AI Capital closes North America fund, preps first Europe fund

The news comes as the firm has achieved a quick turnaround in its sale of Link3d to Materialise.

Colorado-based early growth-stage enterprise AI software investor AI Capital has closed its North America Fund I while it has also launched its North America Fund II, targeted at $100 million. In addition, the firm has begun to prep its European Union Fund I for launch later this year. The final close amount of Fund I was undisclosed.

The fund news comes as the firm has achieved a quick turnaround in its sale of Link3d to Materialise after holding the company for 16 months. The sale reflects a mix of the firm’s later-stage investment thesis, which has been fueling shorter exits, and is expected to generate more than double AI Capital’s target gross internal rate of return.

The firm has thus far operated in “pledge fund mode” as it raised capital for North America Fund I while establishing a track record to reach full capacity. But the covid-19 pandemic validated AI Capital’s investment thesis, which is, to invest in applied AI software companies focused on critical goods and services.

“The planned Link3D exit is a validation of AI Capital’s investment focus on applied AI software companies that focus on the digitization of society and business,” said Neville Teagarden, co-founder and managing partner at AI Capital. The firm focuses on food supply, healthcare, life sciences, manufacturing, energy and public safety.

AI Capital has been planning the launch of its $100 million North America Fund II since before the pandemic. As the world begins to rebound from many of its wide-scale lockdowns, the firm’s new products will hope to coincide with this general rebound in economic activity.

“The burgeoning VC and start-up environment in the EU post-Brexit and emergence of Amsterdam as the region’s premier financial center makes this an ideal time for AI Capital to bring our unique skill set and investment strategy to the European market,” Teagarden said.

With offices in Denver, Boston and the Netherlands, the firm is currently eyeing additional opportunities for North America Fund I, North America Fund II and European Union Fund I.