GFT Ventures – Portfolio Growth and Momentum Continues Throughout 2024
On behalf of the entire GFT Ventures team, we’d first like to take this opportunity to wish everyone a healthy and joyous holiday season. We hope, like us, you will take the opportunity spend time with family and friends, and recharge in advance of the impending new year.
Reflecting on 2024, we are delighted to report that our progress and momentum has both continued, and quite frankly accelerated. With the addition of two new portfolio companies during Q3 (Wethos and Rabot – see the descriptions below), and two more new investments to be formally announced after Q4, our portfolio now stands at 15 active companies. And we are getting close to halfway through the deployment of our Fund I. Like us, many of our portfolio companies are seeing accelerating momentum as well. The corporate/enterprise spending environment which has been arguably slow for a couple of years now is showing encouraging signs of thawing, which should benefit small businesses in all sectors including technology. At the same time, we are extremely excited by the quality of the newest companies (and in particular, the founders) that we are investing in. Just one example – the opportunity to work with a proven/successful industry veteran like Stu McClure of Wethos (formerly Cylance) was one we moved on quickly. And we are delighted that he chose us as his lead investment partner for his newest venture.
As we stated during our Annual Meeting in October, we believe that AI and data science will continue to transform almost every industry and every business. What started as facial and image recognition was quickly followed by generative AI (i.e. in our view the second “big bang”) which has now enabled a massive ecosystem of AI-created assets and content. We’re anxiously awaiting what we think will be the third “big bang”: unstructured data-driven, predictive AI which recognizes patterns from the huge troves of data that currently remain unleveraged. In this regard, as we envision the future of enterprise AI, we feel more strongly than ever that the best approaches are those that involve responsible and ethical uses of AI that do not derive their primary value from unlicensed third-party data or other content.
It’s not all great news though, as arguably the venture capital landscape remains somewhat challenging. In fact, the industry is facing a trifecta of issues: a relative lack (compared to just a few years ago) of exits and cash distributions to investors, declining valuations (or “rightsizing”) from the highs of 2020-2021, and a slowdown in investor capital flowing back into venture funds. This is a cycle that we spotted early on and remain well positioned to navigate. Specifically, while there is no shortage of “noise” and distraction in our industry, we’ve stayed focused on investing in companies that align with our stated theses, as well as our stage, size, geographic and valuation criteria. And we’ve patiently adhered to our originally planned investment pace. Based on the above, we are delighted to report that we have significant dry powder remaining and are extremely excited about the opportunities ahead in our proprietary deal pipeline.
The bottom line: we remain fully committed to our original strategies around AI, data science, and robotics. Although some pundits are now talking about an “AI bubble”, we firmly believe that what we're witnessing today is still just the tip of the iceberg in a multi-decade trajectory of data-driven computing progress. This trajectory is poised to give rise to some of the most valuable technology franchises the world has ever seen.
With Gratitude,
Jeff Herbst and Jay Eum
Founding Managing Partners, GFT Ventures
Read the rest of the newsletter here
Comments