Luxembourg-based, global VC Alpha Intelligence Capital (AIC) has just announced it’s raised $100m of its second AI-focused fund. Its goal is to raise a total of $300m.
AIC was founded in 2018 to back companies developing advanced artificial intelligence technologies.
Investment in the AI sector is down by 36% globally in 2022 after seeing massive growth — and high valuations — the previous year. However, AIC founder and managing partner Antoine Blondeau sees this as an opportunity to invest at more reasonable valuations.
Where will the money go?
AIC plans to invest in up to 30 companies around the world working on cutting-edge AI technology. The VC mainly focuses on Series A and B rounds across multiple sectors including healthcare, biotech, cybersecurity, enterprise software, manufacturing and logistics, and sustainability.
What is AIC’s track record?
AIC’s first fund totalled $185m that were invested into 30 companies. Two of them have exited: UK-based music generation company AI Music was acquired by Apple this year, and Singapore and Amsterdam-based cybersecurity startup ReQta was sold to IBM in 2021.
Several other portfolio companies are currently in talks with potential buyers, Blondeau tells Sifted.
One of the companies in AIC’s portfolio is InstaDeep, a London-based soonicorn known for supporting Covid vaccine developer BioNTech with vaccine and drug discovery, as well as with predicting high-risk Covid variants.
AIC has also invested in Irish cybersecurity company Getvisibility and in Vamstar, a UK startup applying AI to the supply chain of medical supplies and drugs.
Who’s backing AIC?
Alpha Intelligence Capital hasn’t disclosed the names of its investors, but Blondeau tells Sifted that its backers include major industrial families and companies, primarily from Europe, that want to understand how AI technology may impact their industry, as well as other institutional and private equity investors from around the world.
While many VCs are taking a ‘wait and see’ approach during the current economic downturn, AIC has set out to capitalise on the lower valuations now seen in the AI sector — where startup valuations have been massively growing in recent years.
Blondeau believes that the current economy will incentivise AI startups to focus on the most pressing problems for businesses, such as increasing productivity and reducing costs
“In times of bad economic conditions, successful companies are born and thrive, while weak companies do not survive,” says Blondeau. “We expect the business to business opportunities in AI to be numerous and rewarding.”
One of the most promising AI applications the VC has identified is cybersecurity insurance, where traditional insurers are facing challenges with risk modelling. AI applications in healthcare are also rapidly evolving, partly driven by the Covid pandemic, and partly by labour shortages that result in a need for more automation and digitisation services.
Clara Rodríguez Fernández is Sifted’s deeptech correspondent, based in Berlin. Follow her on LinkedIn.