What is 'kingmaking' in venture capital funding?

Kingmaking is a VC strategy where massive funding is deployed into one startup in a competitive category to overwhelm rivals and create market dominance.

How did DualEntry's recent funding round compare to competitors?

DualEntry raised $90 million in its Series A, while competitors Rillet and Campfire AI also recently secured substantial funding rounds like Series B and A.

Why are VCs investing so early in AI ERP startups like DualEntry?

VCs are investing early to capitalize on the perceived power law of venture capital, aiming to capture immense returns by backing potential category winners before competitors mature.

Home / Business and Economy / VCs Bet Big on AI ERP: Is This Kingmaking?

VCs Bet Big on AI ERP: Is This Kingmaking?

4 Dec

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Summary

DualEntry secured $90 million Series A, valuing it at $415 million.
VCs employ 'kingmaking' by backing one startup early to dominate.
Rival AI ERP startups also raised significant capital recently.

VCs Bet Big on AI ERP: Is This Kingmaking?

AI enterprise resource planning (ERP) startup DualEntry recently secured a $90 million Series A funding round, achieving a $415 million valuation. This significant investment, led by Lightspeed and Khosla Ventures, signals a broader trend where venture capitalists are employing a 'kingmaking' strategy. This approach involves concentrating substantial capital into a single startup early in its lifecycle, aiming to overwhelm competitors and create an appearance of market dominance.

This aggressive early-stage funding contrasts with previous investment cycles, where such strategies were typically reserved for later funding rounds. Competitors in the AI ERP space, such as Rillet and Campfire AI, have also recently closed substantial funding rounds, indicating a competitive race for market share fueled by significant VC backing. This pattern is also observed in other AI application categories like IT service management and SOC compliance.