Join us online at COVERGENCE OCT 22-23
The University Tech/Startup Gap Fund and Accelerator Summit
- 20 in-depth gap fund/accelerator program reviews
- Breakout and group discussions on common challenges
- Corporate and Investor partnering panels
- Networking web-site and associated materials
Seattle’s Allen Institute for Artificial Intelligence is kicking things up more than a notch for AI startups with a $10 million pre-seed fund for its incubator program.
The AI2 Incubator’s fund is backed by some of the nation’s top venture capital institutions, such as Seattle’s Madrona Venture Group, Silicon Valley’s Sequoia Capital and Kleiner Perkins, and New York’s Two Sigma Ventures.
But wait … there’s more: The fund also draws upon high-profile investors and mentors including Tableau Software CEO Adam Selipsky, Drive.ai co-founder Carol Reiley and Amazon Worldwide Consumer CEO Jeff Wilke.
Oren Etzioni, AI2’s CEO and one of the godfathers of the fund, said he expects it to set new precedents for startups on the frontiers of deep learning, computer vision and natural language processing.
“This isn’t a venture capital fund,” he told GeekWire in advance of today’s unveiling. “This is rocket fuel for the AI2 Incubator.”
With the aid of investors, AI2 has already been able to hatch a brood of successful AI-centric spin-outs, starting with Kitt.ai (acquired by Baidu in 2017) and continuing with the likes of Xnor.ai (acquired by Apple this month), Lexion, Blue Canoe and WellSaid Labs. When you round up the seed investments that have been made in the AI2 Incubator’s ventures over just the past few years, the total comes to around $30 million.
“Investors are a crucial piece to building companies that scale quickly,” Etzioni explained in a news release, “and we are excited to create a more formal relationship through this fund.”
The new fund draws upon the AI2 Incubator’s existing system for fostering new ventures through its Entrepreneur-in-Residence program and its Future CEO / Technical Co-founder program. Pre-seed funding will be paid out consultation with AI2’s managers, researchers, mentors and funders, according to a checkpoint system that could result in as much as $800,000 in support for a promising startup, said Bryan Hale, one of the incubator’s managing directors.
“We’ve allocated 12 companies to spin out based on this fund, and that’ll come in the next three years, perhaps a little bit less,” he said.
Hale himself has seen both sides of the startup equation, as president and chief business officer at Seattle-based Resin.io (an IoT platform venture now known as Balena) and as a member of DFJ’s investment team. AI2 brought him on seven months ago to work alongside the incubator’s other managing director, Jacob Colker, and get the fund up and running.
“The next wave of big tech companies are going to be AI-first companies,” Colker told GeekWire. “And we are continuing to work to prove that the AI2 Incubator is one of the best places in the world where entrepreneurs can build the next big AI-first company. This fund, and the people who have participated in this fund, is one more proof point to that effect.”
The idea behind the fund was born last year during a springtime stroll that Etzioni took with Madrona managing director Matt McIlwain in Seattle’s Windermere neighborhood. McIlwain and his colleagues at Madrona have been early backers of AI2 spin-offs including Kitt.ai, Xnor.ai and Lexion.
“We thought about this idea … Once there was an idea that had merit, would it be helpful to have some amount of capital to support that? What would that structure look like? And how would you think about potentially involving some people from outside the region in that as well?” McIlwain recalled.
The aim would be to streamline the process of spinning out promising AI companies.
“When we pushed our thinking through into the fall, and decided we were going to create this $10 million funding mechanism … then we reached out to some of our friends in the venture community that, in the case of Madrona, we’ve worked with closely over the years,” he said.
That’s how Sequoia Capital, Kleiner Perkins and Two Sigma entered the picture. Individual investors also signed on. In addition to Selipsky, Reiley and Wilke, the list features Charlie Bell, senior vice president of Amazon Web Services; Stanford Professor Chris Re, founder of Lattice; Laura Butler, co-founder of a stealth-mode startup; Whitepages CEO Leigh McMillan; veteran computer scientist and entrepreneur Nadia Shouraboura; Isilon co-founder Sujal Patel; University of Washington professor Shwetak Patel, who co-founded Zensi and Senosis;Health; and Techammer.co’s Halle Tecco and Jeff Hammerbacher.
One of the benefits of the funding arrangement is that the whole $10 million will go to startups. McIlwain noted that AI2 is covering the expense of running the incubator — in line with the vision of the institute’s creator, the late Microsoft co-founder Paul Allen, to foster “AI for the Common Good.”
Colker noted that in order to get the funding, entrepreneurs and engineers will have to be accepted into the AI2 Incubator program. But he promised that great ideas for AI startups — and great people who can turn those ideas into reality — will be welcomed with open arms.
“If you are technical, and you are thinking about being a technical co-founder of a startup, it would be irresponsible of you not to call the AI2 Incubator,” Colker said “It’s not a deadline, it’s a rolling admission. At any point in time over the next three years, if amazing technical people have that light bulb go up … this is the place they should come hang out.”