SAN FRANCISCO (Diya TV) — Venture capital firms are increasingly experimenting with a private equity-style approach to investing, acquiring mature businesses and supercharging them with artificial intelligence.
This emerging strategy, which blends venture investing with operational roll-ups, is gaining traction among high-profile firms such as General Catalyst, Thrive Capital, and Khosla Ventures. Instead of placing early bets solely on startups, these firms are acquiring established companies—think call centers, accounting firms, and homeowners associations—and integrating AI tools to automate operations, scale efficiently, and boost profitability.
General Catalyst has already embraced this model, calling it a “new asset class.” According to TechCrunch, the firm has backed seven companies using this AI roll-up playbook, including Long Lake, a platform streamlining the management of homeowners associations. Since its founding less than two years ago, Long Lake has raised an eye-popping $670 million in funding, according to data from PitchBook.
Thrive Capital and solo investor Elad Gil are also reportedly exploring this trend. Now, Khosla Ventures, known for early bets on groundbreaking but unproven tech, is carefully entering the space.
“I think we’ll look at a few of these types of opportunities,” said Samir Kaul, general partner at Khosla Ventures, in an interview with TechCrunch. While Kaul expressed cautious optimism, he emphasized the need to protect the firm’s reputation for strong returns. “My biggest stress in life is I’m managing other people’s money, and I want to make sure that I continue to be a good steward of it.”
What makes this strategy appealing is its dual benefit. It gives AI startups a faster path to customers, especially in legacy industries that typically resist adopting new tech, and allows VCs to back scalable operations that are less risky than early-stage startups. In Kaul’s words, the mature companies being considered are “very unlikely to lose money.”
AI startups often struggle with long enterprise sales cycles, which can stall early growth. But when those startups are embedded into newly acquired, cash-generating businesses, the barrier to adoption disappears. As a result, these roll-ups can serve as ready-made customers and distribution channels for the growing wave of AI solutions flooding the market.
Still, Khosla Ventures is treading lightly. The firm wants to test the waters with a few select deals before committing to the model long-term. If the early results are promising, Kaul said Khosla might consider launching a dedicated investment vehicle. However, he made clear that the firm doesn’t intend to build a private equity-style team in-house. “We wouldn’t do it alone, we don’t have that expertise,” he said, suggesting they would likely partner with experienced PE operators for acquisitions.
While still in its infancy, this trend could reshape how venture capitalists approach scaling technology, particularly AI, beyond traditional startup investing. And if firms like Khosla Ventures, with their history of bold bets on the future, are willing to explore the space, it may be just the beginning of a broader shift in the industry.
