Betaworks’ third fund closes at $66M to invest in early-stage AI startups

Betaworks, the New York City-based venture studio, has successfully closed its third fund, raising $66 million aimed at early-stage artificial intelligence startups. With a history of investing in AI dating back to 2016, the firm has previously supported notable companies like Huggingface and Granola through its investment initiative, Betaworks Camp. Jordan Crook, a partner at Betaworks and a former TechCrunch staff member, revealed that Fund III will prioritize investments in AI agents, native interfaces, and application-layer AI technologies. "We will continue to engage in direct seed investing and our Betaworks Camps program focused on these themes," Crook stated. The new fund is set to make a minimum of 25 pre-seed to seed investments, in addition to planning around 50 investments through the Betaworks Camps initiative. Crook noted that the firm has already completed approximately 37 deals, with an average investment size of around $500,000. While commenting on the current investment landscape, Crook described it as "frothy" for startups and "spiky" for funds. Despite these challenges, Fund III has attracted many returning limited partners, a testament to Betaworks' established reputation in the venture capital sphere. She acknowledged the difficulties faced in fundraising during 2024, especially as they worked to expand their fund. Previously, Betaworks raised $46 million for Fund II in 2020 and $48 million for Fund I in 2016. Since its inception in 2008, Betaworks has become a prominent player in the New York tech ecosystem, launching the Betaworks Camps program in 2016. The firm's portfolio also includes significant investments in platforms like Tumblr and Kickstarter.