AI Arms Race

VCs Go All In on Generative AI, Tribeca's Second Act Attracts $200 Million, and a Startup Looks to Scale its Content Management Platform.

Author

Adam from VC Brags
March 29, 2023

Welcome Shareholders,

In this daily edition of the Brags Newsletter, we'll cover how VCs are jumping on the Generative AI Bandwagon, a Venture firm generating big returns with small checks, and a Berlin based startup raising money to boost its digital content management platform.

So sit back, grab a snack, and enjoy!

Venture Today 👏

  • As demand for generative Artificial Intelligence startups continues to surge, investments have quickly followed, with billions being poured into the hot sector.

VCs have been steadily increasing their positions in generative AI startups, with investments jumping from $408 million in 2018 to a staggering $4.8 billion in 2021 and $4.5 billion in 2022. This trend is not limited to late-stage or growth rounds, as angel and seed deals have also witnessed remarkable growth. In 2022, there were 107 early-stage rounds worth $358.3 million invested in generative AI, compared to a meager 41 deals worth $102.8 million in 2018.

There have been several winners across each space within generative AI. For instance, WSC Sports landed $100 million in a Series D to use AI to generate video clips for sports fans. On the other hand, Jasper, which focuses on generating marketing content, raised $125 million at a billion-dollar valuation. Then there are Text-to-Image focus companies like Stability AI, which raised $101 million last year. Other LLM model researchers and developers like Anthropic, Cohere, and Inflection have raised a hundred million or more in funding rounds over the last year.

Who's Raising?

  • Tribeca Venture Partners, an early-stage venture firm specializing in New York-based investments, is currently raising its second growth-stage fund, aiming for a target of $200 million.

The approach is a modified downcycle adaptation of the strategy Tribeca originally developed for its inaugural Access fund, which debuted in 2018 with a capital of $45 million. Unlike other venture firms that raised growth funds to double down on late-stage investing, Tribeca took a different route.

Tribeca would usually invest the smallest check in the fund, between $5 and $15 million, without requiring a board seat, all while setting the valuation of the round. The company's first fund made investments in seven companies, achieving an IRR of 55%. The venture fund wants to replicate its strategy with the second fund but said it would write smaller checks while pricing down rounds.

Startup of the Day

  • Berlin-based Hygraph, which focuses on federated content management, said it had raised $30 million through a Series B led by European investor One Peak.

Other investors in the round included previous backers like OpenOcean and SquareOne, as well as new investors like CEO of Spryker Systems Boris Lokschin. Berlin-based startup Hygraph has developed a platform based on a novel "federated" content management approach.

With a composable architecture, the platform can effectively manage multiple data sources and endpoints, all from a single platform. With roughly 400 customers, including Samsung, Philips, and FMCG conglomerate Dr. Oetker, the startup aims to leverage the new funding to further develop its platform and explore new applications and geographies.

Fresh Finds

  • Podsqueeze is an AI-powered tool that allows podcasters to generate and customize quality Transcripts.

  • Podsqueeze also enables users to generate Show Notes, Timestamps, Newsletters, Social Posts, Tweets, and other types of content,

  • Podsqueeze works across podcast video and audio.

Memes and Other Things

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