Capitalist entrepreneurs have always focused on investing in companies that use technology either to disturb the established industries or to create completely new business categories.
But some VCs are starting to turn the script in their investment styles. Instead of funding newly established companies, they acquire mature companies – such as call centers, accounting companies and other professional service companies – and optimizing them with artificial intelligence to serve more customers through automation.
This strategy is often likened to private investment funds, employed by businesses such as General catalyst; Thrives chapter; solo vc elad gil. General Catalyst, with the fact that this, as a new category of assets, has already supported seven such companies, including Long Lake, a start that attracts home owners’ associations in an effort to make the management of communities more rationalized. Since its inception less than two years ago, Long Lake has secured funding of $ 670 million, according to Pitchbook data.
While the strategy is still new, some other business clothing has told TechCrunch that they also think about trying the investment model.
Among them is Khosla Ventures, a business known for premature bets on dangerous, unproven technologies with long development schedules.
“I think we will see some of these types of opportunities,” said Samir Kaul, a partner of Khosla Ventures, in TechCrunch.
Interestingly, this PE aroma approach could be a surprising benefit to crowds of AI Startups VCS support. If a VC marries old businesses with new technology, the newly established AI companies wishing to serve these industries will virtually access direct access to large, established customers.
According to Kaul, this access would be useful when new newly established businesses find it difficult to secure their customers on their own. With the rapid rate of change of AI, the number of newly established markets on the market and historically large sales circles involved in business selling, these difficulties apply to many AI businesses.
But Khosla Ventures wants to go carefully. “The companies we are considering are very unlikely to lose money,” Kaul said, but does not want the strategy to destroy the powerful return history of the business. “My biggest anxiety in life is that I manage other people’s money and I want to make sure I continue to be a good manager of it.”
While Khosla Ventures begins to “dabble” in AI Roll-up investments, Kaul explained that the business wants to make some agreements to evaluate whether these investments give strong returns for the business before they may raise money for some type of vehicle that specifically addressed this investment strategy.
If the first bets are betting, Khosla will probably work with a PE business to help her with acquisitions instead of hiring a team. “We wouldn’t do it alone. We don’t have this know -how,” he said.
