Creator Ventures, a venture capital firm specializing in early-stage consumer internet startups, has raised US$45 million for its second fund.

This brings the firm’s total assets under management to US$65 million.

Founded in 2022 by Sasha Kaletsky and Caspar Lee, Creator Ventures plans to use Fund II to lead and co-lead pre-seed and seed investments.

The firm will focus on companies developing consumer applications, creative tools, AI-enabled software, and marketplaces.

Investments will range from US$200,000 to US$2.5 million.

The fund’s backers include institutional investors such as Level Ventures, Cendana Capital, and Sequoia Capital.

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🔗 Source: Creator Ventures

🧠 Food for thought

1️⃣ Consumer internet investment is recovering after a challenging period

Creator Ventures’ new fund launches during a notable recovery in consumer internet investment, which is up 25% from a nine-year low despite ongoing challenges like high customer acquisition costs and market saturation 1.

This timing suggests a potential counter-cyclical strategy, as many investors have shifted away from traditional consumer tech toward enterprise software and AI solutions amid profitability concerns 1.

The firm’s focus on leading pre-seed and seed rounds aligns with current market dynamics, where seed deals are outpacing Series A investments, creating a bottleneck in the startup pipeline 1.

By raising $45 million, more than doubling their previous fund, Creator Ventures is strategically positioning itself where early-stage consumer internet opportunities remain strong, particularly in media, social networking, and commerce enablement sectors that continue to show strength 1.

2️⃣ AI integration becoming a crucial differentiator for consumer startups

Creator Ventures’ investment thesis focusing on AI-enabled SaaS adjacent to consumer internet reflects the broader industry trend where AI integration has become a key value driver, with AI companies commanding a 265% valuation premium compared to non-AI counterparts 1.

The firm’s portfolio already showcases this strategy through investments in companies like ElevenLabs (voice AI), Praktika.ai (language learning), and Palabra AI (voice translation), positioning them within an AI market projected to reach $243.7 billion by 2025 2.

This AI focus is particularly timely as retailers and consumer platforms increasingly leverage AI and AR technologies to enhance shopping experiences and streamline operations in response to market demands 3.

Investment in companies at the intersection of AI and consumer applications allows Creator Ventures to capitalize on multiple growth trends simultaneously, potentially yielding outsized returns similar to their reported performance of 6x MOIC on their initial investment club.

3️⃣ Creator economy expertise offers differentiated value in competitive venture landscape

Co-founder Caspar Lee’s background as a creator with 12 million followers provides Creator Ventures with unique insights into consumer behavior and creator needs, offering potential advantages in deal sourcing and evaluation within the evolving consumer internet sector 3.

This creator economy expertise is particularly valuable as VCs become more selective, requiring startups to demonstrate unique value propositions and sustainable business models in an increasingly competitive landscape 3.

The firm’s reported track record, with their 2019-22 vintage fund achieving over 4x DPI and 6x MOIC, suggests their specialized focus and expertise may be translating into above-market returns during a period when many consumer internet investors struggled.

Their investment in beehiiv (newsletter platform for creators) and Status (social media app) demonstrates how they’re leveraging their understanding of creator and consumer needs to identify promising opportunities in an otherwise challenging market segment.

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