Betaworks Raises $66M Fund to Back Early-Stage AI Startups
▼ Summary
– Betaworks closed its $66 million Fund III to invest in early-stage AI companies, focusing on agents, native AI interfaces, and application-layer AI.
– The firm has a history of AI investments since 2016, backing companies like Huggingface and Granola through its Camp program.
– Fund III aims to make at least 25 pre-seed to seed investments and 50 Camp investments, with an average check size of $500,000.
– Despite a challenging 2024 fundraising environment, many of Betaworks’ previous limited partners returned to invest in Fund III.
– Betaworks, founded in 2008, has grown into a key NYC tech player, with past funds of $46 million (2020) and $48 million (2016), and notable investments in Tumblr and Kickstarter.
New York venture firm Betaworks has secured $66 million for its latest investment fund, targeting promising artificial intelligence startups at their earliest stages. The capital will fuel bets on emerging AI technologies, with a particular emphasis on intelligent agents, next-generation interfaces, and practical applications of artificial intelligence.
Since 2016, Betaworks has actively supported AI innovation through initiatives like its Camp accelerator program, nurturing high-profile companies such as Hugging Face and Granola. Jordan Crook, a partner at the firm, explained that the fresh funding will expand both direct seed investments and structured accelerator support. The goal is to back at least 25 pre-seed to seed-stage ventures while funding another 50 through the Camp initiative.
So far, the fund has already deployed capital in roughly 37 deals, with typical investments hovering around $500,000 per startup. Crook acknowledged the current fundraising climate as volatile, describing it as “frothy” for founders and “spiky” for investment firms. Despite these challenges, Betaworks successfully attracted repeat commitments from many of its existing backers.
This latest fund marks the firm’s third major investment vehicle, following a $46 million Fund II in 2020 and a $48 million Fund I in 2016. Originally founded as a venture studio in 2008, Betaworks has grown into a cornerstone of New York’s tech scene, with a portfolio that includes industry-defining names like Tumblr and Kickstarter. The firm’s continued focus on AI reflects its belief in the technology’s transformative potential across industries.
(Source: TechCrunch)
