Member Article

Octopus Ventures hoping to ride the AI boom as it looks back on some high-profile exits

London-headquartered venture capital house, Octopus Ventures, is celebrating its tenth anniversary this month and is looking back on a decade’s worth of high-profile investments that have helped propel some of the UK’s biggest tech firms onto the world stage.

The VC is one of the biggest names in VC and has grown from an initial fund of £30m to manage in excess of £660m with investments now totalling £100m per year across a roll call of some of the continent’s most disruptive tech businesses.

Property giant Zoopla, travel company Secret Escapes and the Twitter acquired Magic Pony have been just some of the astute bets by the investor over the years, while its offices in New York and London and Venture Partners in San Francisco, Shanghai and Singapore have helped high-potential firms grow and expand overseas.

Alex Macpherson, Head of Octopus Ventures, has credited the firm’s international expansion in allowing it to support startups and scaleups on their journey, with its growing global network helping portfolio companies to reach their potential.

Macpherson said: “Access to investment is key for our entrepreneurs but backing these businesses has never just been about providing financial support. Helping entrepreneurs create defining moments for their businesses has also always been fundamental to our relationships.

“Our global expansion is a really significant step for us, and is a vital piece in the puzzle when it comes to providing the additional value our portfolio deserve and in reality, should expect, in order to reach their potential.”

Big exits in the aforementioned Magic Pony (which sold to Twitter for £102m), as well as SwiftKey (sold to Microsoft £172m) and Evi (which Amazon acquired in 2013 and became the basis for its wildly successful Alexa voice assistant) were successful early punts on the potential of artificial intelligence (AI) and machine learning.

Now the VC is placing an even bigger bet on the tech, which has the potential to transform wide-ranging sectors including marketing and medicine to manufacturing and accounting amongst many, many others, after earmarking £120m to invest in the next generation of AI businesses.

Announced back in January, Octopus raised the nine-figure sum to invest in promising AI firms, with interest in the fund highlighting the leading role the UK, and London in particular, is playing in applying deep and machine learning techniques across a whole raft of industries.

Massive global players including Google’s DeepMind have their base in the capital while the thriving ecosystem of AI technicians and academics has made London a veritable AI hotbed.

Commenting earlier in the year when the tranche of funding was originally announced, Macpherson said that the vast bulk of companies coming to Octopus nowadays where utilising machine learning in some form or other.

He said: “We have expertise in the machine-learning field, but the challenge today is pretty much every business that comes through to us is machine learning or artificial intelligence.”