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The F42 brief #018
Here’s your Monday dose of The F42 Brief.
What’s inside »
📈 Trending Now
The one thing that’s making all the noise …. with a bit of fact checking.
💸 New Funds looking to give you cash
Who has launched a new fund to invest in startups last week.
💡Innovator Spotlight
Founders that are doing stuff differently.
🛠️ Tool of the Week
Something useful to up your startups velocity.
📌 Note to Self
Stuff I constantly remind myself about, don’t want make the same mistakes again.
📈 Trending Now
DeepSeek , Stargate, two very different approaches.
This week, the AI spotlight has firmly settled on a classic underdog story, but with a modern twist. While Stargate has rolled out its colossal $500 billion project, betting on financial clout to dominate the AI sphere, High Flyer's ( a hedge fund, got to love how HF peeps just think differently, but then again I am bias)) DeepSeek has demonstrated something far more groundbreaking. They’ve proven that you can train competitive AI models on a shoestring budget, challenging the assumption that bigger spend necessarily means better tech.
🚀 Rethinking AI Investment
Stargate's strategy banks on the traditional idea: immense investment equals immense success. They pour resources into their AI initiatives, assuming that this will naturally lead to industry leadership. However, DeepSeek's approach turns this notion on its head. They’ve efficiently trained a model that competes with the likes of OpenAI for less than $5 million—a fraction of the usual costs associated with such developments. They have passed this onto users and smashed token prices by 5x and their latest R1 model was launched just six weeks after ChatGPT's O1, and is 27x cheaper the openAI, demonstrating not only speed but also significant cost-efficiency.
⭐️ The Real Buzz About DeepSeek
The tech community isn’t just paying attention to DeepSeek because it’s a feel-good story; they're recognising a potent shift in the AI paradigm. DeepSeek's achievements suggest that the future of AI development could lean heavily on smarter, more economical strategies rather than simply throwing money at the problem. This move towards cost-effective development is resonating more with a sector that’s becoming increasingly cautious about the return on massive investments. Do we need all these chips for the majority? Is the energy suck as great as thought based on a few case studies who maybe didn't build efficiently?
👀 Implications for AI's Future
This week's been quite a stir in the AI world, hasn't it? DeepSeek's success is not just a win for their team; it's a signal to the entire industry that the economics of AI are changing. The industry is now acknowledging that effective and competitive AI solutions can come from smaller, more nimble teams with far less financial input. This revelation could encourage a broader shift towards innovation that prioritises intellectual and operational agility over sheer financial muscle.
While DeepSeek's been turning heads with its cost-effective models, giants like OpenAI and Google DeepMind aren't just sitting back. They're pushing the boundaries with models like o1 and the upcoming o3, and Google's Gemini 2 looks set to raise the bar even higher.
Despite the noise, the market's far from saturated. The arrival of accessible, open-source AI is actually expanding the field, inviting more players to the table and potentially speeding up our march towards more advanced AI. It's an exciting time, with each new development hinting at a richer, more competitive landscape. Here's to seeing where this momentum takes us!
If you have not joined the Fusion42 Community on Telegram — A space for Founders, Framers, and Funders who show up to get **it done,
it is probably time to do so.
For the ❤️ of Startups
💸 New Funds Looking to Give You Cash
$13.3 billion Across 15 New Funds
Fifteen newly launched venture capital funds are targeting transformative industries and pivotal markets, aiming to reshape the global startup ecosystem. With over $13 billion announced, here's where the money is flowing:
Where the Money is Going
🌍 Geography at a Glance
Asia (75% of funds) – Dominating with large-scale investments like the $8.2 billion National AI Industry Investment Fund in China and the $1.36 billion Shanghai Engine Fund, focusing on AI, advanced manufacturing, and scientific innovations.
North America (20% of funds) – Early-stage funds like Madrona's $770 million targeting transformational technologies, and Mastercraft Ventures focusing on Wisconsin-based startups.
