Catapult Ventures launches with $55 million seed fund for AI startups

Synthetic intelligence (AI) is not the stuff of science fiction. Certain, there’s nonetheless a lot hyperbole round sure purposes of AI (and whether they truly can be called AI), however with smart speakers topping Christmas shopping lists and business driverless taxi providers now in operation, AI is extra science reality than ever.

In opposition to that backdrop, a brand new enterprise capital (VC) agency formally launched at present with $55 million in its coffers for very early-stage startups within the area of AI, machine studying, automation, robotics, and web of issues (IoT).

Catapult Ventures is the brainchild of Rouz Jazayeri, a former Intel govt and extra just lately a companion at Kleiner Perkins; and Darren Liccardo, a former engineering govt at Tesla and drone firm DJI. Jazayeri truly helped DJI, one in every of Kleiner Perkins’ portfolio firms, recruit Liccardo from Tesla, and from this the 2 started working collectively on quite a lot of initiatives.

Lately, Liccardo suggested Kleiner Perkins on investments round AI, which was the seed for the 2 to go it alone at Catapult Ventures.

Oversubscribed

Information of the VC agency truly emerged in January 2018, when an SEC filing revealed plans for a brand new $50 million fund — although not an important deal was identified about it. Now that the primary fund is formally closed, Catapult has revealed specifics.

First up, the fund is made up of cash from myriad sources — firms from throughout the automotive, aviation, chip, and IoT spheres; institutional traders; and household places of work. Furthermore, we now know that the fund’s objective is to focus on seed-stage and pre-seed-stage firms, and function the “first institutional, probably the most useful, and probably the most influential traders,” in response to a press release issued to VentureBeat.

That stated, in its brief lifespan thus far, Catapult has joined the collection A rounds in a handful of firms — stealth satellite tv for pc startup SpinLaunch, which closed a $35 million series A round; a self-service AI platform for developers known as Xnor.ai, which raised $12 million; and driverless truck startup Starsky Robotics at its $16.5 million collection A spherical final March.

These have been outliers although, and have been a part of Catapult’s early launch part on the fund’s first closure.

Above: Starsky Robotics

“All three have been firms that we had identified about for fairly a while earlier than we did our first shut,” Jazayeri informed VentureBeat. “All three have been firms that, had our fund been up and operating, we might have been lead traders (or co-lead) of their seed rounds. We nonetheless had sturdy conviction in these groups after our first shut, so we made small investments alongside nice collection A traders. This technique kick-started our fund with three early investments that helped us tremendously in the course of the second half of our fundraise.”

So transferring ahead, Catapult can be very a lot centered on pre-series A funding, and thus far it has invested in a complete of seven startups.

Moreover, Jazayeri stated that there are separate LP (restricted companion) funds underneath administration that can be utilized for added follow-on funding if the businesses carry out effectively. “We’re very lucky to have discovered a supportive group of LPs who share the identical imaginative and prescient as we do,” he stated. “As a part of our collaboration, many of those LPs can and can be follow-on traders within the firms we again.”

Catapult’s technique is two-pronged. It’s about getting in as early as it could actually, and put money into firms which are creating horizontal “core” AI applied sciences that may be utilized to a couple of {industry}. What we’re speaking about right here is issues like sensors, AI algorithms, “subsequent technology compute architectures,” and so forth.

“It’s our mission to first establish modern firms with giant market potential after which information them efficiently by way of the early phases of their firm constructing,” Jazayeri continued.

Nonetheless, Catapult will even put money into extra industry-specific applied sciences that combine {hardware} and software program, together with industrial manufacturing, agricultural know-how, and — as evidenced by Starsky Robotics — autonomous trucking.

“We’re in an extremely attention-grabbing time the place the intersection of know-how growth throughout a number of core {hardware} and software program engineering domains presents a chance to leverage systems-thinking in new methods,” added Liccardo.

Focus

For now, Catapult can be centered fully on North America, an element that’s influenced largely by its intention to be “hands-on” traders. That’s to say, there are inherent challenges to investing in worldwide startups when the traders need to work carefully with their portfolio.

There are different AI-focused funds on the market, in fact — simply final week, a new Canadian VC fund known as Framework Enterprise Companions launched with $115 million underneath its belt. Previously 12 months alone, devoted AI funds have emerged from AI superstar Andrew Ng, Qualcomm, Micron, Base10 Partners, and others.

The timing of at present’s announcement is notable, although, because it is available in the identical week that President Trump signed an executive order to ascertain the American AI Initiative, which can process federal businesses with devoting extra assets to AI coaching, analysis, and promotion. “AI is one thing that touches each side of individuals’s lives,” a White Home official stated. “What this initiative makes an attempt to do is to convey all these collectively underneath one umbrella and present the promise of this know-how for the American folks.”

With all eyes on the AI prize, Catapult Ventures hopes to put money into as much as 25 startups from its first fund — startups which are engaged on real purposes for his or her applied sciences.

“We’re making focused investments into founders and applied sciences which have the most effective alternative to create significant long-term worth with a sensible deployment technique,” Liccardo defined. “We search for founders who create a aggressive benefit with interdisciplinary considering.”

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