Key Takeaways:
Two veteran venture capitalists are launching a new firm to invest in the artificial intelligence sector, testing institutional appetite for new funds in a difficult market.
Two of venture capital’s seasoned investors, Arif Janmohamed and Trevor Oelschig, have launched Duration Ventures, a new firm seeking to raise $375 million for its debut fund targeting early-stage enterprise artificial intelligence startups from chips to applications.
"Our founders are building real solutions to help people thrive in this time of major societal and economic upheaval," said Ashley Bittner, Managing Partner at Kalos Ventures, a firm that recently closed an oversubscribed inaugural fund, highlighting the thesis-driven approach gaining favor among investors.
The Palo Alto-based firm enters one of the most difficult fundraising markets for first-time funds in recent history, with just 106 such funds raised in the U.S. last year, a decade-low according to PitchBook-NVCA data. However, the founders' track records include Janmohamed's successful investments in cybersecurity company Netskope and travel platform Navan, both of which went public, and Oelschig's board role at e-commerce platform Shopify.
The formation of a large, specialized fund by experienced VCs indicates strong investor confidence in the AI sector, likely leading to increased investment and competition among early-stage AI startups. The success of their fundraising will serve as a key barometer for the venture market's liquidity and willingness to back new managers, even as limited partners show a preference for established, multi-billion dollar funds.
Janmohamed, an 18-year veteran at Lightspeed Venture Partners where he backed enterprise software businesses, is transitioning to a venture-partner role to build the new firm. His notable investments include leading the seed round for enterprise-search company Moveworks, which was acquired by ServiceNow for $2.85 billion last year. Oelschig spent nearly a decade as a managing director at General Catalyst after joining from Bessemer Venture Partners, investing in startups like Fivetran and Tractian.
The two have known each other for over two decades since business school but have not previously invested together, according to people familiar with the matter.
The launch of Duration Ventures comes as the venture market faces a significant contraction in fundraising for new managers. Limited partners have become more selective, concentrating capital in larger, more established firms. This makes the $375 million target for Duration's debut fund an ambitious test of the market's appetite for new, specialized managers, even those with strong pedigrees.
However, thesis-driven funds are gaining traction. Kalos Ventures, another new firm, recently closed an oversubscribed $78.8 million fund to invest in technology addressing infrastructure gaps. This suggests that even in a tight market, LPs are willing to back new managers with a clear and compelling investment focus, particularly in high-growth sectors like AI.
This article is for informational purposes only and does not constitute investment advice.
