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Vertically Integrated and AI-First | Union Square Ventures

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A new pattern is emerging that we are excited about at USV: entrepreneurs are upgrading physical industries with an AI-first and vertically integrated approach. Instead of selling software to industry incumbents, startups are increasingly deciding to use their technical know-how to compete head-on. We think this approach is especially important for companies in physical industries, and it fits our thesis of investing at the edge of large markets being transformed by technological and societal pressures. The physical industries we look at in our climate fund – from energy to minerals exploration and mining to agriculture and beyond – are massive but dominated by stodgy incumbents. Though there are many different end-customers, the markets often consolidate under just a few producers. These incumbent producers effectively serve as gatekeepers between startups with new technology and the end customers they want to benefit. They tend not to operate at the bleeding edge of what is technolog

Co-authored with Jared Hecht A new pattern is emerging that we are excited about at USV: entrepreneurs are upgrading physical industries with an AI-first and vertically integrated approach. Instead of selling software to industry incumbents, startups are increasingly deciding to use their technical know-how to compete head-on. We think this approach is especially important for companies in physical industries, and it fits our thesis of investing at the edge of large markets being transformed by technological and societal pressures. The physical industries we look at in our climate fund –

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