Some venture capitalists are now acquiring mature businesses and leveraging artificial intelligence to optimize their operations and serve more customers through automation, a strategy akin to private equity roll-ups.
General Catalyst, Thrive Capital, and solo VC Elad Gil are among the firms adopting this approach, with General Catalyst backing seven such companies including Long Lake, a startup enhancing the management of homeowners associations.
Khosla Ventures, known for backing risky technologies, is also considering exploring AI-infused roll-up investments to provide AI startups with access to established clients in industries served by acquired businesses.
Khosla Ventures plans to proceed cautiously with these investments to maintain its strong track record, and depending on the initial outcomes, may consider raising funds specifically for this investment strategy in the future.