Tola Capital, a venture capital firm specializing in AI-enabled enterprise software, has recently unveiled its third fund, successfully securing $230 million in capital commitments. This marks the highest amount raised by the firm to date, amid a flurry of activity in the VC sector with other notable funds like NXTP, Saviu Ventures, and Founders Fund also announcing substantial capital raises.
Despite a challenging fundraising environment in the past year, Tola Capital’s success can be attributed to the widespread interest in artificial intelligence. Sheila Gulati, co-founder and managing director, highlighted the immense opportunities AI presents to revolutionize work processes, making it an opportune time to launch a new fund.
Tola Capital, established in 2010 during the rise of cloud computing, focuses on the AI landscape, considering it a game-changing and captivating field. Gulati, formerly leading enterprise IT strategy at Microsoft, expressed her excitement about the transformative potential of AI, emphasizing the unparalleled opportunities it offers.
With a total of $688 million raised across all funds, Tola Capital concentrates on seed and early-stage investments in startups that innovate the enterprise software industry using AI. The firm is positioned in the “enterprise scaffolding” of AI, addressing aspects such as responsible AI, AI security, and app layer AI, rather than foundational AI.
Regarding recent developments, Tola Capital actively collaborated with its portfolio companies relying on GPT technology during the upheaval at OpenAI. Gulati shared her perspective on OpenAI’s governance model, emphasizing the importance of conducive decision-making for fostering innovation in the industry. Now that the issues have been resolved, she believes OpenAI is in a better position, benefiting the entire sector.
Tola Capital’s investment thesis revolves around seeking startups with genuine innovation. The firm’s past funds have seen over a dozen successful exits, including notable acquisitions like Clipchamp, OSIsoft, and Hybris. Tola Capital III plans to invest in 25 to 30 global companies, with check sizes ranging from $1 million to $4 million for seed-stage and $5 million to $15 million for Series A and B. The firm has already deployed capital into eight companies, showcasing its commitment to supporting companies with significant invention, a robust team, and ambitious growth plans.
