Venture capital firm January Ventures is focusing on a largely overlooked segment of the burgeoning artificial intelligence landscape: startups founded by underrepresented entrepreneurs applying AI to traditionally “legacy” industries. The firm, launched in 2023, writes pre-seed checks to founders tackling challenges in healthcare, manufacturing, and supply chain. This strategy aims to address a funding gap identified by January Ventures, where experienced founders in these sectors are being bypassed in favor of those focused on more visible AI infrastructure projects.
The firm’s approach was discussed at TechCrunch Disrupt 2025, where co-founder and General Partner Jennifer Neundorfer spoke with Dominic-Madori Davis about the evolving dynamics of early-stage investing. January Ventures believes that significant opportunities exist in applying AI to improve efficiency and innovation within established industries, but these opportunities require specialized knowledge often held by founders outside the typical Silicon Valley network. The discussion highlighted the importance of diverse networks in identifying and supporting these ventures.
The Funding Gap in Artificial Intelligence
While investment in artificial intelligence has surged, a significant portion has concentrated on companies building the foundational technologies – the chips, cloud infrastructure, and core algorithms. According to PitchBook data, funding for AI infrastructure companies reached $35.4 billion in the first three quarters of 2024, dwarfing investment in AI applications within specific industries. However, January Ventures argues that the most defensible and ultimately impactful AI companies will be those deeply embedded in sectors with complex operational challenges.
Focus on Legacy Industries
Healthcare, manufacturing, and supply chain management are characterized by intricate processes, substantial data sets, and significant regulatory hurdles. Successfully applying AI in these areas requires not only technical expertise but also a nuanced understanding of the industry’s specific needs and constraints. January Ventures believes that founders with prior experience in these fields are uniquely positioned to navigate these complexities.
Additionally, these industries often lack the visibility and hype associated with consumer-facing AI applications. This can make it harder for founders to attract the attention of mainstream venture capital firms, which often prioritize rapid growth and scalability. January Ventures aims to counteract this bias by actively seeking out and supporting founders who are building sustainable, long-term businesses.
The Importance of Diverse Networks
Neundorfer emphasized during the TechCrunch Disrupt discussion that access to capital is often determined by who you know. Traditional venture capital networks tend to be concentrated in specific geographic areas and social circles, potentially excluding qualified founders from underrepresented backgrounds. January Ventures actively cultivates relationships with founders outside these established networks, including those from historically Black colleges and universities (HBCUs) and other minority-serving institutions.
This focus on network building is not merely a matter of social responsibility, but also a strategic advantage. By tapping into a wider pool of talent, January Ventures gains access to unique insights and opportunities that might be missed by firms relying on conventional sourcing methods. This approach aligns with a growing trend in the venture capital industry towards more inclusive investment practices.
Early-Stage Investing in the Age of AI
The rise of generative AI has dramatically altered the landscape of early-stage investing. Previously, demonstrating a viable business model often required significant upfront investment in research and development. However, the availability of pre-trained AI models and low-code/no-code platforms has lowered the barrier to entry, allowing founders to rapidly prototype and iterate on new ideas. This shift has led to an increase in the number of AI startups seeking funding.
However, this increased competition also presents challenges for investors. It is becoming increasingly difficult to differentiate between promising ventures and those that are simply riding the AI hype wave. January Ventures addresses this challenge by focusing on companies with a clear understanding of their target market and a defensible competitive advantage. They prioritize teams that are solving real-world problems with practical machine learning solutions.
Meanwhile, the firm acknowledges the evolving nature of due diligence in the age of AI. Traditional metrics, such as revenue growth and user acquisition, may not be as relevant for early-stage AI startups. Instead, January Ventures places a greater emphasis on factors such as data quality, model accuracy, and the potential for long-term scalability. They also assess the team’s ability to adapt to the rapidly changing AI landscape.
In contrast to firms focused solely on the latest AI breakthroughs, January Ventures is betting on the power of applied artificial intelligence. They believe that the greatest value will be created by companies that can seamlessly integrate AI into existing workflows and processes, driving tangible improvements in efficiency, productivity, and decision-making. This approach requires a deep understanding of the target industry and a commitment to building sustainable, long-term businesses.
The firm’s investment strategy also considers the broader implications of AI adoption, including ethical considerations and potential societal impacts. They prioritize companies that are committed to responsible AI development and deployment, ensuring that their technologies are used in a fair and equitable manner. This commitment reflects a growing awareness within the venture capital community of the need to address the ethical challenges posed by AI.
Looking ahead, January Ventures plans to continue expanding its network and increasing its investment activity. The firm is currently evaluating a new fund to support its growing portfolio of companies. The success of January Ventures will likely depend on its ability to identify and nurture promising founders who are building the next generation of AI-powered solutions for legacy industries. The firm’s continued focus on underrepresented founders and its commitment to responsible AI development will be key factors to watch in the coming years.
