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- Embedding VC Newsletter - September 2025
Embedding VC Newsletter - September 2025
Hi friend,
September didn’t slow the AI world down one bit 🍂. Meta Connect spotlighted AI-powered smart glasses and neural interfaces as the future of computing (well, even trillion-dollar companies’ demos fail). Open AI’s Sora 2 dropped with big upgrades in physics, continuity, and even synchronized audio + a slick new app that lets you cameo in your own generations. As we head into fall, the mix of ambition and imperfection feels like the perfect reminder that the AI story is still very much being written 📝.
Welcome to the September edition of the Embedding VC Newsletter, where we provide insights into the latest developments in our portfolio and the AI ecosystem.
🪩 Join Embedding’s SF Tech Week Event on 10/8
We’re hosting Tech Team 3.0: The Rise of The AI Engineer as part of SF Tech Week by a16z on 10/8 from 2-6pm at Stanford University!
The definition of an engineer is evolving. In tomorrow’s companies, AI systems won’t just be tools — they’ll be teammates. This shift goes far beyond productivity gains ⚡️; it’s reshaping how teams are structured, how talent is recruited, and how quickly products reach the market. For decades, engineering leverage came from adding more people. Today, it’s about orchestrating humans and AI together, enabling a handful of builders to accomplish what once took entire departments.
We believe the AI engineer represents a new frontier of leverage: smaller teams moving faster, experimenting more, and building with a precision and adaptability that simply wasn’t possible before. The implications are massive: from rethinking job roles and workflows, to rewriting the very culture of engineering organizations.
With advanced AI agents 🤖 and tools 🛠️ already reshaping day-to-day work, the live question becomes: how do you design, lead, and scale a team where humans and AI truly build side by side?
We gathered some top founders building in this space, including some of our portfolio companies, to give demos and share their unique insights. Come chat with our founders and join us for an afternoon of live demos, behind-the-scenes playbooks, and real stories from the builders re-architecting teams for the AI era.
💬 Who’s in the room?
• Eric Hou, Engineering @ Augment Code — The Developer AI that deeply understands your codebase
• Poonacha Kongetira, Co-Founder & CEO @ Classie AI — AI-native observability & security for your agent fleet
• Aiswarya Sankar, Founder & CEO @ Entelligence.AI — Engineering agents to streamline team overhead
• Kunal Bhatia, Co-Founder & CEO @ Hexo — AI-powered data infra for MLEs to unify, query & activate knowledge
• Will Zhao, Co-Founder & CEO @ Shiplight AI — AI-native platform that makes end-to-end QA testing 10x easier
…and more!
📅 Date: Oct 8, 2025
⏰ Time: 2–6PM PT
📍 Location: Stanford University
🔗 Register: Space is limited! RSVP now: https://lnkd.in/gEPFVfsb
🚀 Featured Launch
Moonlake AI officially launched to the public today! Huge congrats to the team for what they’ve accomplished. Here’s the Forbes article covering the launch. We’re excited to stand behind their vision alongside Threshold Ventures, AIX Ventures, and NVentures (Nvidia's venture capital arm) in this $28M seed round.
Moonlake is building reasoning models that generate simulations and games—so anyone can create interactive experiences, bring wild ideas to life, and share unforgettable moments with their friends. Their models don’t just generate but reason through which representations, tools, and approaches to use for each unique interactive experience.
Cofounders Fan-Yun Sun and Sharon Lee have assembled a stellar team of Stanford CS PhDs, Math Olympiad, ACM ICPC medalists, and researchers with best paper award.
They’re also hiring for designers, engineers and researchers who are excited about building in the intersection of code generation, (3D) vision and graphics, and RL. Please let us know if you know anyone who’d be a great fit.
From Jianing:
“I first met Sun at the Gates building at Stanford after class, and was immediately drawn into the world he envisioned for Moonlake AI. The vision is bold yet deeply human: building the next generation of reasoning-driven world models, interactive and programmable environments with broad applicability, where creativity meets physics, and where alternate realities become a powerful form of self-expression. It’s about creating worlds we can grow and learn within, and ultimately share with the people we care about.
I couldn’t be more excited to see my Stanford friends Sun, Sharon, and the stellar Moonlake team bring this vision to life. Honored to cheer them on and grateful to play a part in supporting this journey. This is just the beginning, and I’m beyond excited for what’s ahead. 🚀🌙 ”
🎉 Celebrating Portfolio Exit
We’re thrilled to announce that Mooncake Labs has joined Databricks to accelerate their shared vision of Lakebase: a new category of OLTP database built on Postgres and optimized for AI agents. Mooncake’s innovation lets developers and agents run transactions, analytics, and AI workloads on the same fresh data — no brittle ETL pipelines required. With this acquisition, Lakebase gains deep capabilities in real-time mirroring and agent-ready data workflows, unifying applications, analytics, and AI in one platform.
With the Mid-Autumn 🌕🥮 Festival just around the corner, the timing couldn’t be more perfect. Huge congratulations to the founders, the team, and all who’ve been part of this journey. We feel honored to have supported Mooncake along the way, and we can’t wait to see what they build next in the Lakehouse era.
🗞️ Vectors In The News
Updates from Embedding VC portfolio companies:
The leading generative AI platform in education
Shout-Out from Anthropic 🎉: MagicSchool was recognized by Anthropic in their announcement of joining the White House AI Education Taskforce. Check out the post and excited for MagicSchool to keep advancing safe, powerful AI in education.
Specialized AI agents to automate core engineering workflows, integrating directly into your existing processes and working across all of your tools
Product Highlights: Launched Japanese support to continue to penetrate the Japanese market
ELC Event: Founder & CEO Tony Dong spoke at ELC 2025 with Arvind Jain (CEO of Glean), generated strong customer interest
The universal engine for memory
New Supermemory developer platform: Better observability (10x improved memory graph + light mode) and enterprise-ready features like team invites and more
💡 New Embedding Vectors
Embedding VC invests in DeepVista
DeepVista builds AI business context agents to turn every business conversation into a winning outcome. Their VistaBase™ technology constructs a persistent knowledge graph, retrieves the right context for every interaction, drafts personalized communications, and flags critical messages, effectively acting as a personal AI chief of staff.
Founded by ex-Google Brain AI expert Jing Conan Wang, DeepVista solves a critical problem: 30% of work time is wasted hunting for context to craft the right messages. By cutting the waste, DeepVista makes interactions sharper and more impactful. DeepVista also enables Jing to further support the founder community, FounderCoho, which he built — connecting to his deep passion for helping entrepreneurs succeed. We’re excited to partner with DeepVista on this journey.
👋 October, we’re ready. 🤎
See you soon! We are Embedding VC.
Embedding VC invests in early-stage Generative AI startups.