AV8 Ventures has closed on €150 million (about $170 million) for its debut early-stage venture capital fund to invest in seed and Series A startups in the U.S. and Europe focused on the “machine-enabled future.”
Allianz, a German insurance and asset management business, is the fund’s sole backer.
Headquartered in Palo Alto and London, the new effort is led by George Ugras (pictured above, right), the former head of IBM Ventures, and Miles Kirby (pictured above, left), previously a managing director at Qualcomm Ventures in Europe. The pair have brought on two full-time partners and five additional venture partners to hit its goal of 10 investments per year.
The AV8 team brings together technical backgrounds and strong business acumen, Kirby told TechCrunch: “That’s something fairly unique about us, we can really help the entrepreneurs as opposed to just investing and sitting back. Having been through this a few times, we can really help through the journey.”
“We think of ourselves as builders versus transactors,” Ugras, who began his career as an astrophysicist, added. “Quite often in venture you’ll notice investors get perked up around transactions, but the magic happens in-between rounds.”
Though AV8 is backed by a corporate, it is indeed not a corporate venture capital fund. Ugras, in a conversation with TechCrunch, compared AV8 with Sapphire Ventures, an early-stage fund supported by SAP. Sapphire was formerly known as SAP Ventures but rebranded as Sapphire in 2014 to reinforce its status as a firm independent from the German corporation.
AV8 has a general focus on digital health, big data and artificial intelligence, mobility and enterprise tech. Having been investing out of the fund for roughly one year already, the team has deployed capital to seven companies to date. Their portfolio includes Locomation, an autonomous trucking startup spun-out of The Robotics Institute at Carnegie Mellon University; weather forecasting and climate monitoring business PlanetIQ; and Alpha Medical, a women’s healthcare platform.
In an era of venture capital when one or two $100 million-plus funds launch each week, Ugras and Kirby say it’s their lack of vanity that sets them apart.
“What I noticed in this era with hundreds of funds, especially in the early stages, is there’s still a need for people who know how to build businesses,” he said. “Anyone can structure a term sheet and write a check, but at the end of the day, we are really conduits between limited partners, who trust us with their precious capital, and entrepreneurs, who trust us with their precious dream. Creating this aura of celebrity has created an imbalance with these relationships, which has caused a lot of issues with behavior in the industry.”
“What it’s all about is helping the portfolio companies do well, they are the ones doing the heavy lifting,” Kirby concluded. “At the end of the day, it’s the entrepreneurs that are driving it.”