A technology-focused venture capital firm is using artificial intelligence (AI) to look for new European investment opportunities and find the next tech unicorn.
Andreas Thorstensson is tech partner and investment adviser at EQT Ventures, which went live in 2016 and is part of global private equity group EQT.
The Swedish developer, gamer, entrepreneur and former chief technology officer of peer-to-peer lending company Toborrow joined the team with the aim of disrupting the traditional venture capital industry using software.
He has since helped to build and configure a ‘signal intelligence’ AI platform called Motherbrain, developed with the very specific job of proactively looking for tech companies that he calls ‘diamonds in the rough’.
In simple terms, the software collects data from at least 20 online sources and analyses up to 50 metrics to find companies that could be the next big thing before anyone else notices.
“There are many tech companies that don’t really get the attention of VCs because they don’t know the right people or they’re not attending the right conferences, or maybe they’re based in small towns and can’t get access to them,” Thorstensson said.
“We created Motherbrain to adopt a pure data-driven approach of sifting through the noise.”
EQT Ventures has been using Motherbrain internally for almost two years, with the platform now responsible for up to 30 per cent of the fund’s deal flow.
Thanks to the software, the firm has already backed two tech companies which Thorstensson says would have otherwise likely remained under the radar. Motherbrain is also now being used across EQT’s broader platform.
Although unlikely to ever replace the traditional model or make actual investment decisions, Thorstensson says there’s a clear trend that more and more VCs are realising the benefit of investing in AI platforms and data-driven systems to assist with discovery.
“If you look at the kind of companies we’re interested in, 1,600 of those are created on a daily basis and about 150 of them get funding,” he said.
“In the near future, every single VC is going to have a much more data-driven approach when it comes to deal sourcing – that’s going to be key going forward.”