September 03, 2024
SparkLabs, a well-known early-stage venture capital firm recognized for its backing of OpenAI and several other AI startups such as Vectara, Allganize, Kneron, Anthropic, xAI, Glade (YC S23), and Lucidya AI, has revealed the completion of a new $50 million fund. The fund called the AIM AI Fund, is dedicated to backing AI startups through the Saudi Arabia-based AIM-X accelerator and other AI initiatives globally.
The creation of this new fund is indicative of broader trends in the AI industry. The emergence of generative AI has led to a proliferation of AI startups and intensified competition among investors in their quest to identify the next breakthrough innovation, similar to what OpenAI achieved. Furthermore, this initiative underlines the expanding horizons of AI prospects beyond Silicon Valley. The AIM-X accelerator, part of the Saudi Arabian AI Mission, aims to drive advancements in AI technology over the next five years.
In recent years, there has been a significant increase in the number of AI startups around the world. According to the Edge Delta report, as of March 2024, there are over 210 AI unicorn companies, each with a valuation of over $1 billion. While this trend is seen globally, the United States maintains its position as the leader in AI startup formation, with a staggering 4,633 startups established between 2013 and 2022.
SparkLabs intends to allocate around 35% of the new fund to support the accelerator’s participants, while the remaining 65% will be allocated to Series A and Series B investments outside of Saudi Arabia. Bernard Moon, co-founder and partner at SparkLabs, highlighted that the accelerator aims to prioritize minority allocations for investments within Saudi Arabia and the MENA region. The fund's primary goal would be to support the most promising AI startups from around the world, with a particular focus on those from the United States.
The typical investment amount for accelerator program participants is around $200,000, which can go up to $500,000 in special circumstances. Series A and B investments will range from $1 million to $5 million, and the fund aims to support between 50 and 70 companies.
SparkLabs did not disclose who its limited partners are; however, Moon shared that they include a government fund of funds. The first batch of startups funded by the AIM AI Fund will be shared at the GAIN Summit (Global AI Summit) in Riyadh on September 10. SparkLabs has already supported about 14 startups from the fund, including:
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viACT – AI video analytics for workplace safety and construction management based in Hong Kong
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IdeasLab – New York-based AI solutions for analyzing sensor-less body movements
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Ahya – Pakistan-based AI climate software for emissions analysis and carbon offset transactions
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Swirl – Indian video platform using AI to improve customer engagement for brands
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Contents.com – Italian AI content creation platform
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Orko – AI electric vehicle fleet management platform from Singapore
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Layla – German AI travel startup
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Roughneck AI – San Francisco-based multimodal real-world data platform for deep learning
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Arctech Innovation – UK-based AI-powered pest and disease detection products
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OptimHire – San Francisco-based AI hiring platform
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WideBot AI – Arabic generative AI platform in Riyadh
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Orbo AI – Mumbai-based AI tool for beauty brands
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Vyrill – e-commerce marketing platform San Francisco-based AI video intelligence
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Stack Tech Farm: Berlin-based agtech specializing in vertical farming
SparkLabs, with over 14 funds globally and two in Saudi Arabia, has invested in 550 startups globally.