Investment firm SparkLabs recently closed a new $50 million fund, AIM AI Fund, to support AI startups. The fund will primarily back companies from its own AIM-X accelerator in Saudi Arabia, as well as other AI startups worldwide. This move reflects the growing interest and investment in the AI sector, particularly in generative AI. The AIM-X accelerator was launched earlier this year as part of a national initiative in Saudi Arabia to strengthen AI technology over the next five years.
According to a report by Edge Delta, there has been a significant increase in AI startups globally, with over 210 AI unicorns valued at over $1 billion emerging as of March 2024. While the US leads in the number of AI startups founded between 2013 and 2022, the AI opportunity is expanding beyond Silicon Valley.
Approximately 35% of SparkLabs’ new fund will support accelerator participants, while the remaining 65% will be allocated for Series A and Series B investments outside of Saudi Arabia. The average check size for accelerator participants will be $200,000, with the potential for up to $500,000 in unique cases. Series A and Series B investments will range from $1 million to $5 million. The goal is to invest in 50 to 70 companies in total from the fund.
SparkLabs has not disclosed its limited partners, but CEO Bernard Moon mentioned that a government fund of funds is among them. The first batch of investments from the AI fund has already been made in 14 startups, including companies focused on AI video analytics, AI solutions for body movement analysis, climate software, video platforms, AI content creation, EV fleet management, travel, real-world data platforms, pest and disease detection, recruitment, generative AI, beauty brand tools, video intelligence, and agritech.
SparkLabs has a strong presence globally, with over 14 funds and two funds specifically in Saudi Arabia. The firm has invested in more than 550 startups worldwide. This latest fund reinforces SparkLabs’ commitment to supporting the growth of AI startups and highlights the continued expansion of the AI industry beyond traditional tech hubs.