The information: Seattle-based enterprise capital agency Flying Fish landed $70 million for its second fund to put money into extra early-stage machine studying and synthetic intelligence startups — each in its yard and throughout the nation.
Why it issues: Flying Fish raised $37 million for its first fund, and is almost doubling that for the second. It’s extra capital accessible to tech startups based mostly within the Pacific Northwest, although the agency is now increasing its geographic attain.
Casting a wider internet: “We’ve actually turn into generally known as a kind of specialised funds in a very popular sector,” stated Heather Redman, managing associate at Flying Fish. “We began getting a variety of inbound deal movement from different components of the nation.”
Redman stated she anticipated Flying Fish to finally broaden past the Pacific Northwest however that the pandemic accelerated the timeline and “made all people take into consideration geography differently.”
The 9-person agency solely made one funding exterior of the area for the primary fund. It has already made a number of investments from the second fund on the East Coast, however it’s going to nonetheless dedicate round 70% of the recent capital for Pacific Northwest corporations. “We do nonetheless view this because the preeminent house of AI and ML,” Redman stated.
Pattern watch: Flying Fish is just not the one Seattle agency trying elsewhere for investments. Madrona Enterprise Group, one of many area’s largest and oldest corporations, launched an “Acceleration Fund” in 2019 to put money into corporations in different areas.
Redman stated the development isn’t an indication that native buyers can’t discover sufficient offers down the road, however quite a sign of Seattle’s energy as a world tech hub and as a “nice participant on the world stage.”
“You might be at all times going to need to put money into your individual yard, as a result of that’s going to be your stronger community,” she stated. “However you’re going to speculate elsewhere, too, since you consider that you simply’re the perfect investor for each single founder. And I would like us to begin fascinated by Seattle in that approach.”
AI growth: Buyers are betting large on synthetic intelligence startups, which raised a report $66.8 billion final yr, up 108% from the year-ago interval, CBInsights reported.
The sector is seeing tailwinds from macroeconomic developments reminiscent of employee shortages, which drives demand for AI-powered automation, Redman stated. And that will bode nicely for survival throughout a potential tech industry downturn and broader forces together with inflation.
“Possibly we don’t want a brand new scorching factor, however we do want a factor that replaces a employee that I can’t rent,” Redman stated.
Flying Fish invests, on common, $2 million for seed rounds and $1 million for pre-seed rounds. It expects round 25 investments out of the brand new fund.
The group: Flying Fish has 4 managing companions, together with:
- Redman, who held management positions at corporations together with Indix, Atom Leisure, and Getty Photos.
- Geoff Harris is a Microsoft vet with a background in pure language processing, machine studying, and digital commerce.
- Frank Chang additionally brings experience in machine studying from corporations reminiscent of Amazon, Audible, Microsoft and Reef Applied sciences.
- Adriane Brown, former president and COO at Mental Ventures, and president of Honeywell Transportation Methods. Brown is on the boards of eBay, Axon, American Airways, and KKR & Co.
