U.S. venture capital giant General Catalyst has announced a fresh $8 billion in funds as it looks to ramp up its investments in multi-sector early-stage startups globally, with a specific focus on the U.S., Europe, and India.
The capital constitutes around $4.5 billion for its “core VC funds” which spans seed and growth equity funding, while $1.5 billion is earmarked for its so-called “creation strategy” which is focused on helping repeat or “proven” founders build new companies. An additional $2 billion is for “separately managed accounts” — which are typically special investment vehicles created for a single institutional investor.
“As a global investment company that seeks to partner with the world’s most ambitious entrepreneurs to drive transformation, resilience, and applied AI, we believe this capital will turbocharge our investment theses across AI, defense and intelligence, climate and energy, industrials, healthcare and fintech,” General Catalyst CEO and managing director Hemant Taneja (pictured above), wrote in a blog post today.
Founded in 2000, General Catalyst has backed some of the biggest U.S. technology startups, including Airbnb, Instacart, Snap, Kayak, Stripe, and HubSpot, though it has backed numerous international companies too such as Deliveroo in Europe. More recently, General Catalyst has pursued global growth through merging with local entities, including La Famiglia in Europe last year and, more recently, Venture Highway in India.
General Catalyst now has around $25 billio in assets under management.
Continuatio
Today’s announcement comes shortly after TechCrunch reported that General Catalyst was working on a “continuation” fund worth up to $1 billion, a mechanism through which it would continue to hold and invest in its portfolio companies beyond what would be a typical VC fund timescale — however, there is no word on whether that is still something under consideration.
Elsewhere, TechCrunch recently reported that General Catalyst is gearing up to make its first investment in Saudi Arabia.
General Catalyst’s latest funds are among the largest to emerge from a U.S. VC firm since Tiger Global’s $12.7 billio tranche more than two years ago, though it dwarves the $2.3 billio raised by Index Ventures earlier this year, as well as Andreessen Horowitz’s $7.2 billio .
Speaking exclusively to TechCrunch, Jeannette zu Fürstenberg, who now heads General Catalyst’s European business, said that 25% of the $8 billion raised would be allocated to Europe, across all its various strategies.
“The core thesis is to hone-in on talent at the earliest stages. We are a global transformation company with early-stage investment at its core,” she said in a call with TechCrunch.
Following the merger of General Catalyst and her VC firm La Famiglia last year, she said the company wants to “double click on pre-seed and seed as one core bucket, where we want to drive all the platform capabilities and all the capabilities towards founders.”
In relation to how it plans to execute its “creation” strategy, she said the plan is to partner with large companies which are, for instance, “looking to embed AI and looking to build a product… We are looking to co-develop and co-hatch products together with them… We’ve already done that with Fever Energy, a Scandinavian climate tech company, because that will require a sort of more hybrid capital approach down the line.”
She fleshed this out further, saying General Catalyst has engaged in what it likes to call “roll-ups”: “We’ve embraced different vertical sectors and functions from a company perspective.” This includes Crescendo, a call center software that has AI embedded in it.
As a firm, she said General Catalyst is doing things “the other way around.” That means “building the tech stack… and then reaping the whole benefit from going full stack” by embedding AI in an investment. “We are doing a similar playbook in Europe, where our existing network blends with that strategy and also blends with the talent ambition that we have here,” she said.
General Catalyst is also honing in on two core themes: what she calls applied AI and “global resilience: “Our belief system is that AI, at the core, is not a disruptive technology. It doesn’t give you new distribution avenues. It basically gives you a transformation angle into existing categories.”
This would translate into applying AI into sectors such as manufacturing, or supply chains.
“If you look at Europe, then the sort of benefit we can really derive from AI comes down how it intersects with many of these vertical strengths that we have in Europe,” she said.
“I think it’s the first time that we’re seeing a technology that actually doesn’t disadvantage [Europe] straight out of the gate. AI really is something that can be an enabler and a huge accelerant to the existing strengths that we have.”
On global resilience, she said that in the wake of destabilizing issues such as the pandemic, wars, and the energy crisis, nations “cannot afford to be at the mercy of others… We don’t want to rely on China for the majority of the stuff that we cannot replicate here, right?”
“For example our shortage of antibiotics or of vaccinations during the pandemic,” she continued. “I think there is a very strong insight that we need to come closer to re-owning these core verticals. And this can be extended towards energy systems, defense etc. These are critical to us being able to maintain societies as they are, and maintain our sovereignty to a very large degree. So what are the fly-wheels we can activate, where can we back founders, connect them to established industry partners, and help them embed that.”
She also singled out General Catalyst portfolio company Helsing as an example of this, which has now entered partnerships with Airbus and Saab.
“They’re in partnership with some of the largest European defense primes,” she said. “And there’s a strong intersection that is driven to really bring the potential of AI into the sectors that we will think is key to resilience. AI and global resilience as two core themes are really coalescing to a very large degree.”