Khosla Ventures among VCs experimenting with AI-infused roll-ups of mature companies
Venture capitalists have always focused on investing in companies that leverage technology to either disrupt established industries or create entirely new business categories.
But some VCs are starting to flip the script on their investing styles. Rather than funding startups, they are acquiring mature businesses –such as call centers, accounting firms, and other professional service firms—and optimizing them with artificial intelligence to serve more customers through automation.
This strategy, often likened to private equity roll-ups, is being employed by firms such as General Catalyst, Thrive Capital, and solo VC Elad Gil. General Catalyst, touting this as a new asset class, has already backed seven such companies, including Long Lake, a startup that scoops up homeowners' associations in an effort to make the management of communities more streamlined. Since its founding less than two years ago, Long Lake has secured $670 million in funding, according to PitchBook data.
While the strategy is still new, a few other venture outfits have told TechCrunch that they are also considering trying out the investment model.
Among them is Khosla Ventures, a firm known for making early bets on risky, unproven technologies with long development timelines.
"I think we'll look at a few of these types of opportunities," Samir Kaul, general partner at Khosla Ventures, told TechCrunch.
Interestingly, this PE-flavored approach could be a surprising benefit to the multitudes of AI startups VCs are backing. If a VC marries old businesses with new technology, AI startups wanting to serve these industries would essentially gain instant access to large, established clients.
According to Kaul, such access would be helpful when new startups have difficulties securing customers on their own. With the rapid rate of change in AI, the number of startups pouring into the market, and the historically long sales cycles involved in selling to enterprises, such difficulties apply to many AI startups.
But Khosla Ventures wants to proceed with caution. "The companies we're looking at are very unlikely to lose money," Kaul said, but he doesn't want the strategy to ruin the firm's strong return track record. "My biggest stress in life is I'm managing other people's money, and I want to make sure that I continue to be a good steward of it."
While Khosla Ventures is starting to "dabble" in AI roll-up investments, Kaul explained that the firm wants to do a few deals to assess if such investments deliver strong returns for the firm before possibly raising money for some kind of vehicle specifically aimed at this investment strategy.
If early bets pan out, Khosla would likely partner with a PE-style firm to help it with acquisitions rather than hire a team. "We wouldn't do it alone, we don't have that expertise," he said.
This article originally appeared on TechCrunch at https://techcrunch.com/2025/05/23/khosla-ventures-among-vcs-experimenting-with-ai-infused-roll-ups-of-mature-companies/
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OpenAI Can Stop Pretending
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Last December, after facing concerns from potential investors that pouring money into the company wouldn't pay off because of the nonprofit mission and complicated governance structure, the organization announced plans to change that: OpenAI was seeking to transition to a for-profit. The company argued that this was necessary to meet the tremendous costs of building advanced AI models. A nonprofit arm would still exist, though it would separately pursue 'charitable initiatives'—and it would not have any say over the actions of the for-profit, which would convert into a public-benefit corporation, or PBC. Corporate backers appeared satisfied: In March, the Japanese firm Softbank conditioned billions of dollars in investments on OpenAI changing its structure. Resistance came as swiftly as the new funding. Elon Musk—a co-founder of OpenAI who has since created his own rival firm, xAI, and seems to take every opportunity to undermine Altman—wrote on X that OpenAI 'was funded as an open source, nonprofit, but has become a closed source, profit-maximizer.' He had already sued the company for abandoning its founding mission in favor of financial gain, and claimed that the December proposal was further proof. Many unlikely allies emerged soon after. Attorneys general in multiple states, nonprofit groups, former OpenAI employees, outside AI experts, economists, lawyers, and three Nobel laureates all have raised concerns about the pivot, even petitioning to submit briefs to Musk's lawsuit. OpenAI backtracked, announcing a new plan earlier this month that would have the nonprofit remain in charge. 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Hinton is one of the Nobel laureates who has publicly opposed the tech company's for-profit shift, alongside the economists Joseph Stiglitz and Oliver Hart. The three academics, joining a number of influential lawyers, economists, and AI experts, in addition to several former OpenAI employees, including Hilton, signed an open letter in April urging the attorneys general in Delaware and California—where the company's nonprofit was incorporated and where the company is headquartered, respectively—to closely investigate the December proposal. According to its most recent tax filing, OpenAI is intended to build AGI 'that safely benefits humanity, unconstrained by a need to generate financial return,' so disempowering the nonprofit seemed, to the signatories, self-evidently contradictory. Read: 'We're definitely going to build a bunker before we release AGI' In its initial proposal to transition to a for-profit, OpenAI still would have had some accountability as a public-benefit corporation: A PBC legally has to try to make profits for shareholders alongside pursuing a designated 'public benefit' (in this case, building 'safe' and 'beneficial' AI as outlined in OpenAI's founding mission). In its December announcement, OpenAI described the restructure as 'the next step in our mission.' But Michael Dorff, another signatory to the open letter and a law professor at UCLA who studies public-benefit corporations, explained to me that PBCs aren't necessarily an effective way to bring about public good. 'They are not great enforcement tools,' he said—they can 'nudge' a company toward a given cause but do not give regulators much authority over that commitment. (Anthropic and xAI, two of OpenAI's main competitors, are also public-benefit corporations.) 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Faruqi & Faruqi Reminds DoubleVerify Investors of the Pending Class Action Lawsuit with a Lead Plaintiff Deadline of July 21, 2025
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CNBC
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Tech companies are requiring employees to learn and use AI at work—here's the best way to do that, experts say
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