Mark Cuban just broke one of his own investment rules

The Broadcast.com founder told Bill Maher’s ‘Club Random’ podcast late last year that he consciously avoided putting his money into California’s tech hub, instead choosing to back initiatives like affordable medication platform CostPlusDrugs.com.

“I do all I can not to let any of my investments work out of Silicon Valley,” said the Dallas Mavericks owner, who is worth $5.1 billion according to Forbes. “The attitudes, it’s just like… ‘Of course we’re smarter. We went to Harvard, we went to MIT, we’re in tech.’”

But it seems like one Silicon Valley business has got what it takes to make him change tactics

Despite his skepticism, Cuban has now put his hand in his pocket for Kirin Sinha’s augmented reality business Illumix, which is based in the Bay Area. He is one of a number of Illumix’s $18-million Series A backers, and told Bezinga Illumix is “the exception that proves the rule”. 

“Sit with Kirin and it’s obvious she is not pretentious—not a tech bro,” Cuban said. “Kirin is super smart and she has already captured market share that has established her company and technology.”

Alongside Cuban, Illumix’s backers for its Series A round includes Sony’s Innovation Fund, billionaire businessman and philanthropist Henry Kravis and Maveron, which was co-founded by former Starbucks CEO Howard Schultz.

Cuban’s long anti-Valley sentiment

The criticism of the Silicon Valley mentality from Cuban, who has stakes in the likes of Magnolia Pictures and AXS TV, is long standing. In a 2019 episode of the Recode Decode podcast, Cuban said start-ups should look to build outside of the Bay Area so they don’t have to compete as hard for resources.

“If you’re on a mission and you’re driven, it doesn’t matter where you are, and effectively, tech has become the industry in Silicon Valley, like the movie industry in Los Angeles. That creates its own set of problems,” he said. “The whole promise of the internet back in the mid-90s was you connect everybody anywhere, and so it never even dawned on me that I should be in Silicon Valley or to move [from Dallas].”

And more recently, Cuban has been burned in Silicon Valley. With the collapse of Silicon Valley Bank, Cuban revealed he was exposed to $8 million to $10 million, with his “baby”—the medication website—struggling to fund its payroll as it had $3.1 million in the lender.

Cuban did not immediately respond to Fortune’s request for comment.

Illumix investment

Illumix provides a platform for creators to make augmented reality experiences, and after its successful funding round is considered a leader in the sector. Sinha hinted in a recent interview at what sets her apart from other founders in the Silicon Valley—mainly, not being a ‘bro’.

“In earlier fundraising, I had to prove the technology and business out to a different level, as women aren’t always afforded the same benefit of the doubt,” she toldForbes, “I knew I had to do more than knock on doors to get my shot—I had to knock down doors to find the right investor that believed in me and the business.”

She added Cuban was in a rare position in that she had turned down investment offers from other companies and individuals as she searched for those who offered more than money.

“We were very specific on who we thought could truly add value to the business we were building,” Sinha added.

Skipping Silicon Valley

Silicon Valley’s male-dominated character has also put-off the likes of Melinda French Gates. Speaking to Fortune last year, the founder of Pivotal—launched in 2015 with the aim of improving women’s lives in the U.S. through a combination of investing and advocacy—revealed she had invested $50 million in an initiative called Gender Equality in Tech Cities. The organization works to open more doors to women in tech through the development of more inclusive innovation hubs in Chicago and other U.S. cities.

“To re-create Silicon Valley or to change it would be incredibly hard,” said French Gates. “But when you’re starting fresh and new, if you start with a model in this perspective, then I don’t think you’ll replicate the old one we had in Silicon Valley.”

Recalling a recent trip to Senegal, she said talks with a group of women whose businesses had been capitalized reminded her of the problems women faced in Silicon Valley. “I realized that I could have been sitting in Silicon Valley, talking to women about what it’s like to run the venture capital gauntlet,” she said. “So here I am hearing the same thing in Senegal: They’re all up against a group of men who are saying, ‘You’re too risk averse.’ Or ‘You’re taking too much risk.’ ”

Palantir CEO Alex Karp is another investor known for launching blistering attacks on the Bay Area, telling Axios in 2020 there is “increasing intolerance and monoculture” in the area. Later that year Karp wrote in an S-1 filing that although the data fusion platform creator had been launched in Silicon Valley, “[it] seems to share fewer and fewer of the technology sector’s values and commitments”.

“The engineering elite of Silicon Valley may know more than most about building software,” he wrote. “But they do not know more about how society should be organized or what justice requires.”