SignalFire, an early mover in AI-assisted venture investing, has raised more than $1 billion of fresh capital, bringing its AUM to about $3 billion.
SignalFire is taking advantage of the continued enthusiasm among limited partners and VCs in AI. OpenAI’s record venture round of $40 billion last week propelled AI’s cumulative Q1 deal value to about 58% of all global VC deals, according to new PitchBook research.
The capital is largely earmarked for existing SignalFire funds, though the firm plans to use a portion for additional opportunity funds, CEO Chris Farmer said.
The firm is now “hatching more companies, doing seed and pre-seed” investments, and participating less in Series A rounds and beyond, he said. SignalFire then looks to back growing portfolio companies with $50 million to $100 million checks in later rounds.
SignalFire markets its in-house AI, Beacon AI, as its differentiator, though a growing number of firms have begun to build their own systems. Beacon’s algorithms inform many aspects of SignalFire’s investment processes, from sourcing deals to monitoring portfolio company performance and suggesting operational improvements.
It’s not come cheap. Costs associated with AI have risen dramatically as large language models (LLMs) have become more complex and capable. SignalFire has shelled out about $80 million over the past dozen years for storage, computing power and data, according to Farmer. Some of the costs, though, have “become much more economical” as tech advancements and competition set in, he added.
AI has also been a fixture of SignalFire’s portfolio—the firm has backed startups including Grammarly and Frame.io.
SignalFire’s current LP roster is “institutionally, the biggest base we’ve ever had,” Farmer said.
The firm has landed public pensions, Asian sovereign wealth funds, banks and insurers as new limited partners, he added.
Featured image by J Studios/Getty Images
Learn about our editorial standards.
