How Citi Ventures Backs AI Startups It Thinks Can Transform Its Business

Editor’s note: This article is part of Crunchbase News’ ongoing series interviewing active investors in the artificial intelligence space. Read previous interview happy, Battery Ventures, universal catalyst, Bessemer Venture Partners, accelerator, Insight partners, Index Ventures, Sequoia Capital, Article 32, M12, Sapphire Ventures, Bain Capital Ventures, Menlo Ventures and Costanoa Ventures also Highlights from these stories in 2023.

In the final article in our series on AI investors in 2024, we interviewed Citi Venturesone of the More active corporate venture investors Over the past decade, its investment focus has been on artificial intelligence.

“In all my time in corporate investing over the past 20 years, we’ve never seen anything so disruptive,” Matt CarbonaraManaging Director of Citi Ventures, the venture capital arm of the banking giant Citigroup.

He said that for artificial intelligence, the customer side is more motivating than any new technology, and many Fortune 2000 companies are exploring use cases.

Smart entrepreneurs naturally look for opportunities to innovate and disrupt, while investors look for companies with big results. All three voters were unanimous, he said.

“We have to try to move quickly and try to get in front of these companies and build relationships before they raise money,” Carbonara said of the competition among investors in artificial intelligence. “It’s a very active space. “

The firm invests in companies that can help Citigroup transform its business.

He said that artificial intelligence is a horizontal technology. “Coding, compliance and governance, data quality, employee productivity and knowledge management — these are areas we’ve been really thinking about,” Carbonara said.

Citi’s wealth management business could also benefit from automation.

Carbonara said Citigroup has 40,000 developers, nearly a quarter of its employees. “For such a large group, even a 10% increase in productivity would make sense for Citi,” he said.

AI companies invested by Citi Ventures so far include knowledge management companies Glenn; writerwhich provides content generation services to companies organized by industry vertical; Compliance Launch Enom;Developer Productivity Launched Poolside;and Galileoused to monitor, debug and improve the accuracy of AI models.

Two of Citi’s portfolio companies were also acquired this year. Lexiana company that uses artificial intelligence for contract workflows, was acquired file signature $165 million in cash, and davolowhich takes data from PDFs and other files and puts them into a vector repository, is created by snowflake The amount was undisclosed.

active enterprise

Citi Ventures ranks among the top 10 leading corporate venture capital firms investing in artificial intelligence-related companies, according to Crunchbase data. Its team of 18 is spread across the Bay Area, New York, London, Singapore and Israel. The firm has approximately 120 active portfolio companies.

According to an analysis of Crunchbase data, other corporate venture capital firms actively investing in artificial intelligence include Google Ventures, Samsung NEXT, Salesforce Ventures 1, venture capital firm (This is part of NVIDIA), Databricks Ventures, M12 (Microsoftventure funds), Intel Capital, Bloomberg Beta and OpenAI Startup Fund.

In addition, Microsoft, Amazon and letter Invested billions of dollars directly in foundation model companies Open artificial intelligence and Anthropic selection The most money is raised from these investors.

Adoption of Artificial Intelligence

Most of Citi Ventures’ portfolio companies integrate artificial intelligence to some degree, Carbonara said. While some companies have added generative AI to some extent, most interest is in the native AI category, where app companies are starting to make real revenue, he said.

venture capitalist Sapphire Ventures An article recently published estimated that 47 or more native AI application companies Revenues exceed $25 million.

Carbonara agrees that adoption of applied AI is starting to take off: “They’re pre-built and they’re easier. Businesses are still learning. It’s a new skill set. How do you deploy it? How do you get the accuracy you want? This It’s an iterative process rather than someone coming to you with a pre-baked pie.

Within Citi’s portfolio, Carbonara is tracking companies with meaningful adoption.

“We see this with Glean. We see this with writers. App companies are some of the faster-growing companies that are making meaningful revenue and you say, ‘Hey, this is a real business, is going to be a big business. “”

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Illustration: Dom Guzman