Index Ventures Leads $50 Million Investment in AI Startup Weaviate

Weaviate, an infrastructure startup whose technology is essential for companies trying to build generative AI tools, could probably have landed a higher valuation for its recent Series B given all the investor hype around AI right now. Instead, CEO and co-founder Bob van Luijt said he struck a quick deal after meeting with only three firms. Index Ventures led the $50 million round that closed earlier this month.

The four-year-old’s Series B valued it at $200 million, which is actually reasonable compared to other recent AI deals, like that of Weaviate’s competitor, Pinecone, which recently raised at a $700 million valuation, according to Insider. 

Weaviate’s deal still quadrupled its last valuation but leaves room for it to raise at a higher price in the future. Van Luijt’s priority wasn’t an eye-popping valuation, he said. It was to make sure his current and future employees benefit from future increases in the share price—a concept that fell to the wayside as startups battled for unicorn price tags of a billion or more during the historic bull run—and to finish the capital raising process quickly, so he could get back to work

It’s really hard to raise venture capital right now, but it’s easier for founders that have adopted a more realistic view on valuation, as van Luijt’s experience shows. Founders should know that by now. They should also know that there are dangers in raising at the highest possible price. Just look at the hundreds of companies that secured outlandish valuations during the peak of the market and are now struggling to raise any money, let alone at a higher valuation.