Tola Capital Secures $230 Million in Funds to Support Enterprise Software Focused AI Startups

by Alisa Davidson

Published: November 30, 2023 at 3:44 am Updated: November 30, 2023 at 3:44 am

by Victor Dey

Edited and fact-checked:
November 30, 2023 at 3:44 am

In Brief

Enterprise software focused VC firm Tola Capital has secured $230 million in funding to help early-stage AI startups.

Tola Capital Closes $230 Million Fund III to Support AI Startups Focused on Enterprise Software

Tola Capital — a venture capital firm focused on artificial intelligence (AI) enterprise software investements, has announced the successful closure of its third fund, securing $230 million in capital commitments. The funding is the VC’s largest amount raised to date and the primary focus will now be on investing in seed and early-stage startups that explore the potential of AI to enhance enterprises.

Founded in 2010 by a former Microsoft enterprise IT strategy head, Tola Capital comprises a team of experienced software operators who previously built and led cloud and enterprise software businesses at Microsoft.

The firm has been actively involved in AI since its inception, having invested in startups leveraging AI technologies, including Pulumi, Klarity, Simpplr and Nooks.

Tola Capital’s previous two funds yielded over a dozen exits, including Clipchamp, a video software company acquired by Microsoft; OSIsoft, a data management company acquired by AVEVA; and Hybris, an e-commerce customer tool acquired by SAP.

The new fund is poised to invest in 25 to 30 companies, allocating between $1 million and $4 million for seed-stage companies and $5 million to $15 million for Series A and B. To date, the firm has already deployed capital to eight companies, including Arcus, ESG Flo, FeatureByte, Fetcher, Holistic AI, Langsafe, Lumeus and Zilla.

Cumulatively, including the newly raised fund, Tola Capital has amassed a total of $688 million in investments. The firm’s primary investment focus remains on the enterprise framework of AI, encompassing areas such as responsible AI, AI security and app layer AI.

Momentum Grows for AI in Enterprise Software

According to the IDC report, the global AI software market is projected to generate nearly $792 billion in revenue by 2025.

Moreover, the AI applications in enterprise software have captured the attention of Big Tech companies, who are actively exploring the field.

This week, Amazon unveiled its latest AI chatbot, Q, created to aid users in business intelligence, programming, and configuration use cases. This initiative follows the earlier introductions of Microsoft‘s Copilot for Azure and Google Cloud’s Duet AI—both serving as chat-driven assistants for cloud customers.

Despite the downturn in the fundraising environment over the past year, the significant interest in AI recently has demonstrated that it is an opportune time for companies to raise new funds.

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About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and engagement with scientific writing.

Alisa Davidson