London's Air Street Capital, a venture firm with a keen eye for early-stage artificial intelligence startups, has just raised a whopping $121 million for its second fund.
Guess who's among the backers? None other than Spotify's very own CEO, Daniel Ek!
Air Street Capital, a solo-investor VC firm, is known for its commitment to "AI-first companies." Nathan Benaich, the investor behind the firm, defines such companies as those that simply wouldn't work without their AI component. In other words, if you rip out the AI, the product falls flat, and the customer loses interest.
The firm's focus areas span data analytics and semiconductors, but it's drug discovery that's been hitting the right notes. The use of AI in uncovering new medicines is a hot topic among investors, and Air Street Capital is singing along.
In fact, two of the 19 investments from Benaich's first fund, which was worth $26 million, were sold to biotech firms. Both of these startups were focused on using AI to discover new medicines and therapies. Benaich's second fund has already financed Profluent, a startup that uses generative AI to design proteins.
The potential for AI in drug discovery is massive. According to Regina Barzilay, an engineering professor at MIT, AI has moved from being a hyped technology to a working-horse technology in this field. She believes it's not just about potential anymore; AI is delivering real, tangible results in the lab.
But it's not all about drug discovery. Air Street Capital's portfolio also includes Intenseye, a startup that uses AI to monitor workplace activity. According to Forbes, venture firms are planning to invest in Intenseye at a $300 million valuation.
However, don't expect to see Benaich backing startups building AI models to rival ChatGPT anytime soon. While these firms are seeing soaring valuations, they require a significant amount of capital to train and expand their AI systems. As Benaich puts it, "You have to bet on these companies going to the moon."
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