Betaworks Raises $66M for Its Third Fund to Invest in Early-Stage AI Startups

Betaworks, located in New York City, has successfully finalized its $66 million Fund III, which focuses on investing in early-stage AI startups.

Since 2016, Betaworks has been actively investing in AI, backing companies such as Huggingface and Granola through its investment initiative, Camp. Jordan Crook, a partner at Betaworks and former TechCrunch employee, indicated that the new fund will focus on agents, native AI interfaces, and application-layer AI.

“We will keep pursuing straightforward seed investments along these themes and through the Betaworks Camps,” Crook stated.

Fund III is set to make at least 25 pre-seed to seed investments, along with a minimum of 50 investments in startups via the Betaworks Camps program. “To date, we’ve executed around 37 deals,” Crook mentioned, with an average check size of roughly $500,000.

Crook characterized the current fundraising environment as “frothy” for startups and “spiky” for funds, but highlighted that Fund III attracted many previous limited partners back for investment.

“The venture fundraising landscape was challenging in 2024, and we encountered obstacles, particularly because we were upsizing our fund,” she clarified.

Previously, Betaworks raised a $46 million Fund II in 2020 and a $48 million Fund I in 2016. Established in 2008 as a venture studio, it has evolved into a key player in the New York City tech scene, launching the Betaworks Camps program in 2016. Other noteworthy investments include Tumblr and Kickstarter.