Tola Capital closes Fund III to Invest in the Next Gen of AI Companies

With Fund III, Tola Capital will invest $230 million to fuel early-stage AI startups that change the way the world works

Tola Capital, a venture capital firm investing in the next generation of enterprise software enabled by artificial intelligence (AI), today announced the close of Tola Capital III, LP at $230 million. The fund will be deployed to Seed and early-stage startups that are revolutionizing the enterprise software industry with the use of AI. The latest fund brings Tola Capital’s total funds raised to date to $688 million.

Tola Capital backs early-stage founders who are building the next wave of AI companies. The team has overseen more than a dozen exits from its portfolio companies, including Clipchamp (acquired by Microsoft), OSIsoft (acquired by AVEVA), hybris (acquired by SAP), and has sold portfolio companies to numerous other enterprise players including Oracle, Cisco, Verizon, Mastercard, and Rapid7.

Tola Capital was founded in 2010 by experienced software operators at the forefront of cloud computing’s rise. Prior to co-founding Tola Capital, managing director Sheila Gulati owned the enterprise IT strategy for Microsoft, launched the Microsoft Azure cloud platform, and ran the database and developer tools businesses. Gulati uses her deep knowledge of how software can change and grow businesses to help drive the growth of AI companies alongside her team. The Tola team is composed of former operators who built and led cloud and enterprise software businesses at Microsoft and also invested in, partnered with, or acquired dozens of now-leading enterprise software companies.

IDC forecasts the overall AI software market will approach $791.5 billion in revenue in 2025. Tola has been at the forefront of the rise of AI since its founding and invested in startups leveraging AI, including Pulumi, Klarity, Simpplr, and Nooks. Going forward the firm will use the new capital to invest in companies specializing in multiple areas of AI, including enterprise scaffolding for AI, responsible AI, AI security, app layer AI as well as others.

“The cloud was the catalyst for incredible value creation over the past decade. Having been at the forefront of that shift and opportunity, I foresee the same potential when it comes to AI, along with some key differences,” said Sheila Gulati, co-founder and managing director of Tola Capital. “AI will have a much broader impact – changing the way that we all work, creating tremendous productivity gains. It will also happen in a much faster timeframe. At Tola Capital, we are partnering with founders who are leading this transformation and ushering in the new world of work.”

Alexander Dreiling is the founder and CEO of Tola portfolio company Clipchamp which was acquired by Microsoft in 2021 and is now Microsoft’s core video product. Like many Founders in the Tola portfolio who have experienced liquidity events, Alexander is now an investor in Tola. “The Tola team was a true partner in our journey with Clipchamp, providing guidance and resources as we built out our go-to-market function and product roadmap for the enterprise. I am excited for the additional companies that will benefit from Tola’s third fund and expertise, just as we did.”

With its third fund, Tola Capital is aiming to invest in 25 to 30 companies globally. The average check size will range from $1 million to $4 million for Seed stage companies and $5 million to $15 million for Series A and B. The firm has already deployed capital to nine companies: Arcus, Bluebean, ESG Flo, FeatureByte, Fetcher, Holistic AI, Langsafe, Lumeus, and Zilla.

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