The survey suggested that generative AI pilots are failing 95% of the time, a jarring proposition at a time when VCs, startups, and incumbents are plowing billions into “deploying AI.” Samir Kumar, general partner at Touring Capital and previously a CVC veteran, is well-equipped to parse what’s happening here. 

“The reaction is: ‘Oh my God, this is all hype’,” said Kumar. “‘This stuff doesn’t work. We’re wasting our time.’ Disaster, right? But if you dig into it, the real issue—and this is pervasive—is about evaluations. What are you trying to accomplish, and how do you evaluate it? And that’s an organizational issue and a process issue. You have to understand the limitations of where we are with what AI can do, effectively benchmarking and evaluating from there: Is this effective or not?”

This is a question that, on some level, Kumar, Nagraj Kashyap, and Priya Saiprasad expressly started Touring in 2023 to answer. The group came together over decades, weaving across each other in the realm of corporate venture capital—Kashyap and Kumar were at Qualcomm Ventures together, while Kashyap, Kumar, and Saiprasad all connected at Microsoft’s M12, and Kashyap and Saiprasad synced up at SoftBank Vision Fund II. This background, doing venture capital for corporate giants, gives Touring a unique set of touchpoints.

“At Microsoft, the one thing Satya used to talk about all the time, and that we all internalized, is the growth mindset,” said Kashyap. “So, we come into the office saying we’re going to learn something new every day. We’re not know-it-alls, we are learn-it-alls.”

Touring has now closed its first fund at $330 million, Fortune has exclusively learned. As they’ve raised this first fund, they’ve also done 12 investments, including in Numa, Cusp, and Exaforce. The firm also led the $33 million Series B in trust center platform SafeBase, which was acquired by Drata in February. 

“We go after the large, deep pain-point verticals, and then we see where AI-enabled software could actually help generate customer value,” Saiprasad said. “That’s the core of what we do, versus necessarily investing at the hype layer of foundation models. We tend to stay away from that side of the house.”

The Touring team doesn’t make any bones about it—they’re investing in the fervor of a hype cycle. In fact, the idea for Touring came amid another hype cycle’s crash, in 2022, when the group decided to start a VC because the tech market had just collapsed, with software valuations dropping by over 80% just as AI consumer adoption was starting to take hold. 

“We’ve seen what we call bubbles formed during the early parts of a tech flash function,” said Kashyap. “I think AI will be very, very wealth-creating for the economy, for everybody else. It’s just in the beginning, so everybody sort of rushes into the gold rush it is now. So, we’ve picked our spots on the app side and that’s how we’re viewing the landscape.”

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Venture Deals

- WeTravel, a San Francisco-based operating system for multi-day travel businesses, raised $92 million in Series C funding. Sapphire Ventures led the round and was joined by Left Lane Capital, Base10, Cross Creek, and angel investors.

- Fetcherr, a Tel Aviv, Israel-based developer of an AI market engine for airline companies, raised $42 million in Series C funding. Salesforce Ventures led the round and was joined by existing investors Battery Ventures, Left Lane Capital, and M-Fund.

- Mimica, a London, U.K.-based process intelligence company, raised $26.2 million in Series B funding. Paladin Capital Group led the round and was joined by Khosla Ventures, LGVP, and Entrepreneur First.

- Corintis, a Lausanne, Switzerland-based developer of technology designed to manage the heat produced by computer chips, raised $24 million in Series A funding. BlueYard Capital led the round and was joined by Founderful, Acequia Capital, Celsius Industries, XTX Ventures, and others.

- Synthesized, a London, U.K. and New York City-based provider of test data and infrastructure for enterprises, raised $20 million in Series A funding. Redalpine led the round and was joined by IQ Capital, Mercia Ventures, and UBS.

- Cosmoserve Space, a Hyderabad, India-based space debris removal company, raised $3.2 million in pre-seed funding. Alan Rutledge led the round and was joined by AUM Ventures, Shakti VC, and Ram Shriram.

- Trismik, a Cambridge, U.K.-based LLM evaluation platform for AI builders, raised £2.2 million ($3 million) in pre-seed funding. Twinpath Ventures led the round and was joined by Cambridge Enterprise Ventures, Parkwalk Advisors, Fund F, Vento Ventures, and angel investors.

Private Equity

- Battery Ventures agreed to lead a majority investment in Signal AI, a London, U.K.-based risk and reputation intelligence platform, worth $164 million.

- 3DR Labs, a portfolio company of Arsenal Capital Partners, acquired Strings, a Sacramento, Calif.-based workload monitoring and automation platform focused on health care institutions. Financial terms were not disclosed.

- BNP Associates, backed by Godspeed Capital, acquired Studdiford Technical Solutions, an Alexandria, Va.-based consulting firm specializing in airport systems development and transportation security. Financial terms were not disclosed.

- CleanWater1, backed by Baird Capital, acquired PureAir Filtration, an Atlanta, Ga.-based provider of air purification and gas-phase filtration services. Financial terms were not disclosed.