SignalFire Raises $1 Billion for AI-Driven Venture Capital Expansion

SignalFire raises over $1B as LPs embrace data-driven investing | TechCrunch

Thirteen years ago, when Chris Farmer founded early-stage venture firm SignalFire with data analysis at the core of its investment strategy, many were skeptical about the approach -- conventional wisdom dictated that nascent companies didn't have enough data to make investment algorithms effective. "This was a very radical idea, and everyone thought I was crazy," Farmer (pictured above, on the right, alongside CTO and partner Ilya Kirnos) told TechCrunch. A lot has changed since SignalFire raised its first $53 million fund 2015. Today, more venture firms are adopting data-driven strategies in addition to, or sometimes even instead of, traditional VC methods that often rely on networking. Indeed, several venture firms today claim they use AI to source deals, and we even have some private markets-focused companies that sell analytical tools to help all kinds of investors to do "qualitative diligence." Still, Farmer feels SignalFire's approach is unique because, unlike other VCs that use data, his firm integrates AI into every aspect of the investing process -- from identifying promising early-stage startups to helping portfolio companies with recruiting and product marketing. And its limited partners seem to agree that its investment methods will continue to hone its edge. On Monday, SignalFire said that it has secured more than $1 billion in fresh capital, bringing its total assets under management to about $3 billion. This is the firm's largest funding haul ever, exceeding the $900 million it raised two years ago. At a time when many venture firms have been forced to cut back their fund sizes, Farmer says raising such a large fund means that SignalFire is "well out of the proof-of-concept phase and into the established manager phase." The firm's new LPs include giant pension plans, insurable banks, and an Asian sovereign, Farmer said. Indeed, CalPERS, the largest pension fund in the U.S., has reportedly committed $100 million to SignalFire for the first time. According to Farmer, a significant reason some of the world's biggest institutional investors were excited to back in his firm was its focus on seed and pre-seed startups. Given their size and inherent bureaucracy, giant LPs prefer to write large checks to established firms that are expected to persist. "Most seed funds are small. They have a few great funds, and then they're done," he said. "It's very hard for big institutions to back firms like that." Farmer claims that with SignalFire, huge investors can get the best of both worlds: exposure to very young startups at the scale and longevity they need. Although the firm's first point of entry into startups is at the pre-seed and seed stages, its model is to use its giant fund to keep investing in companies as they grow. Of course, this strategy isn't too different from most multi-stage firms, except that most of those investors tend to be more focused on initially backing companies at Series A. "We use our scale to outgun everyone at the seed," Farmer said, noting that SignalFire has invested $100 million into some companies. That kind of capital is not readily available to most seed-focused firms. Farmer said the firm's model has helped it identify trends before its competitors despite having few significant exits. He points to early investments in startups such as Grammarly, which was last valued at $13 billion; Grow Therapy, which last year raised an $88 million Series C from Sequoia; and EvenUp, an AI software for personal injury lawyers that's worth over $1 billion. For this new set of funds, the firm plans to continue investing in sector-specific AI startups, including healthcare and pharma, consumer, infrastructure and developer tools, and cybersecurity. Despite its AI focus, SignalFire is deliberately avoiding companies building the foundation layer for AI models. "I think that many venture dollars going into model builders is at a massive risk. They're getting leapfrogged every couple of weeks by another model. You don't know whether it's defensible," he said. On the contrary, SignalFire tries to invest in companies whose businesses model or tech can't be easily replicated. "EvenUp doesn't have a competitor. I like deep, deep, deep defensibility," Farmer said.

SignalFire Closes On $1B To Invest In Applied AI

Bay Area-based SignalFire, a data-driven venture firm, has raised $1 billion for its fifth and largest fund, which it will invest in applied AI companies. We spoke with founder Chris Farmer on the firm's investment thesis, 12 years on from its founding. "It's a fantastic validation that we have enough proof points in the portfolio and enough scale with companies that we've gotten into very early, that are quite large at this point," he said. The new funds bring SignalFire's assets under management to $3 billion. The firm's prior fund, announced in February 2023, was slightly smaller at $900 million. New limited partners investors include large U.S. public pension funds, an Asian sovereign wealth fund, a major global bank, and a large insurer. Existing LPs include endowment, foundations, family offices and fund of funds. SignalFire is built on its machine-learning platform, Beacon AI. It's "the fabric that stitches the entire firm together," Farmer said. "There are five things that you do in venture, and that's sourcing, picking, winning, adding value and portfolio construction." Beacon AI scans 80 million entities and 650 million people to detect anomalies on traction, to benchmark companies, and to assist with portfolio success -- as a talent recruiting platform and a platform for lead generation. The firm's latest fund will be invested over the course of 2.5 years. SignalFire plans to make around 100 investments at pre-seed with a commitment of $100,000 to $1 million and 60 investments at seed for $1 million to $5 million. In its early-stage fund, the firm will make investment at Series A and B from $5 million to $30 million, mostly in companies in which it invested at seed. The firm's Executive In Residence, or XIR, program, which pairs experienced executives with promising companies new to the portfolio, with a $2 million to $10 million run rate, will invest between $15 million and $30 million. Across its early fund and XIR program the firm plans to make around 30 investments.

