Generative A.I. is having its zeitgeist moment with investors, even if some in the tech industry are seeking to slow its innovations down. But according to one A.I.-focused VC, certain companies won’t be able to get away with just having one A.I. slide in their deck any longer. “I think pretty quickly, we’re moving past, like, ‘A.I. for blah, blah, blah,’” Erin Price-Wright, a partner focused on early-stage investments at Index Ventures, recently told me.
She believes that, for enterprise SaaS (software-as-a-service) companies in particular, “Now, it’s reimagining what SaaS products look like with A.I. at their core” versus having A.I. as “a selling point.”
Index Ventures has been investing in A.I. startups over the years and got in on the so-called foundation model company Cohere (in the same bucket as OpenAI) back in 2021. Price-Wright is among a rapidly-growing segment of VCs who believe that we’re at the beginning of a big platform shift with A.I., akin to the internet and mobile.
From her perspective, “going forward, it’s going to be very difficult to raise any cash as at least a B2B or enterprise SaaS company if you don’t have an A.I. strategy.” Her reasoning is that software companies now have a standard of doing things like outsourcing databases or having a cloud strategy—and that A.I. is quickly becoming a similar pillar for SaaS companies.
In other words, as she recently penned in a blog post, “within a decade, A.I. will be a core component of every piece of application software that’s built and shipped.” Price-Wright argues that every SaaS company in their portfolio is “developing a strategy around A.I.,” pointing to recent A.I. announcements from portfolio companies like Discord, Notion, Intercom, Beamery, and Figma.
In that sense, Price-Wright argues that “basically all software investing right now, at least on the B2B side, is A.I. investing.” Valuations, therefore, can vary greatly: She says there isn’t a rule of thumb of, “‘Oh, you put A.I. in front of this, and suddenly you get a 10% bump.'”
Certainly, some companies are seeing a premium: namely, generative A.I. startups. Per PitchBook data, the median pre-money valuation for generative A.I. firms hit $90 million so far this year (based on nine deals PitchBook has tracked), up from $42.5 million in 2022.
Price-Wright believes the overall hype is justified. But for software startups hoping to snag a check from Index Ventures, the A.I. buzzword has “become a little bit less of like, a wow factor,” and more of, “this is the base case.”
Have a great weekend,
Anne Sraders
Twitter: @AnneSraders
Email: anne.sraders@fortune.com
Submit a deal for the Term Sheet newsletter here.
Jackson Fordyce curated the deals section of today’s newsletter.
VENTURE DEALS
- Fetch.ai, a Cambridge, U.K.-based infrastructure platform for autonomous services, raised $40 million in funding from DWF Labs.
- P97, a Houston-based mobile commerce and digital marketing platform provider to the convenience retail, auto industry, and fuel market, raised $40 million in funding from Portage Capital Solutions.
- Perplexity AI, a San Francisco-based conversational A.I.-powered answer engine, raised $25.6 million in Series A funding. New Enterprise Associates led the round and was joined by Databricks Ventures, Elad Gil, Nat Friedman, and other angels.
- Effy, a Paris-based online energy renovation company, raised €20 million ($21.81 million) in funding led by Felix Capital.
- Paytrix, a London-based embedded payments company for vertical software platforms, raised $18.3 million in Series A funding co-led by Unusual Ventures, Motive Partners, and Bain Capital Ventures.
- Horizon Quantum Computing, a Singapore-based quantum computing hardware-focused software development company, raised $18.1 million in Series A funding. Tencent, Sequoia Capital India, SGInnovate, Pappas Capital, and Expeditions Fund invested in the round.
- Fixie, a Seattle-based automation platform for large language models, raised $17 million in seed funding. Redpoint Ventures led the round and was joined by Madrona Venture Group, Zetta Venture Partners, SignalFire, Bloomberg Beta, and Kearny Jackson.
- Orb, a San Francisco-based pricing platform, raised $14 million in Series A funding. Menlo Ventures led the round and was joined by base case capital, The Cannon Project, Data Community Fund, Essence VC, FOG Ventures, Scribble Ventures, South Park Commons, SV Angel, and other angels.
- Votiro, an Austin-based content security platform, raised $11.5 million in Series A funding led by Harvest Lane Asset Management.
- TROOP, a remote-based corporate meeting technology and services developer, raised $11 million in Series B funding. Durable Capital Partners and Madrona Venture Group, co-led the round and were joined by All Iron Ventures and Conexo Ventures.
- BioCorteX, a London-based digital medicine company, raised $5 million in seed funding co-led by Sofinnova Partners and Hoxton Ventures.
- Finverity, a London-based digital ecosystem for trade and supply chain finance, raised $5 million in funding. Outward, Acrobator, Ventures, and other angels.
- Presta, a remote-based digital lending platform, raised $3.3 million in pre-seed funding. Distributed Ventures led the round and was joined by Zeal Capital Partners, Matchstick Ventures, The Fund, Tech Stars, and Jumpstart Ventures.
PRIVATE EQUITY
- Vista Equity Partners acquired Duck Creek Technologies, a Boston-based property and casualty insurance company, for approximately $2.6 billion.
OTHER
- LLYC acquired BAM, a San Diego-based PR agency. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Accel-KKR, a Menlo Park, Calif.-based private equity firm, raised $5.3 billion across two funds. $4.4 billion will be dedicated to majority buyout investments in the lower-middle market and middle-market software and IT-enabled services companies. $920 million will be dedicated to small-cap software and tech-enabled services companies.
PEOPLE
- Antler, a Singapore-founded venture capital firm, promoted Rosalind Bazany to global partner.
- LongRange Capital, a Stamford, Conn.-based private equity firm, hired Andrew Cialino as principal, head of business development. Formerly, he was with SFW Capital Partners.
This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
