Deena Shakir recently became a partner at Lux Capital, following a seven-year tenure at Google, including her time with GV, Google’s venture division.

Although Shakir appears to be a natural fit within the firm – recognized for its concentration of PhDs and ambitious investments – a career in venture capital wasn’t her initial focus, as she shared during a detailed conversation last week. Shakir, an Iraqi-American who was raised in Silicon Valley after her parents immigrated to the area, financed her education at Harvard, and subsequently Georgetown’s School of Foreign Service through a combination of academic scholarships and employment, initially considering a career in medicine or pursuing a PhD in anthropology.

However, an internship with the BBC, where she reported on a significant White House address, led to over two years of service at the State Department under then Secretary Clinton. Upon returning to her family, she sought to create a meaningful impact, and while she hadn’t anticipated doing so through investments, that is now her reality.

For those unfamiliar with Shakir’s work, her conversation can be found here; in the meantime, the following are slightly edited excerpts that offer insight into her investment priorities and the reasoning behind them.

TC: Lux is well-known for its investments in aerospace companies and satellite technology, yet its website details 21 distinct industries within its portfolio. Do the firm’s investments stem from industries that particularly attract the firm, or from compelling teams operating within those industries? 

DS: I actually believe that some industry classifications can be limiting, as a review of our portfolio reveals a strong interest in healthcare, cultivated meats, robotics, artificial intelligence, food production, industrial IoT, and the intersection of data and fintech. Our investment approach is fundamentally intersectional. However, regarding our investment choices, we do prioritize areas where our historical expertise has provided valuable insights, such as autonomous vehicles, which has informed our understanding of the software platforms needed for the next generation of self-governing systems. This represents a significant amount of generational and evolutionary investing.

TC: Last week, Lux participated in the seed funding round for Varda, a startup focused on manufacturing in space. What is Varda aiming to produce in space, and what is the rationale behind this endeavor?

DS: Few companies align more closely with Lux’s investment philosophy than Varda. We prioritize companies that transform science fiction into tangible reality, particularly within the space sector. We have previously invested in Relativity Space, as well as numerous satellite companies – including Orbital Insight, Planet, and others.

This field is not only of interest to us, but we have also developed a strong relationship with the founding team over time and have great confidence in their capabilities. The company’s purpose isn’t immediately obvious, which is likely why you’re asking about it – what exactly do they do, right? Currently, they are focused on two areas we highly value – manufacturing and space – and there are some truly innovative developments that we are only beginning to understand their potential applications in space, including advancements in physical processes and supply chain management. This team is leading the way in exploring these possibilities.

TC: Is the company planning to manufacture carbon nanotubes in space for use on the International Space Station? What problem is it attempting to solve?

DS: Ultimately, the core issue revolves around cost and supply chain logistics. Launching anything into orbit remains exceptionally expensive – often costing tens of millions of dollars or more. This is the primary challenge Varda aims to address through manufacturing in space, and they have developed some fascinating, yet currently confidential, strategies for achieving this.

TC: Is there sufficient late-stage funding available for companies that will require substantial capital? Lux currently manages $2.5 billion in assets, having raised $1 billion last year. However, some space investors suggest there is a shortfall, partly due to a limited number of successful exits.

DS: That’s a valid point, as we became enthusiastic about what we now call frontier technology before it was widely recognized – and certainly before it demonstrated a proven venture return profile. Now, it’s increasingly clear that frontier tech is no longer emerging; it’s becoming a vital component of many large enterprises. We are witnessing major companies mass-producing rockets, private companies launching rockets into space and collaborating with NASA, and venture-backed companies that once seemed like science fiction achieving impressive valuations. It appears we are at a turning point. Examining the ownership structures of these companies reveals the involvement of players who may not have made similar investments in the past.

TC: Shiru is one of your investments, utilizing computational design to create improved proteins to address global food security. What does this investment reveal about your interests and investment process?

DS: I dedicated a significant amount of time, particularly during my time at GV, to working with alternative protein companies within our portfolio. A key aspect of my role, both during my time in government and at Google, involved engaging with commercial partners, including Fortune 500 companies, to understand their needs. A significant part of my role at GV was connecting these large corporations with innovative tech companies to address their innovation requirements, and this experience heavily influenced my investment thesis.

I firmly believe there is a substantial opportunity in the food sector to enable these major food companies to meet growing consumer demands, environmental concerns, and cost pressures related to animal-based ingredients. Shiru’s approach is particularly interesting because it mirrors a successful business model in the pharmaceutical industry – enabling the production of novel intellectual property. In this case, it involves creating novel plant-based proteins using machine learning and computational biology, and then licensing them to food companies to develop products like the Impossible Burger or Beyond Meat, or to replace costly animal-based ingredients in existing products.

TC: AllStripes is another of your investments, aggregating and analyzing medical records and then selling the anonymized data to pharmaceutical companies to aid in drug development. Does this indicate a focus on machine learning?

DS: Yes, my focus is on machine learning and AI streamlining traditionally analog industries, whether it’s education, finance, food, or, particularly, healthcare, where I dedicate the majority of my time.

TC: What areas are you currently exploring?

DS: Within healthcare, I am focusing heavily on women’s health. I’m examining fertility technology, including robotic cryo storage, embryo selection, and consumer-focused IVF clinics. It’s a growing market, especially considering demographic trends such as women delaying childbirth and increasing IVF rates in other countries.

As a mother of two young children, I’ve experienced some concerning medical situations during both pregnancies, which inspired me to investigate this area as a patient. I also believe there has been a significant lack of investment in women’s health. I find it frustrating when anyone describes women’s health as a niche area. It is anything but. From a purely numerical standpoint, women comprise half the population, and they account for over 80% of healthcare spending. Companies focused on women’s health offer a strong entry point into other areas of healthcare.

Beyond women’s health, I’m looking at menopause and aging in place for individuals of all genders. Mental health is also a major priority. My family has a background in medicine; my father is a psychiatrist, and he moved to Stanford in the 1970s for his psychiatry residency. I’ve always been fascinated by mental health. Like many children of immigrants, I briefly considered becoming a doctor myself and even interned with the VA’s psychiatry department before starting college.

I’m particularly excited about this field because it remains relatively untouched by technology – especially regarding data adoption of electronic health records. On the diagnostic and therapeutic side, there have been some promising non-pharmacological interventions for mental health, such as transcranial magnetic stimulation (TMS), but it has been challenging to address, and it’s understandably top of mind for many during the pandemic. We’re seeing a lot of innovative approaches emerge, as well as increased support for companies that have been working in this space for some time.

TC: Lux established a $345 million healthcare-focused SPAC, or special purpose acquisition company, in October. Do you anticipate creating more SPACs, and would the intention be to support companies Lux has previously funded or those with which it has no prior connection?

DS: We believe SPACs are a valuable tool for companies with a compelling story and whose value isn’t best assessed by looking at past performance. Given the evolving landscape of healthcare, particularly in light of the pandemic, it’s a particularly opportune time for healthcare investments.

We’ve received a significant amount of interest from leading companies in the healthcare sector. It’s a very dynamic time for healthcare. We are not currently considering our own portfolio companies, but several of our companies are exploring this option, and we are encouraging them to do so.