Titanium Ventures builds AI tools to unearth next $1bn tech unicorn

A major VC fund is using AI to unearth the next $1bn tech unicorn and says its tool has already identified eight ‘standout portfolio companies’ that will deliver for investors.

Commercial services platform BuildOps, which now has a $1bn valuation after its latest raise, is one company that Titanium Ventures unearthed using AI. Picture: Supplied

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Titanium Ventures is turning to artificial intelligence to unearth the next unicorn as it uses the much-hyped technology to determine which companies are likely to deliver the best returns for its investors.

The fund – originally spun out of Telstra a decade ago before the telco sold its stake, exiting the venture capital business last year – says its proprietary AI tools have already identified eight “standout portfolio companies”.

These include BuildOps – which now has a $1bn valuation after its latest raise – LambdaTest, Coalesce, Alvys and others, which Titanium general partner Saad Siddiqui had delivered a combined internal rate of return of 17 per cent as of March this year.

Titanium general partner Saad Siddiqui. Picture: Supplied

He said this surpassed the latest fund benchmarks reported by Cambridge Associates, in which the top 5 per cent achieved a net IRR of 4.5 per cent.

It comes as venture capital begins to rebound after a sluggish few years, with global investment soaring to $US126bn in the three months to March 31, from $US118bn the previous quarter, according to KPMG’s latest pulse report into the sector.

The period included eight $US1bn-plus deals, one of which was a $US40bn raise from ChatGPT-maker OpenAI.

But KPMG said deal volume declined quarter-on-quarter as “many VC investors paused to evaluate whether market shifts were temporary”, while geopolitical uncertainty over Donald Trump’s trade war spooked some funds.

Against this backdrop, Mr Siddiqui said: “We’ve harnessed AI models to identify promising companies, streamlining due diligence and cutting down on unnecessary delays. AI revolutionises industries, leading its application in venture capital to be the best partner for our entrepreneurs.”

But Mr Siddiqui said the technology did not replace the need for human connections.

“While our advanced tools are noteworthy, entrepreneurs choose us for more than just our efficiency – they value our ability to connect them with over 1600 customers, link them with high-calibre talent, and offer insights into industry trends,” he said.

Among the AI programs Titanium built is an automated financial analysis tool called X-Ray, which Mr Siddiqui said the fund used to evaluate potential investments. He said X-Ray green-lit 12 investments which have resulted in a net IRR of 15.5 per cent.

“These outcomes showcase Titanium Ventures’ ability to not only identify superior investment opportunities but also validate that a company is likely to show strong growth using advanced ML (machine learning) and AI tools,” he said.

In total, Titanium Ventures sourced 25 per cent of its Fund III investments through data-driven methods, while Mr Siddiqui said three-quarters were benchmarked “rigorously using their sophisticated tools”.

Originally published as Titanium Ventures builds AI tools to unearth next $1bn tech unicorn