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This week, I explore how one VC is feeling about a big chunk of her portfolio pivot into AI. And I have some updates on my new fixation: internal developer portals. — Anna
50% AI
TechCrunch+ recently noted a paradox: “VCs love to talk about AI, but they aren’t writing as many checks as you might think.” Maybe because they don’t need to make new investments to own shares in AI companies.
“Lots of existing investments started pivoting into AI — roughly two companies every single month,” Day One Ventures founder and general partner Masha Bucher told me.
For instance, email app Superhuman is one of the startups in her portfolio that recently ventured into AI.
On one hand, this type of exposure to AI can be good news for investors. When leveraged as a tool applied to various business categories, AI can increase the efficiency of the companies they invested in.
For example, a consumer company in Day One’s portfolio went from needing 20 salespeople to nine in only two months. “So obviously, it’s good for the revenue of the company [and] for the runway,” Bucher said.
On the other hand, there’s the question of how much exposure is too much. “Maybe by the end of the year, [our portfolio] will be 50% AI,” Bucher added, noting that this comes with risks.
“If on average, 10 out of 1,000 startups survive, I think [in AI] it will be two out of 1,000 startups,” she predicted.
Her goal for this category is to invest in companies that have both business acumen and a deep understanding of technology. “The biggest advantage is combining both.”
Companies that are already in her portfolio have a leg up compared to new ones: “As we’re looking at new AI businesses, we try to project who in our portfolio could be pivoted into something similar to that.”
Could this be one of the reasons why we are not seeing more AI investments this year? That’s a hypothesis worth considering.
Brains on Cortex
A couple weeks ago, I wrote about internal developer portals as a tool to alleviate the cognitive load of developers. But one of the players in this category, Cortex, wants to take things one step further, and it just raised a $35 million Series B round to do so.
Cortex co-founder and CTO Ganesh Datta noted that “increasingly, engineering leaders are pushing their developers to care more about the quality of their code and following standards,” TechCrunch’s Frederic Lardinois reported. Because of this, the startup is now building more tools to help developers manage more of their ecosystem from within the developer portal.
City Spotlight: Atlanta
On June 7, TechCrunch is going to (virtually) be in Atlanta. We have a slate of amazing programming planned, including the mayor himself, Andre Dickens. If you are an early-stage Atlanta-based founder, apply to pitch to our panel of guest investors/judges for our live pitching competition. The winner gets a free booth at TechCrunch Disrupt this year to exhibit their company in our startup alley. Register here to tune in to the event.
In love with Chick-fil-A
I’m not sure I could eat there seven times a day, but after listening to a recent podcast episode with Chick-fil-A’s chief architect, Brian Chambers, I’d happily spend more time learning about the restaurant chain’s approach to tech.
One of the responsibilities of Chambers’ team is to define which capabilities need to be built in order to be shared across the organization, such as — you guessed it — an internal developer portal.
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