Artificial Intelligence Everywhere - Are you Ready?
Today, I had the pleasure of interviewing, Yiğit Ihlamur, Co-founder and General Partner of Vela Partners, a San Francisco company, whose company is on a mission to invest only in AI Start-ups and just closed their first fund.
What a breath of fresh air in his story.
Since day 1, Yiğit shared that his goal was to invest in AI, data and developer-focused start-ups. And that he and his team are on a mission to find and fund the best entrepreneurs fastest on earth.
This all got started because of the partner’s passion for accelerating innovation, and they were shocked to see how many VC’s are really not skilled in using data sciences and AI in their own businesses or have actually designed, built and delivered real AI projects, he said.
I could really relate to Yiğit’s comments as I see this in our own AI and data sciences and software development experiences at SalesChoice, where investors are skilled at talent sensing and financial metrics, but they often miss the longer time frames in scaling more complex AI enterprise software business models that require multi-model AI capabilities as one size fits all premise is a very naïve premise in the AI industry. AI is often messy and requires the best and brightest AI /ML talent pools to build and commercialize AI intelligent software and building scaleable architectures.
So nearly 24 months later, Yiğit and his partners have closed and announced today a $20M after an earlier fund POC for a total of creating an investment pool of $25M. At this stage, they already have 32 companies across the two funds committed and they also will invest in 10 more startups over the next 12 months. They typically invest $500K-1.5M check sizes and remain collaborative by taking a co-investing with other parties. The company has 8 full -time employees in the operation, and they already have their eyes on creating a larger fund… and based on the energy and passion of Yiğit, I am confident that his vision will be realized.
A Little More Background
What is very unique about Vela Partners is they also have a proprietary product called ‘Ventech’ which has been developed and fine-tuned over many years by ex-Googlers and University of Oxford researchers, and features sourcing, company evaluation, relationship graph analysis, and market intelligence capabilities. Additionally, the company has recently open-sourced more than 20 machine learning models at its Github repository, complete with research papers, to support the startup ecosystem."
To further streamline the process, Vela Partners has created a game-like terminal to assist entrepreneurs, limited partners, and other VCs in using Ventech. Entrepreneurs can analyze tendencies and fast-growing ideas in developer ecosystems like AWS and Github, while whitelisted VCs can identify the hottest seed-stage startups and understand emerging early-stage trends. Limited partners can ask questions using natural language about why Vela invested in a certain startup.
Vela Partners’ collaborative and high-conviction investment style is proving attractive to top-talent entrepreneurs, fellow VCs, and limited partners, according to the company. While it may be too early to talk about concrete results, Vela´s portfolio shows preliminary signs of outlier performance.
Portfolio companies like Grabango ($93 million raised), which is helping grocers run autonomous checkout stores, and Bear Robotics ($115 million raised), which is addressing labor shortages by developing self-driving robots for the hospitality industry, are illustrative examples.
Initially detected by Vela´s Ventech at a pre-revenue seed stage, these companies are growing rapidly, solving real-world problems, and generating significant revenues.
Similar to the team composition of Vela Partners, more than half of its portfolio companies are founded by ex-Googlers. Vela is taking a conscious and focused approach in building and nurturing an active network of ex-Googlers, which is one of the world's top AI talent pools. Finally, limited partners have been an important part of Vela's ecosystem, including institutional.
The market outlook and timing for Vela Partners could not be better as AI continues to be hot for investors, especially in the generative AI business models.
According to Pitch Book report released this month, VCs have steadily increased their positions in generative AI, from $408 million in 2018 to $4.8 billion in 2021 to $4.5 billion in 2022. Angel and seed deals have grown, as well, with 107 deals and $358.3 million invested in 2022 compared with just 41 and $102.8 million in 2018. But also AI overall continues to be an underpinning of the most innovative software companies across the world. According to Next Move Strategy Consulting, the market for artificial intelligence (AI) is expected to show strong growth in the coming decade. Its value of nearly 100 Billion U.S. dollars is expected to grow twenty fold by 2030, up to nearly two trillion U.S. dollars.
Vela Partners has a very unique and refreshing approach to being a venture capitalist, with a collaborative leadership style driven by Yiğit Ihlamur, Co-founder and General Partner of Vela Partners.
He is a VC with a kind heart – although you may think this is an oxymoron – I have no doubt the AI software firms Vela Partners will invest in will bring not just a technology innovation edge to the table, as what he is most interested in hearing is the passion of what is driving an entrepreneur to do what he or she is doing and listening to their stories.
Getting up every day and fighting the fight to push through the dirt requires courage, commitment and finally a VC that is positioning collaboration at the heart of everything they do.
Go Vela Partners Go and spread the positive pollen everywhere. Our technology industry needs more human advantage and emotional intelligence.
How refreshing is this?
