Foothill Ventures, a Los Altos, California-based technology venture fund that invests in seed and Series A rounds, has closed its oversubscribed third fund at over $110 million, according to a company executive.
An early investor in the now Nasdaq-listed Chinese self-driving firm WeRide and the US-based popular speech-to-text app Otter.ai, Foothill Ventures held the final close of Fund III to double down on early-stage artificial intelligence (AI) startups, Dr Wang Jinlin, a partner at Foothill Ventures, told Chinese news platform PEdaily.cn.
“It has been many years since we started investing in AI. Following the generative AI boom, we see companies with strong technological strengths, clients, and massive data step up their market shares across different segments of the market,” said Wang.
DealStreetAsia has reached out to Foothill Ventures for more details about its deployment plan for Fund III and the status of its 2021-vintage Fund II.
The venture firm, which has built a portfolio of over 100 companies, makes pre-seed, seed, and Series A round investments in startups across software, life sciences, and deep tech.
It was launched in 2017 as one of the two successor funds to the TEEC Angel Fund, which was led by a group of entrepreneurs and executives who mostly graduated from the prestigious Tsinghua University in Beijing. It operates independently from Tsinghua Silicon Valley Capital (TSVC), the other successor fund to TEEC Angel Fund.
Foothill Ventures was previously known as Tsingyuan Ventures before its rebranding in the summer of 2021 — shortly after closing its second fund at a hard cap of $100 million — to reflect an expansion of its investment scope. The rebranding underscored the firm’s mandate of investing in not only the Chinese diaspora in North America but also North America’s aspirant technology founders from diverse backgrounds.
The plan to focus its dry powder from Fund III on generative AI comes after years of dealmaking in the space. The company is one of the many to ramp up itsforay into AI, spurring competition for investments and making valuations in the sector skyrocket.
Foothill Ventures has picked up stakes in the bottom layer of AI computing infrastructure providers who are building foundation models (FMs). Such examples include AM Batteries, which is at the forefront of developing dry-electrode manufacturing technology for lithium-ion batteries; and TetraMem, which is making AI accelerator chips combing memory and computing functions.
In the middle layer of the AI stack that involves generative AI platforms and software developers, Foothill Ventures has backed the likes of no-code enterprise AI solutions provider Corvic.ai, which allows businesses to transform data into actionable insights; and Jacobi Robotics, a software development platform for robot arms.
Its signature investment in the top layer of real-world generative AI applications is Otter.ai.
Aside from WeRide, which went public on Nasdaq last year, more recently, one of the firm’s investments, Aviva Links, was bought out by Dutch chip giant NXP Semiconductors. This followed many of its other portfolio companies that sold to strategic players in the industry — OmniML acquired by Nvidia, as well as Namocell which was acquired by US-based life sciences company Bio-Techne.
