- The Seattle region, known for attracting top tech talent, has struggled to secure funding for its startups, even though the region is home to tech behemoths and major employers like Microsoft and Amazon.
- So these two Seattle-based VCs have decided to team up with execs from top companies in the Pacific Northwest, along with Seattle Seahawks Captain Bobby Wagner, to launch Fuse Venture Partners, a new VC firm that will fund startups in Seattle's B2B tech ecosystem.
- Kellan Carter and Cameron Borumand, the firm's operating founders, are alums of Ignition Partners, a Seattle-based VC firm that has invested in buzzy enterprise software startups such as DocuSign and Splunk.
- While the two wouldn't reveal specifics, they plan to funnel about $100 million into machine learning and AI startups over the next 3-4 years.
- Carter and Borumand are immersing themselves in the AI world just as funding for the space is reaching new heights, and some experts say that the AI market could be worth almost $400 billion by 2025.
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It seems that everyone these days is talking about which region will become the next Silicon Valley.
There's Utah's Silicon Slopes and Austin's Silicon Hills. But there's also that region in the Pacific Northwest that's home to tech behemoths like Amazon and Microsoft: Seattle.
Insiders are keeping tabs on the booming enterprise startup scene in Seattle. But the region, known for attracting top tech talent, has struggled to secure funding for startups, and local investors have noticed.
On Tuesday, Seattle-based investors Kellan Carter and Cameron Borumand announced that they're launching Fuse Venture Partners, a new VC firm focused on Seattle's B2B startup ecosystem. They'll join the firm as its operating founders.
Before launching Fuse, Carter and Borumand worked together at Ignition Partners, a Seattle-based VC firm that has backed hot enterprise software companies like DocuSign, Splunk, and Seattle-based unicorn Icertis.
Ignition has raised 6 separate funds over the past 2 decades, but the senior partners decided that they didn't want to commit to raising a seventh, the two said.
"Cam and I saw an incredible opportunity to raise our own fund and double down on the Seattle ecosystem," Carter told Business Insider in an interview.
The two will be joined by a number of other Ignition alums, including former Microsoft CFO John Connors and former Amazon VP Satbir Khanuja. Both will serve as senior operating partners.
Carter said that Fuse will especially benefit from having Amazon and Microsoft, two of the most important enterprise software companies in the world, "based right in our backyard." Both companies have made the region a "magnet for global talent to this region," the VC added.
Perhaps the most famous Seattleite joining the firm is Seahawks Captain Bobby Wagner, who will serve as a venture partner.
Wagner "has a track record of great investments and entrepreneurial activity," Borumand said. The football superstar has previously invested in high profile startups, including Denali Therapeutics.
Carter and Borumand worked with Wagner at Ignition for 3 years, and they're looking forward to tapping into the superstar linebacker's "unique and differentiated network," they said.
"We're super excited to translate what he's done off the field, and on the field, to the Fuse platform," Borumand added. "As a captain of the Seahawks, and a Walter Payton Man of the Year, Bobby is a leader and a winner."
"We think we're in the first inning of machine learning and AI providing business value"
Carter and Borumand said that the firm is placing its bets on B2B startups working across artificial intelligence and machine learning.
For Carter and Borumand, AI and machine learning are familiar turf.
Carter was the lead source for Ignition's 2017 investment in Botkeeper, a startup that uses machine learning and AI to automate repetitive accounting tasks. He sits on the board of the startup, which raised $25 million in its Series B round in June.
Carter was also on the Ignition team when the firm invested in unicorn Icertis, an AI-infused platform that helps companies manage contracts.
"We think we're in the first inning of machine learning and AI providing business value," Borumand said. In their investments, they'll be paying attention to the quality and quantity of data that startups are working with.
Carter and Borumand are immersing themselves in the AI world just as funding for the space is reaching new heights. In 2019, investors funneled almost $27 billion into AI startups, an increase of more than 500% since 2014. Some experts say that the AI market could be worth almost $400 billion by 2025.
Fuse has not released its official funding numbers, as it is still knee deep in the fundraising process, but Carter and Borumand said that they plan to build a long-lasting firm. Their goal is to deploy roughly $100 million into the Seattle ecosystem over the next 3-4 years.
Borumand said that Seattle is home to one of the most exciting and undercapitalized startup ecosystems in the world.
"It's nearly impossible for the capital to keep up with the activity in the past decade," he added, referring to Seattle's tech ecosystem. "We launched Fuse to help fill that void."
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