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Thiel-backed Mithril Capital targets growth-stage tech ventures

PayPal co-founder Peter Thiel launches a San Francisco-based venture capital firm seeking to take the road less traveled -- in other words, no cloud, no social.

Ajay Royan
Ajay Royan Clarium

"Mithril" is a metal in J.R.R. Tolkien's "The Lord of the Rings," said to be stronger than steel but much lighter in weight. It's malleable, doesn't tarnish and extremely rare.

PayPal co-founder Peter Thiel hopes some of the invented metal's properties are imbued on his new venture capital firm of the same name, announcing this morning that the San Francisco-based company is seeking growth-stage technology companies in which to invest.

"Technology holds solutions to most of the world's most pressing challenges, from resource scarcity to disease," Thiel said. "Solving an intractable problem may require a decade of work, but a lifetime of vision."

In other words, no tarnishing. Growth-stage companies are those that have moved from the initial venture-backed stage but still choose to remain private. Mithril wants to find and profit from the next ARM (mobile chips), FANUC (industrial robotics) or SAS Institute (business intelligence software).

Thiel's Clarium colleague Ajay Royan will lead Mithril. Thiel will serve as chairman.

Mithril's strength, of course, is its familiar relationships. Thiel's Founders Fund and Clarium have both proven to be forces in the tech startup investment community: the former for Facebook (social), Spotify (streaming music), Path (social) and SpaceX (aerospace); the latter for trading currencies and commodities for profit. In terms of scope, Mithril intends to sit between the two.

It won't be an easy ride. Thiel's Clarium has been hit hard as his firm weathers the global economic downtown; the Founders Fund has enjoyed the opposite trajectory as investors seek to place their capital in safer, established hands.

It should be interesting to see where Mithril places its bets relative to the others. Royan told AllThingsD's Liz Gannes that the firm wants to take the road less traveled, a strategy that excludes social media and cloud computing.

This story originally appeared at ZDNet's Between the Lines under the headline "Peter Thiel launches Mithril Capital; eyes growth-stage tech companies."