Khosla Ventures Explores AI-Powered Business Roll-Ups
Venture capitalists are shifting their focus. Instead of solely funding startups, firms like Khosla Ventures are exploring acquiring established businesses and enhancing them with AI.
This strategy, similar to private equity roll-ups, involves acquiring mature companies like call centers and accounting firms. By integrating AI, these firms aim to automate processes and serve more customers.
General Catalyst, Thrive Capital, and solo VC Elad Gil are already employing this strategy. General Catalyst has backed seven companies, including Long Lake, which focuses on streamlining homeowners' association management.
Khosla Ventures, known for its early-stage tech investments, is also considering this model. Samir Kaul, general partner at Khosla Ventures, confirmed their interest in exploring these opportunities.
“I think we’ll look at a few of these types of opportunities,” Samir Kaul told TechCrunch.
This approach could benefit AI startups by providing access to large, established clients. This is particularly helpful given the long sales cycles often encountered when selling to enterprises.
However, Khosla Ventures is proceeding cautiously. Kaul emphasized their focus on maintaining a strong return track record.
“The companies we’re looking at are very unlikely to lose money,” Kaul said. “My biggest stress in life is I’m managing other people’s money, and I want to make sure that I continue to be a good steward of it.”
Khosla Ventures plans to test the waters with a few deals before potentially raising dedicated funds for this strategy. They would likely partner with a private equity firm for acquisitions, acknowledging their lack of in-house expertise.
“We wouldn’t do it alone, we don’t have that expertise,” he said.
This new investment model signifies a potential shift in the venture capital landscape, leveraging AI to optimize traditional businesses.
