Bay Area-based SignalFire, a data-driven venture firm, has raised $1 billion for its fifth and largest fund, which it will invest in applied AI companies.
We spoke with founder Chris Farmer on the firm’s investment thesis, 12 years on from its founding. “It’s a fantastic validation that we have enough proof points in the portfolio and enough scale with companies that we’ve gotten into very early, that are quite large at this point,” he said.
The new funds bring SignalFire’s assets under management to $3 billion. The firm’s prior fund, announced in February 2023, was slightly smaller at $900 million.
New limited partners investors include large U.S. public pension funds, an Asian sovereign wealth fund, a major global bank, and a large insurer. Existing LPs include endowment, foundations, family offices and fund of funds.
Data driven
SignalFire is built on its machine-learning platform, Beacon AI. It’s “the fabric that stitches the entire firm together,” Farmer said. “There are five things that you do in venture, and that’s sourcing, picking, winning, adding value and portfolio construction.”
Beacon AI scans 80 million entities and 650 million people to detect anomalies on traction, to benchmark companies, and to assist with portfolio success — as a talent recruiting platform and a platform for lead generation.
The firm’s latest fund will be invested over the course of 2.5 years. SignalFire plans to make around 100 investments at pre-seed with a commitment of $100,000 to $1 million and 60 investments at seed for $1 million to $5 million.
In its early-stage fund, the firm will make investment at Series A and B from $5 million to $30 million, mostly in companies in which it invested at seed.
The firm’s Executive In Residence, or XIR, program, which pairs experienced executives with promising companies new to the portfolio, with a $2 million to $10 million run rate, will invest between $15 million and $30 million. Across its early fund and XIR program the firm plans to make around 30 investments.
XIR investments include data monitoring company Anomalo and medical coding platform CodaMetrix, which spun out of Mass General Brigham.
Previous applied AI investments the firm has made include: EvenUp, which offers legal tech for personal injury practices; accounts payable startup Stampli; Horizon3.ai, provider of continuous penetration testing in cybersecurity; and Grow Therapy for therapist scheduling.
The firm is also investing in consumer-focused companies such as Monarch Money for household budgeting and money management, and Whop, a kind of Shopify for digital goods.
The firm’s largest exit to date is Frame.io, which was acquired by Adobe in 2021 for nearly $1.3 billion.
Illustration: Dom Guzman
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