Venture Capital’s Latest Strategy: Private Equity–Style Roll-Ups — The Information

Venture capital firms have increasingly been acting like private equity firms by investing in or buying mature businesses in need of a turnaround. Now those firms are utilizing another PE strategy—rolling up multiple competitors into a single company that can operate more efficiently by combining costs. Venture capital firms such as General Catalyst and 8VC are creating or investing in these types of holding companies in fields such as call center support, accounting and property management. In contrast to PE-style roll-ups, the VC firms are starting companies or backing them before their businesses have proven themselves. To keep costs down, they’re incorporating artificial intelligence software to take over work such as responding to tech support requests. For example, General Catalyst, known for venture investments in Canva and Stripe, helped start Long Lake Management and invested in the firm, which was co-founded by early Ramp director Zach Frankel. Long Lake aims to acquire numer

Venture capital firms have increasingly been acting like private equity firms by investing in or buying mature businesses in need of a turnaround. Now those firms are utilizing another PE strategy—rolling up multiple competitors into a single company that can operate more efficiently by combining costs. Venture capital firms such as General Catalyst and 8VC are creating or investing in these types of holding companies in fields such as call center support, accounting and property management. In contrast to PE-style roll-ups, the VC firms are starting companies or backing them before their busi