Blackbird invested more than $200 million in Californian startup Baseten’s Series F, backing the Australian-founded AI infrastructure startup’s plan to drastically reduce the cost of AI deployment.
Key Takeaways
- Blackbird has invested over $200 million in Baseten, its biggest ever single investment.
- Baseten is a Californian startup with two Australians among its four founders.
- The startup creates infrastructure that it says saves businesses money on AI compute and lets them retain data produced by customers using their software.
- Baseten raised US$1.5 billion in its Series F, valuing it at US$13 billion. Blackbird also invested in its Series E earlier this year.
Blackbird has invested over $200 million in Californian AI startup Baseten’s Series F, a US$1.5 billion round ($2.15 billion) that values the company at US$13 billion ($18.5 billion), in what the Sydney VC says is its biggest ever single investment.
Baseten counts two Australians among its four founders, which Blackbird says fulfils its mandate to support Australian and New Zealand entrepreneurs – wherever their companies may be domiciled.
“Today the best companies need to be global from very early on, so the fact that it’s in California with Australian founders doesn’t change the logic too much,” Blackbird investor Tristan Edwards told Forbes Australia, noting that around 80 per cent of Baseten’s research team is Australian too.
The investment follows Blackbird participating in Baseten’s February Series E. The startup says it reduces the costs of enterprise AI through boosting the efficiency of inferencing – that is, accessing AI models hosted in data centres – and helping companies train open-source models for their specific operations rather than relying on more costly AI made by Big Tech.
Its pitch is well timed, considering the concerns spreading in some quarters around the rising cost of cutting-edge models developed by Anthropic and ChatGPT. Uber burned through a year’s worth of compute budget in four months in the most high profile example of the rising cost of tokens causing a rethink in how AI is applied. Baseten’s customers include Cursor, Notion and Australia’s Heidi Health.
Baseten’s revenue is up around 2,000 per cent in the past year, according to Blackbird. Net dollar retention, a SaaS metric that measures how much a company forecasts it’ll earn from existing customers, beat annual estimates in just a quarter.
“If they had met their milestones, we would have loved the company,” Edwards said of Blackbird’s decision to make its largest investment yet. “The fact that they beat them by three quarters is just incredible.”
Blackbird’s big bet earned it participating investor status in the round, which was led by Spark Capital (US$15 billion in assets under management), Altimeter Capital (US$6.75 billion) and early-stage VC Conviction.
“For the first time, Blackbird has invested >$200 million in a single round,” Blackbird partner and co-founder Niki Scevak wrote in an X post. “For the greats of the AI application layer, open source models have turned negative gross margins into positive ones and offer a longer-term pathway into outcompeting Anthropic/OpenAI.”
Though Baseten is very much a Californian startup, two of its four co-founders are Australian. Chief executive Tuhin Srivastava moved to the US after high school to study finance, and is an alumnus of Macquarie after an investment banking stint at the Millionaire Factory’s New York office. Meanwhile chief scientist Phillip Howes got a PhD from the University of Sydney before moving to San Francisco in 2013.
The pair previously co-founded Shape, a data analytics startup that was acquired by Reflektive in 2018 and which Blackbird also backed. Srivastava remains connected to Sydney’s startup scene in his capacity as Venture Partner at Athletic Ventures.
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