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- Embedding VC Newsletter - Feb 2025
Embedding VC Newsletter - Feb 2025
Hi friend,
Hope your 2025 is off to a fantastic start 💫! Whether you’re embracing the winter chill or counting down to warmer days, the beginning of the year is all about fresh momentum 🚀.
Welcome to the February edition of the Embedding VC Newsletter, where we provide insights into the latest developments in our portfolio and the AI ecosystem.
👋 Refresh about Embedding VC:
If it is the first time you received our newsletter. As a fresher, we invest $100K to $1M checks into early-stage generative AI startups. If you or your founder friends are building something exciting, feel free to reach out to us at [email protected].
📈 Fund Update
We celebrated Embedding VC’s 1st birthday in December! Reflecting on our journey, it’s incredible to see how far we’ve come. 2024 was a strong year for Embedding VC: we invested in nine companies through our core fund and two growth-stage companies via SPVs. Several portfolio companies have demonstrated significant growth. Below are some key milestones and early results of our core fund, including 12-month performance metrics since our first close in December 2023.

If you are interested in learning more about getting involved with the fund, please email us or directly book a call on Roger’s calendly.
🗞️ Vectors In The News
Updates from Embedding VC portfolio companies:
New Funding Round: MagicSchool AI raised $45 million in Series B, led by Valor Equity Partners, with participation from Bain Capital Ventures, Adobe Ventures, Atreides Management, and Smash Capital. The funding will help expand product and engineering teams, enhance AI capabilities, strengthen partnerships, and grow customer support.
The company now partnered with more than 10,000 schools, with an educator using MagicSchool in nearly every U.S. school district — and in 160 countries around the world.
Major Investment in AI Infrastructure: Groq has received $1.5 billion from Saudi Arabia to scale its AI inference infrastructure in the region. The funding supports the expansion of its Dammam data center, which will power the development of the Saudi Data and Artificial Intelligence Authority’s (SDAIA) Arabic Large Language Model, ALLaM. It also strengthens its partnership with Aramco Digital, which aims to bring the voice-commanded AI model Norous to market.
Acquisition: Respell's team is joining Salesforce to enhance AI-driven agent development. The team will contribute to the Agentforce initiative, aiming to revolutionize business operations with advanced AI agents.
Acquisition: Reforge has acquired Monterey AI to launch Reforge Insight Analytics, with a shared goal of transforming how product teams gather customer insights and improve product strategies.
Public Launch: Flora just launched its AI-powered infinite canvas, designed to make creative workflows smoother. Instead of juggling multiple tools, users can generate and refine text, images, and videos all in one place. The node-based system lets creators build on their ideas seamlessly, making the process more structured and scalable. Check out this demo from founder Weber Wong!
Why Choose Flora: Traditional generative AI can feel like a black box with limited flexibility, while pro design software is often too complex and time-consuming. Flora strikes a balance by offering powerful AI-driven creation without sacrificing usability or creative freedom.
💡 New Embedding Vectors
Embedding VC joins Omi AI’s Seed round
Keywords: AI wearables, Personal AI assistant
What they do: Omi AI is developing the world's first open-source AI wearable device designed to enhance daily productivity by capturing, transcribing, and managing conversations in real-time.
How they stand out: Unlike other AI wearables, Omi focuses on continuous learning and seamless integration. The device offers features like live transcription, extended battery life, and an app marketplace for customization, aiming to seamlessly integrate AI into users' daily lives. They’re also launching a brain-computer interface developer kit.
Co-Investors this round: Tim Draper, Dropbox co-founder, 468 Capital.
✨ Insight
Although news about DeepSeek had been circulating since the release of its open-source v2 model, it wasn’t until January this year that DeepSeek truly made waves across the U.S. tech sector with the launch of its open-source R1 model. This model has outperformed OpenAI’s current o1 model in several public benchmarks. While the SOTA AI model is still OpenAI’s o3, We agreed with the statement that “DeepSeek's advances are more evolutionary than revolutionary.” What sets the model apart is that: 1) it is open source; 2) The significant cost reduction in training—DeepSeek claims it trained the model for only $6 million, a contrast to OpenAI’s estimated ~$100 million cost for GPT-4. Here’s a brief discussion of its technical breakthroughs and implications on the global AI industry on our Substack.
👋 Can’t wait for the exciting spring!
See you soon! We are Embedding VC.
Embedding VC invests in early-stage Generative AI startups.