SignalFire, a data-driven venture firm based in the Bay Area, has raised $1 billion for its fifth and largest fund. The firm plans to use these funds to invest in early-stage applied AI startups.

Founder Chris Farmer shared his thoughts on the firm’s progress over the past 12 years, noting that this fund is a strong validation of their success. “We’ve built a strong portfolio with companies we backed early on that are now scaling up,” he said.

With the addition of this new fund, SignalFire’s total assets under management now stand at $3 billion. The firm’s previous fund, launched in February 2023, was valued at $900 million.

SignalFire’s new investors include major U.S. public pension funds, an Asian sovereign wealth fund, a global bank, and a large insurer. The firm’s existing investors include endowments, foundations, family offices, and fund-of-funds.

Data-Driven Investment Strategy

SignalFire stands out for its machine-learning platform, Beacon AI, which powers much of the firm’s operations. “Beacon AI is the backbone of our firm,” said Farmer. The platform helps with sourcing deals, evaluating opportunities, supporting portfolio companies, and talent recruitment.

Beacon AI analyzes data from 80 million entities and 650 million people to detect growth signals, benchmark companies, and support overall portfolio success.

Investment Plans and Focus

SignalFire’s latest fund will be deployed over the next 2.5 years, with the firm planning to make approximately 100 pre-seed investments ranging from $100,000 to $1 million. The firm also plans to invest $1 million to $5 million in around 60 seed-stage companies.

For Series A and B rounds, SignalFire will commit between $5 million and $30 million, focusing on companies it has previously invested in at the seed stage. Additionally, the firm’s Executive In Residence (XIR) program will make investments between $15 million and $30 million in early-stage companies with a $2 million to $10 million run rate. The XIR program pairs seasoned executives with promising new companies in SignalFire’s portfolio.

Notable Investments

SignalFire’s applied AI investments include EvenUp, which provides legal tech for personal injury firms, Stampli, an accounts payable startup, and Horizon3.ai, a cybersecurity company specializing in penetration testing. Other investments include Grow Therapy, a platform for therapist scheduling, and Monarch Money, which focuses on household budgeting.

SignalFire has also backed Whop, a digital goods marketplace similar to Shopify.

One of the firm’s most successful exits was Frame.io, a video collaboration platform acquired by Adobe in 2021 for nearly $1.3 billion.