Berlin-based VC Fly Ventures has closed a $41 million fund that uses AI and machine learning to find young startups to invest in.
The fund is led by Stephan Seyboth, Gabriel Matuschka, and Fredrik Bergenlid, who all have experience in other VC firms or major tech companies like Google. Backers of the fund include Korelya Capital, the European Investment Fund, and a number of family offices in Europe and the US.
Fly Ventures has invested in 11 companies so far, contributing to rounds between $1 million and $2.5 million, such as Finiata and Inato. It has built its own AI software to identify early stage startups that it can invest in at the seed and pre-Series A rounds. According to the firm, around 60% of the startups it speaks to have been approached cold.
The firm believes this approach of evaluating potential investments can help bridge a funding gap in Europe at the seed stage where founders spend too long trying to raise early stage cash rather than building their product.
It will invest in around 30 startups in total in verticals like fintech, recruitment, mobility, and health.
“Venture capital investors preach innovation and disruption and tell us that software is eating the world yet when it comes to their own industry they believe that it is exempt. We believe there are significant opportunities for automation here as well,” commented Seyboth (pictured, left).
“We think that artificial intelligence will remove the mundane parts of many jobs and that includes sifting through vast numbers of leads, to find appropriate startups to invest in at seed stage,” he said.