We’re extremely pleased to report that despite the challenging economic landscape, 2023 proved to be a productive year for GFT Ventures. Venture capital faced numerous challenges, including the collapse of Silicon Valley Bank and First Republic Bank, a stagnant IPO market, and widespread down rounds; the year was a test for the industry. Firms are closing the books on a year in which virtually everything—deals, exits, fundraising—plunged.
Against this backdrop, we not only met but exceeded our expectations. Our accomplishments in 2023 include closing our fund at $140M, well exceeding our $100M target. We invested in three amazing companies identified through our proprietary deal flow pipeline (our most recent investment in Bria is highlighted below). Additionally, we continued working in close collaboration with our portfolio companies, striving to ensure their success and optimize their potential amid economic challenges.
We are already extremely excited about 2024, and fully energized by the fantastic opportunities we are seeing. Developments in AI and data science continue to advance at a rapid pace, and there is now unprecedented global interest in AI and associated startups. The incredibly rapid and widespread adoption of large language models such as ChatGPT, with commercialization / competition from tech industry giants like Microsoft, Google and Meta, had added a significant boost to the overall AI ecosystem. Because we saw this all coming several years ago, we’ve been able to successfully position GFT Ventures as early / recognized AI thought leaders, actively contributing to steering the most significant technological disruptions of our time.
Notwithstanding our overall excitement about current industry developments, not everything we are seeing makes sense to us. For example, we are closely monitoring the significant hype around high-profile AI / LLM (large language model) startups, and their extreme valuations. Although we have been offered some of these opportunities, we have purposely avoided them. Instead, we have chosen to focus on vertical-specific early-stage companies with top-tier teams and deep domain expertise. And we lean in when we discover valuations that are logically aligned with product development and revenue profiles. The trend of “most” startup valuations finally converging to historically "normal" (i.e. attractive) levels continues to provide substantial opportunities for our Fund.
In closing, we strongly believe that what we are now witnessing represents only the initial phase of a multi-decade cycle of progress in accelerated, data-driven computing. This trajectory is anticipated to yield some of the most valuable technology franchises the world has ever experienced.
With Gratitude,
Jeff Herbst and Jay Eum
Founding Managing Partners, GFT Ventures
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