New York-based venture capital firm Factorial Capital has successfully closed its second fund, raising $25 million to continue backing early-stage AI ventures.
The firm, founded in 2023 by Matt Hartman, maintains its focus on supporting technical founders who code, investing at the angel, pre-seed, and seed stages in companies exploring cutting-edge technologies.
Investing at the Frontier of AI and Emerging Tech
Factorial Capital’s strategy revolves around founders working at the intersection of AI infrastructure, B2B productivity, consumer AI, and other emerging technology spaces.
With Fund II, the firm plans to expand its distributed sourcing model, partnering with additional technical founders while staying committed to spotting early-stage teams building “what’s newly possible” in technology.
Building on a Proven Track Record
Fund II follows the success of Factorial’s $10 million Fund I, which included ten companies that have already seen valuations rise at least five times over the firm’s initial entry price.
Notably, Modal, one of the Fund I portfolio companies, recently crossed the $1 billion valuation mark.
Other standout investments include Factory AI, Pika, Causal Labs, and White Circle, among others.
Partnering With Industry Leaders
Factorial Capital differentiates itself by collaborating closely with a curated network of technical founders, including prominent names from Venmo, Giphy, and Hugging Face.
These partners identify high-potential startups within their networks, and the firm’s 20% carry structure splits evenly—10% to Factorial GP and 10% to the sourcing partner responsible for driving profits.
Matt Hartman’s Background and Vision
Founder Matt Hartman brings nearly a decade of experience from Betaworks, where he was one of the earliest investors in companies like Hugging Face and Anchor (acquired by Spotify).
Hartman’s expertise in spotting technical talent and investing in frontier technology has shaped Factorial Capital’s thesis of backing founders who can code and push the limits of what technology can achieve.
Looking Ahead
With Fund II now closed, Factorial Capital is poised to continue identifying and nurturing early-stage AI and tech companies, leveraging both its proven track record and its unique distributed sourcing approach.
The firm aims to remain at the forefront of the rapidly evolving AI landscape, supporting the next generation of technical innovators.
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