Sapphire Ventures Plans To Invest Over $1b In Enterprise Ai Startups

Sapphire Ventures is an enterprise VC firm making direct investments at the growth and expansion stage
Sapphire Ventures Plans To Invest Over $1b In Enterprise Ai Startups
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A venture capital company, Sapphire Ventures, announced plans to invest more than $1 billion in enterprise firms specializing in AI, demonstrating the significant demand among investors for cutting-edge AI technology.

According to Reuters, the $1 billion in capital will come from Sapphire’s current funds, which have $10 billion under management and around $3 billion available for deployment. Most of the money will be invested directly in artificial intelligence startups, with some going through Sapphire Partners, its limited partner fund, to early-stage venture funds specializing in AI.

According to Nino Marakovic, co-founder and CEO of Sapphire, the company will primarily target business-to-business software providers that “make AI easily accessible” by “leveraging data to predict outcomes better.” In addition, the company will support businesses using AI and machine learning that boost revenue in particular industries, such as healthcare and manufacturing.

As part of the $1 billion initiative, Sapphire also plans to develop an “AI Community” for CEOs and executives of portfolio companies on its Sapphire Communities platform. And to “help drive efficiencies,” Markovic said, it will keep integrating AI into its internal procedures and job tasks.

According to PitchBook data, AI startups continue to do remarkably well compared to the general market, having raised $15.5 billion this year. The buzz around generative AI has fueled this performance. The typical post-money valuation for AI firms has increased 109.8% since last year, and deal volume has remained consistent.

The investments might pay dividends if the best-case scenarios come true. By 2030, AI has the potential to add $15.7 trillion to the global economy, according to a recent PwC analysis, and McKinsey estimates that the generative AI market may generate $4.4 trillion yearly. This assumes that adopting AI won’t result in productivity gains outweighing employment losses, which needs to be clarified.

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Based in Austin, Texas, Sapphire is not the only company making a significant financial investment in AI projects; its portfolio of AI investments also includes Clari, DataRobot, Moveworks, and ThoughtSpot. Corporate arms are also growing more leveraged in the sector in pursuit of massive potential profit.

Salesforce Ventures, the company’s venture capital arm, intends to invest $500 million in startups creating generative AI technology. Recently, Workday increased its current VC fund by $250 million to support businesses in AI and machine learning. A $175 million fund has been created by OpenAI, the firm behind the popular chatbot ChatGPT, to invest in AI startups. Dropbox unveiled a $50 million venture fund with an AI focus last month. And a few weeks ago, AWS declared its intention to invest $100 million in a program to finance generative AI projects.

Meanwhile, Accenture and PwC have disclosed their intentions to invest $3 billion and $1 billion, respectively, in AI.

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