Jump Capital Co-founder and Partner Sach Chitnis has revealed that the venture capital firm, backed by the founding team of quantitative trading firm Jump Trading, has successfully closed a new fund worth $350 million.
The Chicago-based investment firm will use this new capital to increase its focus on artificial intelligence startups. The size of this new fund matches the amount raised in its previous fund in 2021, which was primarily focused on the cryptocurrency sector.
At the end of 2021, Jump Capital spun off its crypto business team into an independent unit called Jump Crypto, which was placed under Jump Trading's digital assets division. Although the crypto market is currently in another downturn, Jump Capital's portfolio company BitGo went public this year with a valuation of $2 billion.
At this stage, Jump Capital is concentrating its investments on early-stage startups in three key areas: AI applications, AI infrastructure, and cybersecurity. Its investment amounts are structured in two tiers: $1 million to $4 million, or $8 million to $15 million per deal.
Earlier this year, the firm led a $35 million funding round for AI-powered compensation management startup Compa, and also led a $20 million round for automated GPU software service provider Standard Kernel. Last year, the company invested in AI model access platform TrueFoundry. Currently, more businesses are relying on such platforms to select the most cost-effective large language models, making this a highly popular sector.
Chitnis stated that the institution's core investment goal is to capture opportunities for traditional industries to achieve transformative upgrades through artificial intelligence.
Jump Capital was founded in 2012, with its funds primarily sourced from Paul Gurinas and Bill DiSomma. The two were former floor traders at the Chicago Mercantile Exchange and founded Jump Trading in 1999. Many Jump Trading employees are also limited partners in this venture capital fund.
The Jump Capital research and investment team currently has 15 members, split between Chicago and New York, and the team is still expanding. Jump Capital and Jump Trading operate as independent entities.
Jump Trading uses its own balance sheet to directly invest in startups, mostly focusing on companies with strategic synergies to its own business. For example, last year, Jump Trading, alongside another trading firm DRW, co-invested in Silicon Data, a Silicon Valley data company that specializes in compiling a GPU rental price index. This index is intended for use in trading a new asset class known as computing power futures.
Compared to Jump Trading, Jump Capital's industry coverage is broader. Chitnis noted: "The two institutions often collaborate deeply, but they also make differentiated choices on many investment targets." Lightweight, on-device small language models that can run on mobile phones are a sector that particularly attracts him. Additionally, the application of AI in professional services and the changes AI brings to corporate cybersecurity are also key areas of focus.
The team frequently engages with potential technology buyers and startup founders to conduct in-depth research on industry needs. Chitnis explained: "Most of our investments follow a reverse approach: we first identify the sectors we are interested in, and then actively seek out startup founders who match those sectors."
Comments