Ondine Capital closes Fund III, adds Brian Yen as partner

By Amara Osei

Ondine Capital announced the first close of Fund III on Tuesday, its third US dollar-denominated venture fund. The firm did not disclose the size of the close or the fund’s target.

How much did Fund III raise?

Ondine disclosed neither a dollar amount for the first close nor a total target for Fund III. Its announcement therefore leaves the vehicle’s deployment scale and remaining fundraising runway undefined.

Commitments came from institutional and strategic limited partners, including several leading Taiwanese semiconductor companies, Ondine said. Ondine did not name the semiconductor investors or disclose individual commitments.

What will Fund III finance?

Taiwan-based Ondine will deploy Fund III across the AI value chain, the firm said. Its stated mandate covers:

• Foundation models
• Next-generation semiconductors
• AI infrastructure
• AI-native software
• Physical AI

The firm said the strategy draws on its experience in semiconductors and deep technology. Ondine describes itself as a venture firm focused on frontier technologies, including semiconductors, AI, enterprise software and clean energy.

The investment scope spans model development, compute infrastructure and systems that interact with the physical world, based on Ondine’s stated categories. The announcement provides no allocation targets for the five areas.

Which companies illustrate the strategy?

Ondine cited three early investments as examples of its approach. Recursive Superintelligence builds recursive self-improving AI systems and was founded by former Salesforce chief scientist Richard Socher.

Ondine said Recursive recently raised $650 million at a $4 billion pre-money valuation. Google Ventures led the round; Nvidia and AMD participated.

Bot Auto works on autonomous freight and was founded by former TuSimple co-founder and CTO Xiaodi Hou. The company recently launched driverless freight operations on the Houston-to-Dallas corridor with Ryan Transportation.

Salience Labs develops silicon-photonics optical switching for AI data centres. The company recently closed a $125 million round led by Bullhound Capital, with AMD Ventures and Intel Capital providing strategic backing. Salience is working with Tower Semiconductor.

Two of the three cited companies disclosed recent financings: Recursive’s $650 million round and Salience Labs’ $125 million round. Bot Auto’s cited milestone was operational, with driverless freight launched on the Houston-to-Dallas corridor. Ondine did not disclose the size of its position in any of the three companies.

Who is Brian Yen?

Ondine appointed Brian Yen as partner alongside the close. Yen previously served as principal and head of Headline Asia’s Taipei office, Ondine said.

His focus at Headline Asia included consumer technology, agentic services and physical AI. Ondine cited respond.io, forest inc., Braid and iMotorbike in describing Yen’s work.

At Ondine, Yen will focus on early-stage founders building intelligent software and physical AI platforms. That mandate sits within Ondine’s wider fund scope across foundation models, semiconductors, AI infrastructure, AI-native software and physical AI.

Yen said: “The convergence of AI and semiconductors is creating opportunities across the technology stack.” He added: “The firm expects significant value creation as the technologies mature.”

Yen’s comments make the investment thesis explicit: AI and semiconductor convergence. The announcement does not set a timetable for the expected value creation or Fund III’s remaining fundraising.

What is LITE-ON adding in Vietnam?

Separately, TNGlobal reported that Taiwan’s LITE-ON will invest $320 million more in Vietnam for capacity expansion. The report gave no timing, site or financing details for the additional spending.

Ondine enters the next stage with Fund III’s first close secured and its scale still undisclosed. The firm expects significant value creation as AI and semiconductors mature, making further closes and early-stage deployment the next tests for its thesis.