund’s director of research, noted that overcoming the initial hesitation stemming from past experiences was key to endorsing Lucra. Unlike Skillz, which directly engaged consumers, Lucra operates as a B2B platform, offering interactive eSports as a method for businesses to enhance customer loyalty. This distinction played a crucial role in ARK's decision-making process. Grous highlighted that their familiarity with Lucra's business model and ongoing communication with its leadership contributed to their confidence in this venture. Despite already investing in Lucra's Series A round, the scrutiny continued during discussions about increasing their stake. CEO Dylan Robbins faced extensive questioning from both Grous and the investment committee. His preparedness to address potential pitfalls, coupled with strong financial indicators, helped solidify ARK's commitment to invest further. Woods emphasized ARK's keen interest in areas beyond the AI boom, acknowledging that many innovative companies are being overlooked amidst the hype. This strategic focus allows ARK to identify unique opportunities in sectors like sports betting and gamification, reinforcing their diverse investment portfolio that includes high-profile names such as Epic Games and Discord.