Family office scouts for opportunities leveraging AI tech
Single family office Click Ventures, which is based in Singapore and Hong Kong, is actively pursuing opportunities in artificial intelligence (AI) that allows companies to scale operations, personalise customer interactions, and make rapid data-driven decisions.
The family office invests in emerging VCs that look for startups leveraging new AI technologies to redesign business processes, according to Carman Chan, founder and managing partner at Click Ventures.
“The VCs we invest in should be in turn investing in startups that are making use of the latest AI to automate internal workflow as well as providing AI enabled service to users,” Chan told AsianInvestor.
“The disruption created by AI is exciting and massive and is exemplified by cases where the usage of the technology led to a 50% reduction in operating costs and the rapid evolution of business models,” Chan explained.
Over the next one-to-three years Click Ventures will be heavily focused on generative AI and all related aspects.
“Just as the internet era transformed the physical world into a digital one, AI represents a new paradigm shift. Unlike streaming or location-based technologies, which enhance existing systems, AI acts as a complete operating system upgrade for all industries,” Chan said.
TOP USE CASES
One use case for generative AI is in creating virtual labs where various materials and scenarios can be tested simultaneously. GenAI possesses the capability and intelligence to conduct testing in parallel infinitely, according to Chan. This capability accelerates the research and development process, making it highly disruptive in its approach.
Click Ventures is directing its attention to business models that use these capabilities.
The family office is also actively observing the development of the AI agents space. GenAI models like ChatGPT until last year were limited to text or image-based interactions with people, simulating human-like responses.
AI agents, on the other hand, can now execute a wide range of projects and tasks, often leveraging external tools to complement their capabilities. For instance, with function call, AI agents can perform tasks using a calculator, web browsers, and other such tools.
“This ability to automate numerous daily processes makes AI agents highly versatile and valuable in various contexts,” Chan noted.
“The next step is transitioning this technology to interact with the physical world, creating tangible applications.”
Two other areas ripe for AI adoption are ones where Chan sees immense growth potential.
Firstly, in terms of connecting the digital and physical worlds, AI-enabled objects are becoming autonomous.
“Already, we see primitive versions of AI-enabled objects in hospitals and libraries, but these are just the beginning. In the future, humanoid robots will become much smarter, able to communicate verbally and interact with humans in sophisticated ways.
"Autonomous educational toys, for example, will soon be new generation of AI-powered [gadgets],” noted Chan.
A second focus area is how AI is performing real-time decision-making, involving immediate choices and based on current, incoming data rather than historical information.
An example is Tesla's autonomous driving system, which continuously receives and processes real-time visual data to make split-second decisions while on the road. This approach contrasts with older AI that rely on historical data for analysis and decision-making such as the large language model.
ACCELERATED DEVELOPMENT
The application of AI – by virtue of its scalability and variety of use cases – can have a significant impact on a company’s venture-capital fundraising journey, especially in terms of its early-stage venture funding experience.
AI’s impact can be seen particularly when it comes to the revenue that companies find they can generate within a shorter period of time. As startups progress from the seed stage to Series A, funding rounds become more expensive, reflecting the increased maturity and potential of the business
“With the integration of AI, startups can enhance their operations, improve efficiency, and drive revenue growth. This increased revenue potential at the Series A stage often justifies the higher costs associated with this stage of funding,” Chan noted.
For family offices, the interest in AI is evident, yet the newness of this field means that many teams lack sufficient knowledge about its potential to revolutionise traditional processes.
Chan felt that for most family offices, it's safer to invest in AI through specialised fund managers as they would typically have deeper insights and information compared to a family office team, who usually need to invest across different asset classes.
She added that for family offices that prefer to do direct investing, participation in later-stage opportunities is generally considered safer due to the extensive validation that occurs at each funding round.