Europe (1% of funds) – Emerging innovation hubs in Cyprus (€26M 33East Fund) and Greece (€12.5M Evercurious Fund) highlight a focus on pre-seed deep tech and regional accelerators.
MENA (4% of funds) – The $500M 500 MENA Fund addresses growth-stage tech companies in underserved Middle Eastern and North African markets.
🎯 Sector Priorities
Artificial Intelligence (AI): 67% of funds – From China's $8.2B AI fund to Madrona's investments in AI-enabled biology and developer tools, AI is driving significant global investment.
Deep Tech & Quantum Tech: 8% of funds – Quantum technology (€60M QDNL Participations Fund) and deep tech innovations (€12.5M Evercurious Fund) are bridging science and commerce.
Health & Life Sciences: 4% of funds – Red Tree Venture Capital's $350M fund prioritises West Coast life sciences.
Fintech & Blockchain: 3% of funds – Focused on financial technology (SamVed VC, AgileGTM Blockchain Fund), supporting emerging markets and next-gen solutions.
Other sectors: 18% of funds – Includes agritech, renewable energy, and frontier tech, as highlighted by Eximius Ventures and SamVed VC.
🚀 Investment Stages
Early Stage: 40% of funds – A strong focus on pre-seed to Series A, supporting innovations in AI, deep tech, and life sciences. Examples include SamVed VC, Eximius Ventures, and 33East Fund.
Growth Stage: 60% of funds – Larger funds like VCFA Venture Partners VII ($122.5M) and the National AI Industry Investment Fund are scaling companies with proven market fit.
The data reveals a clear trend toward concentrated funding in AI and advanced technologies, with Asia leading the charge while MENA addresses funding gaps in scaling startups. These funds are expected to catalyse innovation, particularly in AI, quantum tech, and transformative sectors.
Evercurious VC
Evercurious Fund I: A €12.5 million venture capital fund focusing on pre-seed and seed-stage deep tech startups. It aims to connect Greece's emerging deep tech ecosystem with Europe's leading innovation hubs, targeting ventures at the intersection of hardware and software.
VCFA Group
VCFA Venture Partners VII, L.P. (VCFA VP VII) is a $122.5 million fund focusing on secondary market investments, particularly smaller, complex purchases of later-stage venture capital and growth equity assets.
Shanghai Engine Fund
The Shanghai Engine Fund is a US$1.36 billion venture capital investment fund officially registered in January 2025. It aims to fast-track the commercialization of scientific innovations, focusing on six key industries: future health, information technology, energy, space, materials, and advanced manufacturing. The fund targets early-stage "0-to-1" innovations, bridging the gap between university research and market-ready solutions.
SamVed
SamVed VC is a $50 million fund targeting early-stage Indian startups in sectors such as AI, fintech, healthcare, agritech, e-commerce, upskilling, and consumer brands. The fund plans to invest $80K-$120K in pre-seed rounds and $250K-$1M in pre-Series A rounds.
Red Tree Venture Capital
Red Tree Venture Capital Fund II: A new fund targeting $350 million for early-stage life sciences investments, with a focus on the West Coast. The fund has recently held its first close.
QDNL Participations
QDNL Participations Global Fund: A €60 million fund targeting early-stage quantum technology startups worldwide, with an initial close of €25 million. The fund focuses on quantum computing and quantum security startups moving towards commercialization.
Mastercraft Ventures
Mastercraft Ventures is a new venture capital fund focused on investing in early-stage companies located in Wisconsin, particularly in southern regions. It aims to support startups with initial investments of $400,000 to $500,000.
Madrona Venture Group
Madrona Fund X and Acceleration Fund IV, raising a total of $770 million. These funds will focus on investing in innovative founders building transformational companies across technology areas, including Applied AI, Developer Tools, Cloud, and AI-Enabled Biology, targeting both enterprise and consumer audiences.
Guozhi Investment.
The National AI Industry Investment Fund is a 60 billion yuan (US$8.2 billion) venture capital fund focused on advancing China's artificial intelligence capabilities. It will support general equity investment and asset management in the AI sector.
