A Humble Note from Hamza & Angela: The March of Verticalized AI

We’ve been at the coal face of trends and very close to AI startup founders who are seeing amazing traction, and we’ve realized this is all in verticalized AI! We want to cover some insights and analysis here real quick, as we think this is of real value to the readers before we jump into the usuals of the newsletter.

The What and Why of Verticalized AI

Last week’s newsletter had our insights and predictions going into 2025, and we mentioned that verticalized AI was one of our top areas to watch. Verticalized AI is where products are built for very specific niches (healthcare, legal, insurance, etc.), drilled down into areas where there are deep industry insights and an automation of a specific role (e.g. an insurance compliance officer).

This is different to horizontal products, that may not be tailored to a specific industry or niche but aim to serve multiple industries. As a founder, it’s okay to start there with the intention of moving into a vertical once you gain more insights, but in general we’ve seen that founders building in niche verticals stand to unlock strong traction much quicker, especially if they are replacing a whole role with an AI agent. Furthermore, it’s even better if one or more of the founders come from the niche and have unique insights and domain expertise to develop the right system prompts for AI agents, which are hidden to outsiders who will need more time to figure them out.

That’s not to say that if you’re working on a horizontal solution it won’t work (indeed there have been strong companies here, e.g. Scale AI, Cohere and more), but generally we’ve seen it’s harder to get traction and revenue in these areas. This could be for a variety of reasons, e.g. not knowing how to sell to the ICP (ideal customer profile), messaging not hitting it with any specific industry, not understanding the real problems in the area, go to market motions getting complicated, the domain nuances and UI not resonating strong enough as you’re building for too many people, etc.

Just look at the Venture Deals Section below, and you’ll see that these are mostly verticalized AI companies now raising $20M or so in series A funding. These are founders who started in one niche around 1.5 years ago, heads down automating one thing to unlock $millions in ARR, and now can grow from this. 

We hear you asking, what about Total Addressable Market?

It’s true that if you are replacing one specific role and are very niche then the TAM could be smaller, BUT the beauty of these businesses is that you can focus on one customer profile and then build out additional products or agents to automate their other workflows too, saving that organization even more - unlocking more revenue whilst keeping a very strong ICP that you can drill further into with a replicable go to market engine. In some areas, this can turn into a massive TAM potential.

This is what we are keeping in mind when building our own AI products. Just a humble note in case helpful to our fellow founders. Go go go, build build build!!!

Yours truly,

Hamza Zaveri & Angela Mascarenas

📈 Venture Deals To Watch Out For

• Eve, an AI-powered platform for law firms, raised $47 million in its Series A funding. (link)

• Raspberry AI, a generative AI platform provider for fashion creatives, raised $24 million in its Series A funding. (link)

• Boardy AI, a networking AI that connects people professionally, raised $8 million in its seed funding. (Link)

• Nema Health, a virtual trauma and PTSD company, raised $14.5 million in its Series A funding. (link)

• Hyperbolic, an open-access AI computing and inference services company, raised $12 million in its Series A funding. (link)

• Jones, an AI driven insurance verification company, raised $15 million in its Series B funding. (link)

• Maki, a conversational AI company for talent acquisition and management, raised $28.6 million in its Series A funding. (link)

• MetAI, an industrial AI and 3D simulation company, raised $4 million in its seed funding. (link)

⚙️ New Tools & Product Launches You Won’t Want to Miss

• Vercel Grep - A code searcher with over 500,000 public git repositories. (Grep)

• VS Code Copilot - Now supports Claude 3.5 Sonnet. (VS Code Copilot)

• Aneta - An AI platform for employee engagement and management. (Aneta)

• LangChain Ambient Agent - an AI assistant designed to understand context and assist without direct commands. (Langchain Ambient Agent)

• Krea - AI image and video generator, now with 3D capabilities. (Krea)

• TemPolor - An AI-powered, royalty-free music generator and platform. (TemPolor)

• Scorpion - An NVIDIA-powered service robot for drinks and cocktails. (Scorpion)

• Google’s Daily Listen - Google’s new lab of AI personalized podcasts based on Discovery. (Link)

🎞️ Highlights from The AI Hot 100 Conference: Infrastructure Tooling in the AI Era Panel

Hear from Andrew Hoh (Co-Founder, Lastmile AI), Vig Sachidananda (Investor, Gradient Ventures), Emma Lawler (Co-Founder, Velvet) and Lucas Liebenwein (Deep Learning, Nvidia) about Infrastructure Tooling in the AI Era (from The AI Hot 100 Conference in NYC, September 2024).

Top Jobs in AI

Join a high growth funded ($10M+) startup, having <50 employees, which are actively HIRING.

Icon (Seed - Founders Fund): AI platform to accelerate Ad making process - voiceovers, captions, music, & uploading all ads to desired platforms

• Founding Engineer (Link)

• Founding Research Engineer (Link)

• Founding Product Design (Link)

• Founding Talent Manager (Link)

Numeric ($28M Series A) - Modern accounting & finance platform to collaborate, monitor and analyze data, and share insights about their financials

• Software Engineer (Link)

• Product Marketing Manager (Link)

• Solutions Manager (Link)

Fay ($25M Series A) - Easily find board certified nutritionists near you that are covered by insurance

• AI Engineer (Link)

• Lead Android Engineer (Link)

• Product Manager (Link)

HeyGen ($60M Series B) - AI powered video creation platform

• Research Engineer, Computer Vision (Link)

• Sr. Product Designer (Link)

• Backend Engineer (Link)

Valar Labs ($22M Series A) - AI-driven diagnostics to reduce treatment uncertainty for oncologists and patients

• ML Engineer (Link)

• Software Engineer (Link)

• Account Executive (Link)

Looking to hire in AI? Apply here to add your roles to our Job Board.

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