Investigate VC has launched a new fund series, Fund 2 (I-III), aiming to raise over US$500 million across three vintages: 2025, 2027, and 2029.

The funds are designed to support early-stage startups in Asia, Europe, and North America.

The first fund, Investigate Fund 2 (I), is targeting a US$150 million close.

The firm intends to invest in startups that exhibit strong network effects and plans to use AI-driven tools for investment decisions and deal sourcing.

Investigate VC has teams based in Asia, Europe, and North America, highlighting its global approach to venture capital.

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🔗 Source: Investigate VC

🧠 Food for thought

1️⃣ The convergence of AI both as investment target and operational tool

Investigate VC’s AI-driven investment approach aligns with a broader industry transformation occurring in venture capital.

The new fund launch comes as AI is reshaping both what VCs invest in and how they operate, with AI and machine learning deals capturing 46.4% of U.S. venture capital funding in 2024, up significantly from 36% in 2023 1.

This influx of capital shows no signs of slowing, as AI startups attracted $52 billion in Q1 2025 alone, representing 41% of global VC funding 2.

The operational integration of AI in venture capital firms themselves has accelerated, with 92% of VCs now utilizing AI to enhance efficiency in due diligence and deal sourcing 3.

Investigate’s approach mirrors the industry-wide adoption trend where 76% of VC firms now leverage AI for task automation, a marked increase from 62% just a year ago 1.

This dual positioning, using AI tools while investing in AI-powered companies, exemplifies how modern VC firms are gaining competitive advantages in an increasingly crowded market where over 32,000 active VCs compete for deals, compared to just 150 firms in 1994 4.

2️⃣ Innovative fund structures address the liquidity gap in venture capital

Investigate VC’s dual-fund liquidity structure reflects a strategic response to a persistent challenge in venture investing: balancing investor liquidity needs with long-term value creation.

Their approach provides optional liquidity after five years while preserving long-term upside, addressing a fundamental tension in traditional VC models where capital is typically locked for 10+ years.

This innovation comes during a period when the venture landscape is evolving from what industry analysts describe as its third major phase, where VC has moved from a cottage industry to software-enabled operations and now to ubiquity with more sophisticated structures 4.

The timing is particularly relevant as investor expectations are shifting—while AI startups are reportedly achieving revenue milestones faster than traditional SaaS companies, the typical path to liquidity remains extended 2.

The fund’s reported 28% net IRR and 5x MOIC from its previous fund places it well above industry benchmarks at a time when institutional investors are increasingly scrutinizing venture performance against more liquid alternatives.

3️⃣ Network effects provide defensive moats in an AI-saturated investment landscape

Investigate VC’s explicit focus on network effects businesses comes as differentiation becomes increasingly critical in a market flooded with AI investments.

Their strategy targets companies where usage, data, and user interaction drive compounding growth—the model behind 70% of today’s most valuable tech companies, according to their claim.

This approach is particularly timely when considering the significant concentration of venture capital in the AI sector, with AI funding reaching $59.6 billion and comprising 53% of global VC funding in Q1 2025 5.

The emphasis on network effects as a defensive business characteristic addresses growing concerns about market saturation and overvaluation in pure-play AI companies 6.

While AI adoption in organizations has surged from 55% in 2023 to 78% in 2024 2, this widespread adoption means that AI alone may no longer provide sustainable competitive advantage without additional moats like network effects.

The fund’s global approach across Asia, Europe, and North America reflects the broadening geographical distribution of network-effect businesses beyond traditional tech hubs, even as the Bay Area continues to attract nearly 70% of all VC investment 7.

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