Calibrate Ventures, a four-year-old early-stage venture capital firm backing startups leveraging artificial intelligence and automation, debuted its second fund, a $97 million vehicle that is about 25% higher than its previous fund.
With Calibrate Fund II, the firm has $175 million in assets under management, co-founder and managing partner Jason Schoettler told TechCrunch.
The firm raised $80 million for its first fund in 2018. Since then, the firm invested in 17 companies, most notably Built Robotics, Embodied, FarmWise, Soft Robotics, Talage and TruckLabs. Together, those companies raised a collective $425 million.
A few investments have already been made from Calibrate Fund II, but they are unannounced at this time, Schoettler said.
With capital flowing freely lately, Schoettler, who previously worked at Shea Ventures, where he met co-founder and managing partner Kevin Dunlap, shared some insights on what it takes to win deals these days.
“We think domain expertise and experience go a long way to winning deals,” Schoettler said. “For example, having a network and infrastructure to help get introductions to customers or build out the board and strategic financing.”
Dunlap, a mechanical engineer who previously invested in companies like Ring and Solar City, believes that companies like Ring or portfolio company Soft Robotics would not exist 10 years ago and make economic sense. It is all possible now that sensors are cheaper and computing power has increased, he added.
“We have large strategics investing in our companies alongside us, and sometimes after us, which is good,” Dunlap said. “It means we understand the sales cycle and revenue model to generate large returns. We lead with the ability we have to help them sell on the customer and technology side. Our founders also can lean on each other because they are doing similar things, but in different verticals.”
They also say this is lining the firm up to be aggressive as it sees interesting activity around AI and automation. In particular, Schoettler noted that with COVID last year, activity has gone from “zero to warp speed over the past 12 months,” and the firm has been focused on building out an infrastructure around the team and this new fund is its successful fundraising to set it up.
As such, Schoettler and Dunlap grew their team in 2021 to meet that demand, adding three new venture partners, including Aimée Leifer, Paolo Pirjanian and Daniel Murray, hired Carrie Zawistowski as vice president of portfolio finance and brought on a firm to manage public relations and marketing for its portfolio companies.
Meanwhile, the firm invests across a wide range of industries like education, healthcare, logistics, law, financial services, manufacturing and transportation.
Having mainly focused efforts around computer vision, AI, machine learning and to some extent, robotics, Schoettler and Dunlap say they are often pulled into areas where there are labor balance issues, like agriculture and construction, where labor is hard to find because people are not going into these positions.
Dunlap estimates that some $500 billion will be spent in the next several years on AI and AI implementation. He called out chicken producer Tyson, which announced in November that it would be investing $1.3 billion in automating its meat plants over the next three years. Tyson Ventures is also an investor in portfolio company Soft Robotics.
“We expect real adoption for machine learning and advanced robotics in five to 10 years,” Dunlap added. “Automation is great for anything dirty, dull and dangerous, where it is hard to find people who are excited about taking those opportunities.”