Radical Reads

Last week Radical Ventures hosted its AGM in Toronto, bringing together Radical portfolio founders, LPs and the Radical team. Among those joining us was Radical Partner, Dominic Barton. Dominic is the former Global Managing Partner at McKinsey & Company and was subsequently the Ambassador of Canada to the People’s Republic of China. Today he is the Chairman of Rio Tinto. Today, Dominic shares his reflections on the Radical AGM (also cross-posted to LinkedIn).

Five years ago, when Radical Ventures launched an institutional fund focused on investing in AI companies, it was the first of its kind. Fast-forward to today, and Radical is a world-leading VC firm. So, how do you go about building a world-class AI venture fund?

As a partner at Radical, I had the opportunity to attend the firm’s annual general meeting last week. Before a room of global institutional investors, the Radical team offered a glimpse into their unique approach to investing in the future of AI. The following are my three key takeaways from this year’s Radical AGM:

Find early conviction in a disruptive thesis

Radical wasn’t afraid to make a bold bet. Jordan Jacobs, Co-founder and Managing Partner at Radical Ventures, highlighted the firm’s founding thesis: AI will replace software and unlock groundbreaking scientific discoveries. The fund was founded on the deep conviction that advancements in AI – particularly those rooted in the transformers-based architecture underpinning generative AI – would soon revolutionize every industry.

Cultivate a powerful network

Relationships are the cornerstone of Radical’s strategy. They have built deep connections with AI pioneers such as Geoffrey Hinton and Fei-Fei Li (who is a Scientific Partner at Radical). The fund also invests in its network. Among Radical’s portfolio are companies led by AI luminaries like Raquel Urtasun, Richard Socher and Pieter Abbeel. Radical understands that networks are not static – they rely on dynamic relationships that need to be developed and honed. With an eye to the next generation of AI innovators, Radical created a program for AI researchers exploring what it takes to commercialize their work. Today, the Radical AI Founders Master Class has 1700 community members from the world’s top industry and academic AI labs.

Create new categories of business 

AI is not only disrupting legacy industries, it is creating entirely new businesses that will transform every aspect of the economy. Radical has looked at over 8400 start-ups and invested in 44. At the AGM we heard directly from four of Radical’s portfolio companies. While working to solve very different challenges, these leaders share a common trait — they are at the forefront of net-new categories of business. Here’s a brief snapshot of what they shared:

• Cohere – Martin Kon, President and COO
  Cohere is one of a cohort of companies including OpenAI and Google DeepMind that is developing the world’s most sophisticated Large Language Models (LLMs). The company’s co-founders include its CEO, Aidan Gomez, the co-inventor of the Transformer architecture which is at the core of Cohere’s platform and modern generative AI. Radical was the first investor in Cohere, leading its 2019 seed investment (investing long before the hype that accompanied the launch of ChatGPT).

• Unlearn – Charles Fisher, Co-founder and CEO
  San Francisco-based Unlearn has devised a powerful way to apply AI to improve clinical trials. Using advanced biostatistics and machine learning, Unlearn creates “digital twins” of clinical trial participants, reducing the number of actual humans that need to be recruited for control arms. This makes clinical trials cheaper and faster to execute, ultimately enabling life-changing therapeutics to reach patients sooner. Unlearn has received support from both the FDA and EMA for the use of its technology in clinical trials and the company has partnerships with the world’s leading pharma and biotech companies.

• DatologyAI – Ari Morcos, Co-founder and CEO
  AI models are a reflection of the data on which they are trained. Put another way: models are what they eat. Training models on the right data can drive dramatic improvements in model performance and – just as importantly – in model efficiency. Data curation for self-supervised learning remains a challenging, cutting-edge research problem. DatologyAI was founded to democratize this critical part of the AI infrastructure stack, making model training more accessible to all through a platform that automates data curation at scale.

• Intrepid Labs – Dr. Christine Allen, Co-founder and CEO
  The formulation step is a critical part of pharmaceutical product development and manufacturing, as it determines the final drug product’s safety, efficacy, and stability. Successful formulation requires careful selection and optimization of manufacturing processes, along with rigorous quality control to ensure a safe and effective final product. Intrepid Labs generates novel formulations for pharmaceutical drugs that have higher efficacy, lower cost, and chemical properties optimized for market viability. The company’s vision is to bring better treatments to patients, faster. Intrepid is a spin-out of the Vector Institute for Artificial Intelligence, the research institute that was co-founded by Radical’s Jordan Jacobs and Tomi Poutanen, among others.

Building a world-class AI venture fund requires a bold thesis, a powerful network, and the ability to identify and support new categories of business creation. By adhering to these tenets, Radical has positioned itself to capture the transformative potential of artificial intelligence.