The Vertical AI Report - Issue #3
The latest in Vertical AI funding and news
Hello and welcome to the Third Issue of The Vertical AI Report. You’ll probably notice a change to the format this time around, and I hope it continues to move the report in the positive, and more useful direction.
This time around I decided to highlighted specific verticals, and a company in each vertical that recently raised a new round. Additionally, I’ve added a new section to highlight Vertical AI VCs, and activity on this side of the space.
I expect this report to continue to grow and evolve over time. Right now, these are still the early days, so expect more iteration and ideation as the months go by. If you have any suggestions for how to improve the report, please send them my way, the best suggestions always come from readers.
And with that, I’ll let you dive in, enjoy this edition of The Vertical AI Report!
Biotech - Cradle raises $73M Series B
Cradle is using AI to change the way protein engineering works. They believe, as many others do, that protein engineering has the power to reshape our world by enabling new therapeutics that treat diseases to producing sustainable materials, animal-free foods, eco-friendly pesticides and the list goes on.
This current funding round was led by IVP with continued participation from Index Ventures and Kindred Capital bringing their total funding raised so far to over $100M 🤯
So what are they doing with the new funding, they cover the high-level plan in their announcement:
With the new funding we want to bring Cradle to more labs around the world. The new funding will help us accelerate three key areas:
Expanding our wet lab to further research into additional protein modalities and properties to improve our foundational models
Growing our engineering team to tackle more complex protein engineering challenges
Scaling our go-to-market and operations to bring our platform to more scientific teams (Source Cradle)
Finance - Fondo raises $7M Seed
Ah accounting, the vertical that all of us are so ready to be transformed by AI so we can do less boring accounting-related tasks. While AI has been making its way into the accounting space, it’s been slow going, but Fondo might be changing the game with some fresh funding and over 1,000 clients now happily using the service.
Despite all the talk of doom and gloom about the economy, entrepreneurship is actually on the rise in the U.S.: In 2024, an average of 430,000 new business applications were submitted every month, marking a 50% rise from 2019.
But the number of accountants these new businesses will need to maintain their books, file taxes, and do related accounting work is dipping. Nearly 75% of CPAs are expected to retire in a decade, and fewer graduates are choosing accounting because it simply doesn’t pay as much as fields like technology and finance. (Source - TechCrunch)
One of the areas that I think AI can really make an impact is accounting, an area where knowing lots of nuanced rules, and how those rules change every year, in every state and every country really matters. While a person can certainly do their best to keep up with this, it feels like this really is a job for AI 🦸
Medical - New Lantern raises $19M Series A
Radiology is a field that is incredibly important, often responsible for life-saving information, but also requiring some seriously tedious tasks…the perfect tasks to be streamlined with AI.
Shiva Suri saw the repetitive work that radiologists had to do first-hand while quarantined with his Mom during COVID. What he found? About 95% of the time his Mom was spent doing repetitive tasks which meant only 5% of her time was spent on super challenging things that only she could do as a trained radiologist.
So Shiva came up with New Lantern, an AI company that allows radiologists to complete twice as many cases. And it’s working, and growing thanks to a fresh $19M round led by legendary VC Firm Benchmark.
Here’s a bit more from Shiva:
“I’ve seen first-hand the inefficiencies and wasted hours that come with using legacy PACS and reporting software, and with the advancements in AI we can give radiologists back hours in their day to focus on the most critical parts of the job,” said New Lantern Founder and CEO Shiva Suri. “It’s still early days, and we couldn’t ask for a better partner than Eric and the Benchmark team to help us build and scale the company for the long-term.” (Source -BusinessWire)
HR - Socium rasies $5M Seed Round to expand in Africa
Socium started out as a recruitment website where people could find jobs and companies could look for talent. Then customers kept asking them if they provided HR solutions and they realized that expanding into HR could open them up to a massive market.
By targeting Africa Socium is has been able to tackle the complexities of different countries in the region and solve unique problems that others have struggled with. Of course, AI has played a pivotal role, helping to both write and improve resumes, and better match resumes to jobs.
To date, the Socium says it has over 100 active clients, cutting across 10 industries and 15 countries, and becomes one of the few HR techs in Africa that have raised funding in recent times. WorkPay, a Kenyan startup that is said to be serving more than 1,000 customers across 20 African countries, recently closed a $5 million Series A round led by Norrsken22.
Socium’s seed round was led by Breega, while Partech, Orange Ventures, Chui Ventures, Sonatel, Outlierz, Super Capital, Evolem, Techmind, and a number of angel investors also participated. Raisers Partners were financial advisers. (Source - TechCrunch)
Vertical AI VC - Blue Bear Capital raises $160M for AI Climate fund
One of the areas that I personally am the most excited about seeing AI make an impact is right here on good old planet earth. To help fund the next generation of AI founders in Climate, Blue Bear Capital now has a lot of dry powder, and a pretty friendly looking team if I don’t say so myself.
This was a bit of a confusing funding amount to verify as the title of the press release says they raised $200M, but in the release itself it says $160M…so I’m thinking $160M is the real number. Either way, it’s a nice chunk of change.
Here’s a bit more on the recent raise from Ernst Sack, one of the partners at Blue Bear:
"There is nothing artificial about artificial intelligence," said Blue Bear Partner Ernst Sack. "Just like the evolution of the eyeball or the development of writing, it is the next step in how information is found, shared, analyzed, and used to improve the world around us. At Blue Bear we are dedicated to uniting this machine intelligence with human creativity and entrepreneurship and leveraging that powerful combination to drive forward a modern, intelligent, sustainable, and globally competitive energy and industrial economy." (Source - PR Newswire)