AI startups keep getting buzzier, and Berlin-based AI venture studio Merantix is raising a new fund to invest in more of them.
The firm, which has historically focused on incubating its own startups, is targeting €100m to do more traditional venture investing in existing startups, Merantix’s cofounder Adrian Locher tells Sifted. Merantix is currently raising the new fund and is talking to existing LPs, which include SoftBank, the Robert Wood Johnson Foundation and the Kellogg Foundation. A spokesperson for Merantix says the firm will be announcing the fund soon.
Up until this point, Merantix has operated as a venture studio — which works with founders to create AI startups in-house and fund them with a standard €1m cheque in exchange for 15% equity.
The new fund would be the firm’s largest yet. Merantix’s most recent fund was €35m raised in 2020; Locher says that fund is about two-thirds of the way deployed. The eight-year-old company, which also has an AI campus in Berlin that hosts a variety of other startups outside its own portfolio, has incubated 10 companies so far, including AI breast cancer detection startup Vara and AI-powered designer protein company Cambrium, which just announced an €8m round last month.
The new fund will be split as €25m for co-investing in external startups; €25m for investing in incubated startups; and €50m for supporting existing investments in those buckets, Locher says. According to a job posting on LinkedIn for a new VC investor, Merantix will invest primarily in pre-seed and Series A companies, with a focus on Europe.
Fundraising is “always a lot of work. But these days, of course, it's even more”, he says, adding that conversations with existing LPs are going well.
The new fundraise comes at a time when valuations for AI startups have reached frenzied levels. As Sifted recently reported, new startups like Adaptive out of the Netherlands are trying to raise upwards of $100m valuations with just a pitch deck. The nosebleed prices are going to be a new challenge for firms like Merantix. Currently, its incubated companies have consistent (and, as Locher describes, “relatively conservative”) valuations given the structured cheque and equity stakes — but now, the firm will have to deal with external pricing.
“We're gonna look at things very [thoroughly],” Locher says. “If we think that just through FOMO the valuation has skyrocketed, then we’ll probably just not do it.”