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Google-Backed AI Investors 'Nobody Took Seriously' in 2017 Raise $220 Million
Gradient went from being compared to quantum computing niche to seeing 1,500 2,000 AI companies per year.
Gradient went from being compared to quantum computing niche to seeing 1,500 2,000 AI companies per year.
Gradient, the venture firm backed by Google that was founded in 2017 to invest in AI companies, has closed a $220 million fifth fund—a sign of how dramatically the AI investment landscape has shifted.
In 2017, when Darian Shirazi and Zach Bratun-Glennon launched Gradient with Google's backing, AI was a hard sell. "I'd say I was at Gradient, and people would say 'oh, the AI thing. I haven't done that. Are there AI startups?'" Shirazi told Fortune. Everyone was focused on crypto and ICOs.
The firm was compared to quantum computing—niche, unproven, something that didn't resonate with LPs outside Google.
Now, the tables have turned. Post-ChatGPT, Gradient sees 1,500-2,000 companies per year that fit its thesis, up from just 100 per year between 2017-2021.
Gradient has backed Lambda, Oura, Sona, Writer, Airspace Intelligence, and Krea. Exits include CentML (acquired by Nvidia for reportedly $400M+), Prepared (acquired by Axon), and Streamlit (acquired by Snowflake for $700-800M).
The firm has also shifted its structure: Google remains an LP, but Gradient took on outside LPs for the first time, and Shirazi and Bratun-Glennon now own the management company.
One notable stance: Gradient won't fund foundational model contenders. "Large seed rounds that are $100 million-plus or one billion-plus… I've never seen a startup raise more than, say, $10 million in a seed round and be successful," said Shirazi.
Primary source: Fortune