SparkLabs, an early-stage venture capital firm that has made a name for itself by backing OpenAI as well as a number of other AI startups, including Vectara, Allganize, Kneron, Anthropic, xAI, Glade (YC S23) and Lucidya AI, is preparing to double down on more startups in the space. The VC firm on Tuesday announced the closing of a new $50 million fund, the AIM AI Fund, which will back AI startups from its AIM-X accelerator in Saudi Arabia as well as other AI startups around the world.
SparkLabs’ new fund and its broader investment objectives highlight a larger trend that has been swirling around artificial intelligence for the past few years: An explosion of interest in generative AI, in particular, has led to a proliferation of startups in the space and a flurry of investors looking for the next Open AI — or, at the very least, startups that larger companies might acquire to boost their own AI dominance.
It also shows that opportunities for AI continue to expand beyond Silicon Valley. AIM-X is an AI-focused startup accelerator that SparkLabs launched in Saudi Arabia earlier this year as part of AI Mission, a national initiative to strengthen AI technologies over the next five years.
The past few years have seen a significant rise in AI startups globally: According to a report by Edge Delta, as of March 2024, more than 210 AI unicorns with valuations of over $1 billion have been created. However, despite being a global phenomenon, the report found that the United States still leads the country in founding the most AI startups between 2013 and 2022, with 4,633 startups.
About 35 percent of SparkLab’s new fund will back accelerator participants, while the remaining 65 percent will be aimed at Series A and Series B investments outside Saudi Arabia, according to Bernard Moon, co-founder and partner at SparkLab.
“The accelerator is looking for a minority investment of around 10 to 20 percent in Saudi Arabia and the MENA region,” Moon said. “The majority will be the best AI startups anywhere… I would guess the majority will be in the U.S.”
The average check for accelerator participants will be $200,000, but could go as high as $500,000 in special circumstances, Moon told TechCrunch. Investments in Series A and B will be between $1 million and $5 million, Moon added. The fund aims to invest in 50 to 70 companies in total.
SparkLab did not disclose the names of its limited partners, but Moon said they include a sovereign wealth fund of funds.
The first batch will be presented live at the GAIN Summit (Global AI Summit) in Riyadh next Tuesday, September 10. Moon exclusively told TechCrunch that SparkLabs has already invested in the first batch of 14 startups through its AI fund.
viACT: Hong Kong-based AI video analytics for workplace safety and construction management. IdeasLab: New York-based startup that built an AI solution to analyze body movements without the use of sensors. Ahya: Pakistan-based startup that built AI-powered climate software that measures, analyzes, reports, reduces emissions, and trades carbon offsets. Swirl: An Indian video platform that uses AI to help brands connect with customers on their websites and mobile apps through features like video, user-generated content (UGC) reviews, video ads, and live shopping. Contents.com: An AI content creation platform from Italy Orko: An AI-enabled EV fleet management platform from Singapore Layla: An AI-powered travel startup from Germany Roughneck AI: A San Francisco-based multimodal real-world data platform for deep learning applications Arctech Innovation: A startup spun out of the London School of Hygiene and Tropical Medicine that creates sensor-enabled products to detect pests and diseases using AI OptimHire: An AI-enabled recruitment platform from San Francisco WideBot AI: An Arabic language generation AI platform from Riyadh Orbo AI: A Mumbai-based startup that has built AI-powered tools to help beauty brands increase loyalty, engagement and sales Vyrill: An AI-powered video intelligence and marketing platform from San Francisco Stack Tech Farm: An agritech startup focused on vertical farming from Berlin.
SparkLabs has over 14 funds globally, with two in Saudi Arabia. The company has invested in over 550 startups worldwide.
