Betaworks’ third fund closes at $66M to invest in early-stage AI startups

New York City-Based Betaworks Closes $66 Million Fund III for Early-Stage AI Investments

Betaworks, a well-known venture studio in New York City, recently announced the closure of its $66 million Fund III, dedicated to supporting early-stage AI companies. The firm has a strong track record in AI investments, dating back to at least 2016 when it started investing in this sector. Through its investment program Camp, Betaworks has successfully backed companies like Huggingface and Granola.

According to Jordan Crook, a partner at Betaworks and former JS employee, the focus of the new fund will be on agents, native AI interfaces, and application-layer AI. Crook emphasized that the fund will continue to support straight seed investing and the Betaworks Camps program, targeting at least 25 pre-seed to seed investments and 50 investments into startups through the Camps program. So far, Betaworks has completed around 37 deals with an average check size of approximately $500,000.

Crook acknowledged the current fundraising climate, describing it as “frothy” for startups and “spiky” for funds. Despite the challenges, Fund III attracted many of the firm’s previous limited partners for reinvestment. Crook mentioned the difficulties faced in fundraising due to the fund’s expansion but expressed gratitude for the continued support from investors.

Betaworks has a history of successful fundraising, having raised $46 million for Fund II in 2020 and $48 million for Fund I in 2016. Established in 2008 as a venture studio, Betaworks has become a prominent player in the New York City tech scene, launching the Betaworks Camps program in 2016. The firm’s portfolio includes notable investments in companies like Tumblr and Kickstarter.

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