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SparkLabs — an early-stage venture capital firm that has made a name for itself for backing OpenAI as well as a host of other AI startups such as Vectara, Allganize, Kneron, Anthropic, xAI, Glade (YC S23) and Lucidya AI — is gearing up to double down more startups in the space. The VC firm announced Tuesday that it has closed a new $50 million fund, AIM AI Fund, which will back AI startups out of its own AIM-X accelerator in Saudi Arabia as well as other AI startups across the globe.
SparkLabs’ new fund and its wider investment aims underscore the bigger trends that have swirled around artificial intelligence for the last few years. The explosion of interest in generative AI in particular has led to a surge of startups in the space, as well as a rush of investors looking for the next Open AI — or at the least, a startup that a bigger company might snap up as it looks to sharpen its own AI edge.
It also points to how the AI opportunity continues to widen beyond Silicon Valley. AIM-X is an AI-focused startup accelerator that SparkLabs launched earlier this year in the kingdom as part of its AI Mission, a national initiative to bolster AI technology over the next five years.
There has been a significant increase in AI startups on a global scale over the past few years. As of March 2024, more than 210 AI unicorns, valued at over $1 billion, have emerged, per the Edge Delta report. Yet despite it being a global phenomenon, the U.S. overall still leads the pack for founding the most AI startups between 2013 and 2022 with 4,633 startups, according to the report.
About 35% of SparkLabs’ new fund will support accelerator participants, with the remaining 65% targeted at making Series A and Series B investments beyond Saudi Arabia, according to co-founder and CEO of SparkLabs Bernard Moon.
“The accelerator will seek a minority allocation for Saudi Arabia or MENA investments, about 10%-20%,” Moon said. “The majority will be just the best AI startups regardless of location… I assume the majority in the U.S.”
The average check size for accelerator participants will be $200,000, but it can go up to $500,000 in unique situations, Moon told TechCrunch. The Series A and Series B investments will be between $1 million and $5 million, Moon added. It aims to invest between 50 and 70 companies in total from the fund.
SparkLabs did not name its limited partners, but Moon said its LPs include a government fund of funds.
Its first batch will be announced live at the GAIN Summit (Global AI Summit) in Riyadh next Tuesday, September 10. Moon exclusively told TechCrunch that SparkLabs has already invested in 14 startups, the first batch, via the AI fund:
viACT: a Hong Kong-based AI video analytics for workplace safety and construction management. IdeasLab: a New York-based startup that has built AI solutions for analyzing body movements without using sensors Ahya: a Pakistan-based startup that has built an AI-powred climate software for measurement, analysis, reporting, reduction of emissions, and transacting carbon offsets. Swirl: a video platform in India that uses AI to help brands connect with customers on their websites and mobile apps through features like videos, user-generated content (UGC) reviews, video ads, and live shopping. Contents.com: an AI content creation platform in Italy Orko: a Singaporean AI-enabled EV fleet management platform Layla: an AI-powered travel startup in Germany Roughneck AI: a San Francisco-based multimodal real-world data platform for deep learning applications Arctech Innovation: a startup that spun out from the London School of Hygiene & Tropical Medicine, using AI to create sensor-enabled products for the detection of pests and diseases OptimHire: an AI-enabled recruitment platform in San Francisco WideBot AI: an Arabic generative AI platform in Riyadh Orbo AI: a Mumbai-based startup that has built an AI-powered tool to help beauty brands boost loyalty, engagement, and sales. Vyrill: an AI-powered video intelligence and marketing platform in San Francisco Stack Tech Farm: an agritech startup that specializes in vertical farming in Berlin.SparkLabs has more than 14 funds across the globe and two funds in Saudi Arabia. It has invested in over 550 startups globally.
