Embedding VC Newsletter - Oct 2024

OCT 2024 NEWSLETTER

Hi friend,

Hope you had a Spooky Halloween 🎃! A flurry of late-month activity delayed this newsletter slightly, but we're excited to share all the good news. Welcome to the October edition of the Embedding VC Newsletter, where we provide insights into the latest developments in our portfolio and the AI ecosystem.

📋Our Field Notes

AI Presentations – Gaps and Opportunities: we’ve had the privilege of speaking with several incredible founders developing AI-empowered presentation tools with a specific vertical focus, designed to make creating presentation materials more efficient. Their unique advantage lies in integrating public research tools (agents) and internal knowledge engines to automate the presentation creation process, significantly boosting productivity. AI-native presentation platforms like Gamma and Tome have experienced rapid growth, with Gamma attracting 20 million users over the past year and Tome becoming the fastest productivity tool to reach 1 million users. These platforms excel by enabling users to generate presentations quickly. However, established players in the space, such as Microsoft PowerPoint, Google Slides, and Canva, have also integrated generative AI features to stay competitive. Despite the impressive growth of these AI-native startups, we remain skeptical about their ability to capture a substantial share of PowerPoint users. If even Google Slides hasn’t dethroned PowerPoint, what strategy could a startup deploy to succeed? We believe there are still opportunities in this space:

  • Go beyond the traditional presentation content types such as text/image/graph, and focus on new modality, such as video, where companies like HeyGen and Synthesia are doing very well, or presenter mode, such as canvas-based presentations

  • Startups could benefit from developing tools that extend beyond standalone presentation generation into knowledge management or offer vertical-specific solutions with deeper contextual relevance. Alternatively, enhancing existing workflows with seamless integration rather than aiming for full replacement could be effective. However, we recognize that while this approach can serve core customers well, it may limit market size and long-term defensibility, a common pitfall in application layer startups.

Are you building in this space or do you see it differently? We'd love to hear your perspective.

🏄Embedding News

Early Venture Partner Deal to World's First Universal Autonomous Driving IPO: We are pleased to share that WeRide (NASDAQ:WRD), an autonomous driving technology company, has completed its public listing on Nasdaq. Roger helped sourced and invested in WeRide at their Seed round in 2017 when he was a venture partner at China Growth Capital. Our early backing of WeRide demonstrates our ability to identify and support industry-defining companies from the beginning.

👋New Embedding Vectors 

Embedding VC joins Augment Code Series B: We're thrilled to announce that Embedding VC invested into Augment Code's Series B round in October. In our AI Landscape analysis in our Sep 2024 Newsletter, we highlighted Augment Code among the emerging AI coding unicorns. Our conviction in the company has only grown stronger, as they officially launched the product with impressive early customer testimonials.

👍Vectors In The News

  • Over 3.5 million educators signed up on MagicSchool AI in a year and a half since launch. Education is embracing AI as much or more than any other industry.

  • Featured by Anthropic: MagicSchool was recently highlighted by Anthropic, as a case study highlighting the successful integration of AI in education.

  • Founder Spotlight: Adeel Khan, founder and CEO of MagicSchool, has been recognized for his contributions to AI in education and was featured on Business Insider's 2024 AI Power List, alongside Andrej Karpathy and Luis Von Ahn (CEO of Duolingo) in the Education sector.

  • AWS Marketplace Launch: Entelligence is now available for self-hosting on AWS Marketplace, enabling teams to run the platform entirely within their own AWS environment. The launch addresses enterprise security requirements by allowing complete control over code and data.

  • SDR Agent Release: Respell introduces their SDR Agent that combines custom workflow capabilities with Bland AI's voice technology. The agent enables customizable email generation, lead research, and voice calling capabilities.

  • Product Update: Monterey’s October product release brings AI-powered natural language filters, B2B personalization features, interactive charts for data exploration, and new integrations with Survey Monkey and Reddit (Beta).

  • Product Launch: Mooncake Labs releases pg_mooncake, enabling 1000x faster Postgres analytics. Now live on Neon, the tool lets users query data without complex data pipelines.

☕What We Read at Embedding

  • Generative AI’s Act o1: Sequoia Capital suggests that the focus of AI development is shifting from “thinking fast” — rapid-fire pre-trained responses — to “thinking slow” — higher-order reasoning and agentic capabilities. 

  • A System of Agents brings Service-as-Software to life: Foundation Capital discusses the three-phase evolution of software from simple workflow automation to a "System of Agents," driven by artificial intelligence.

See you soon! We are Embedding VC.

Embedding VC invests in early-stage Generative AI startups.