Venture capitalists are evolving their investment strategies by acquiring mature businesses instead of solely funding startups. This new approach focuses on enhancing established companies, such as call centers and accounting firms, with artificial intelligence to streamline operations and reach more customers through automation. Firms like General Catalyst and Thrive Capital are leading this shift, promoting it as a novel asset class. Notably, this strategy can significantly benefit AI startups, granting them immediate entry into established markets and client bases that may otherwise be difficult to penetrate.
This strategy, often likened to private equity roll-ups, is being employed by firms such as General Catalyst, Thrive Capital, and solo VC Elad Gil.
A VC marries old businesses with new technology, giving AI startups instant access to large, established clients who can effectively utilize their services.
Since its founding less than two years ago, Long Lake has secured $670 million in funding, according to PitchBook data.
I think we'll look at a few of these types of opportunities, said Samir Kaul from Khosla Ventures about the new investment model.
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