Eximius Ventures
Fund II: A$30 million fund targeting pre-seed investments in 25-30 startups across fintech, AI/SaaS, frontier tech, and consumer tech sectors. Initial investments of $500,000 each, with half the corpus reserved for follow-on investments.
University of Virginia Darden School of Business
The Damon DeVito Venture Velocity Fund is a newly established venture capital fund created to support early-stage ventures and entrepreneurs associated with the Darden School of Business. It focuses on projects demonstrating courageous vision, resilient adaptability, emotional intelligence, collaboration, and mentorship.
Astana Hub
Kazakhstan plans to establish a venture capital fund of funds with a target size of $1 billion. The fund will be launched at Astana Hub under the jurisdiction of the Astana International Financial Centre (AIFC). It aims to invest in high-tech companies abroad, focusing on areas such as financial technology, medical technology, and artificial intelligence. Initial capital commitments of $130 million have already been secured.
AgileGTM
AgileGTM Blockchain Fund is a European pre-seed VC investing in B2B use cases of blockchain. The $10 million fund focuses on early-stage B2B blockchain startups that provide value to businesses and aims to impact the world for decades.
500 Global
500 MENA, L.P.: A new fund dedicated to investing in high-growth technology startups across the Middle East and North Africa (MENA) region, focusing on companies with proven product-market fit and significant growth potential. The fund aims to address the critical funding gap MENA founders face, particularly in the expansion stage.
33East
33East Venture Capital Fund: A €26 million fund launched in January 2025, focusing on pre-seed and seed-stage startups with connections to Cyprus. The fund aims to invest between €500,000 to €1 million per company, with an additional €2.5 million allocated for early-stage acceleration.
💡Innovator Spotlight
This is a glimpse into the future.
OpenAI has just unveiled its first AI agent, "Operator," a browser-based assistant designed to automate tasks like booking restaurants directly from the web.
"Operator" operates by interacting with websites, using a sophisticated model that enables it to perform tasks by understanding and navigating web interfaces. Although still in its early stages and occasionally making errors, OpenAI is optimistic about its rapid improvement.
Sam Altman, OpenAI’s CEO, highlighted this launch as just the beginning, promising that more sophisticated agents are on the horizon. For now, "Operator" is available to Pro users in the U.S., with plans to extend access to other user tiers and eventually to the European market.
The underlying technology combines OpenAI's latest advancements in machine learning models with capabilities to interpret and interact with graphical user interfaces. This isn't just about reducing the hassle of mundane tasks; it's about enhancing how we interact with digital environments efficiently.
OpenAI is cautious with the rollout, emphasizing safety and user control in the deployment of "Operator." The AI asks for user confirmation before executing tasks, especially more sensitive ones, to ensure reliability and trust.
As we see these technologies evolve, the potential for AI to streamline our digital interactions grows, hinting at a future where AI assists with a range of tasks, enhancing productivity and convenience.
In the spirit of innovation, this development suggests staying updated with new technologies could be more beneficial than attending conventional networking events. Embracing these tools could offer direct engagement with advancements that have immediate applications and benefits.
🛠️ Tools of the Week
If you love data, here are three tools you should know about:
Julius AI: Similar to ChatGPT but tailored for data analysis. You can upload your data and ask for specific visualizations or analyses, and it will handle them for you. Additionally, it offers pre-built data analysis workbooks for functions like sales forecasting.
Graphy.app This tool allows you to connect your data sources and transform your data into beautiful dashboards that you can use for reporting.
rows.com: This platform is great for connecting with all your marketing data sources. It imports data and automates updates and refreshes, ensuring your data is always current and ready for analysis.
These tools are designed to streamline your data handling and analysis, making it easier to derive insights and make informed decisions.
📌 Note to Self
Thank you for reading. If you liked it, share it with your friends, colleagues and everyone interested in the startup Investor ecosystem.
If you've got suggestions, an article, research, your tech stack, or a job listing you want featured, just let me know! I'm keen to include it in the upcoming edition.
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For the ❤️ of startups
✌🏼 & 💙
Derek