Differential Ventures Launches $60 Million Fund to Change the Way Businesses Manage Data

Firm looks to invest in B2B SaaS startups who treat data with respect and can be competitive in growing markets.

Differential Ventures, a seed-stage venture capital fund founded by data scientists and entrepreneurs for data-focused entrepreneurs, is pleased to announce continued momentum after launching Fund II with a target of $60 million to invest in seed-stage data science and machine learning companies that collect, analyze, and manage information to change the way businesses operate. The firm has seen strong consistent growth, meeting key milestones set for 2021 including several new hires, growing its portfolio internationally, and opening a new headquarters office in Lower Manhattan.

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“During 2021, we invested in our twentieth company, and our existing portfolio raised over $150 million of follow-on capital to expand their operations,” says Nick Adams, founding partner of Differential Ventures. “With the launch of our second fund, we will be targeting eight to ten new seed investments per year in data science technology across North America and Israel.”

Differential is one of the earliest institutional investors in the startups that are bringing the world into the Data Age. The companies in its portfolio are using data science, artificial intelligence (AI) and machine learning (ML) to remove bias from the hiring process, embed data privacy at the core of technology, deploy deep neural networks on capacity-constrained devices, and exponentially expand human memory.

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“The hype around AI and machine learning has never been greater and it requires a deeply experienced eye to identify the best opportunities,” says David Magerman, founding partner of Differential Ventures. “Since our inception in 2017, we have prided ourselves on our ability to identify, diligence, and support high quality startups for the data-driven world.”

The firm has a healthy skepticism about the ceiling of AI, focusing on investing in companies that solve real problems with believable solutions. The Differential team, made up of data and computer scientists, helps startups strike the appropriate balance between technology, engineering, and user interface, all of which are important and necessary to build and sell products. They encourage ethical products that use and produce data in ways that are not only compliant with today’s regulations but which will remain compliant with regulation and legislation that is likely to come in the next few years.

To date, Differential has invested in twenty startups with five located in Canada and four in Israel. This year, the firm also added a new principal, associate, and operating partner to its team.

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