SignalFire secures $1B to expand early-stage AI-focused investments - SiliconANGLE

SignalFire secures $1B to expand early-stage AI-focused investments San Francisco-based venture capital firm SignalFire Ventures today announced that it had successfully raised over $1 billion in new capital to bring its total assets under management to approximately $3 billion. Founded in 2013 by Chris Farmer and Ilya Kirnos, SignalFire is best known as an early investor in artificial intelligence startups but also as a venture capital firm that integrates AI into every facet of the venture capital process, from deal sourcing and execution to value creation for portfolio companies. The firm has its own AI platform called Beacon AI, which leverages data from over 650 million individuals and 80 million organizations to identify emerging talent, monitor market trends and assist portfolio companies in building teams and products more efficiently. The new capital will be allocated across SignalFire's Seed, Early, Executive-in-Residence and Opportunities funds. The firm plans to continue to focus on early-stage investments, aiming to partner with founders from the pre-seed stage through Series B. SignalFire's notable previous investments include Grammarly Inc., Grow Therapy Inc., Flock Freight Inc. and Stampli Inc. Grammarly is by far the best known of SignalFire's portfolio companies, providing an AI-powered writing assistant that enhances written communication for millions of users worldwide with real-time grammar and spell-checking, style suggestions and tone analysis. Of the other companies, Grow Therapy connects mental health professionals with patients seeking therapy services, Flock Freight specializes in freight logistics and Stampli provides an AI-driven accounts payable automation platform. "We founded SignalFire in 2013 when most investors dismissed the idea that machine learning could be applied to early-stage investing," wrote co-founders Farmer and Kirnos in a blog post. "That early conviction in AI for venture capital turned into a 12-year head start for our team, which now leads the industry in applying this technology to all aspects of the VC process - from deal sourcing and execution to value creation for our portfolio companies." The $1 billion raised by SignalFire comes after a report from PitchBook-NVCA Venture Monitor last week found that there was only $10 billion in new VC commitments secured during the first quarter of this year, the lowest funding pace since 2016. The decline was attributed to a lack of liquidity from exits deterring limited partners from making new commitments.

AI Startups: SignalFire Raises $1 Billion to Invest in AI Startups | PYMNTS.com

Venture capital firm SignalFire has raised more than $1 billion in new capital to invest in artificial intelligence (AI) startups. It now has a total of $3 billion under management, according to a Monday (April 7) news release. The funding will go toward seed to Series B investments in applied AI. The capital will be deployed through the firm's Seed, Early, Executive-in-Resident (XIR) and Opportunities funds, per the release. SignalFire uses AI and data to find and develop high-growth startups. Through its Beacon AI technology, the firm analyzes data from 650 million professionals and 80 million organizations to guide investment and operational decisions. Beacon AI spots market and talent trends to help SignalFire investors and portfolio companies build their teams and products, the company said. Unlike traditional VCs adapting to AI, SignalFire was built from the ground up with AI in its DNA. As such, the firm said it could spot breakthrough startups "earlier" and accelerate company growth. "AI's next frontier isn't invention, it's implementation," SignalFire partner Wayne Hu said in the release. "With these funds, we'll continue to back founders who transform theoretical AI technology into market-changing solutions." Read more: VC Investors Shrink as Money Goes to Big Tech Startups Nexthop AI, a startup developing advanced networking solutions for cloud clusters, has emerged from stealth with $110 million in funding. The round was led by Lightspeed Venture Partners, with backing from Kleiner Perkins, WestBridge, Battery Ventures and Emergent Ventures, according to a press release. The funds will accelerate product development tailored to meet the growing demands of AI training and inference. Hyperscalers -- cloud computing giants -- are investing billions annually in their GPU and networking infrastructure. They also require highly optimized software and hardware infrastructure attuned to data center build outs, the startup said. "The world's largest cloud providers need a new generation of networking capabilities to keep pace with the demands of AI workloads," Guru Chahal, partner at Lightspeed Venture Partners, said in the announcement. "Nexthop AI is filling a critical gap in this $35 billion market with its deep domain expertise, pioneering technology and customized solutions." The company partners with cloud providers, acting as an extension of their engineering teams to deliver scalable, power-efficient artificial intelligence infrastructure. Read also: Nvidia and xAI Sign On to $30 Billion AI Infrastructure Fund OpenAI has launched OpenAI Academy, a free learning hub for all things AI. The education website is open to all, from all types of backgrounds. The site provides videos, tutorials and other content. People can meet virtually or in person to learn, network and collaborate. Topics include "ChatGPT for Data Analysis," "Advanced Prompt Engineering," and "Collaborating with AI: Group Work and Projects Simplified." There are also tutorials for AI in education, use of AI in personal life and how to use the company's video generator Sora, as well as developer courses. OpenAI is not offering certification or accreditation at this time. All lessons are in English, with more languages to come.

SignalFire raises over $1 billion to invest in AI startups By Investing.com

Investing.com -- SignalFire, a San Francisco-based venture capital firm, has raised more than $1 billion to invest in startups focused on artificial intelligence (AI). The recent funding round boosts the company's assets under management to $3 billion. The firm plans to use these funds to support early-stage startups across multiple funds, particularly those creating AI applications. Chris Farmer, Chief Executive Officer of SignalFire, shared in a statement that their investors recognize the potential of applied AI as a defining opportunity of our time. In a separate interview, Farmer positioned SignalFire as the first venture firm built natively on an AI platform. He remarked that while this seemed unconventional when the firm was established in 2013, not applying data and AI to venture capital now would denote being behind the times. A key element of SignalFire's approach is its proprietary tool known as Beacon AI. This program is designed to perform a range of tasks, from identifying market trends to assisting portfolio companies in finding talent and developing products. Additionally, SignalFire stated that Beacon AI aims to recognize high-potential founders even before they establish their companies.