Evan Nisselson is the founder and general partner of LDV Capital.
Evan Nisselson is used to being years ahead of trends. In 2003, the serial entrepreneur and veteran photographer penned a piece predicting a near future when camera phones would replace point-and-shoot cameras. The Nokia 1100, a bare-bones brickett, was the most popular phone at the time, and as Nisselson recalls, he was nearly laughed out of the tech industry. So when the former founder of digital imagery marketplace Digital Railroad launched a venture fund in 2012 with a focus on deep tech companies looking to utilize AI and machine learning to process visual images, the blank stares he received came as no surprise.
“I started LDV Capital with that thesis and people thought it was cute and niche and science fiction almost,” Nisselson tells Forbes. “Nine years later, it's become quite a foundation for all businesses, and it's actually a horizontal thesis across all sectors.” Indeed, computer vision, a subset of the booming AI market and used in everything from unlocking your iPhone and improving your shopping experience to diagnosing cancer, is expected to reach $14 billion in spending by 2024, up from $10 billion in 2019, according to ResearchandMarkets.com.“For AI to succeed, it's going to have to successfully analyze visual data,” Nisselson says.
LDV, which invests in pre-seed and seed-stage companies in North America and Europe, prioritizes companies using AI or machine learning to improve visual technology. This broad thesis allows the New York City-based firm to invest across sectors and in companies that include Sea Machines Robotics, which makes autonomous navigation systems for the maritime industry, and Synthesia, which uses AI to create videos off of text messages. The firm has seen a number of exits from its first two funds over the last year, including Swedish mapping startup Mapillary, which Facebook acquired in June 2020, and copyright-free photography startup Unsplash, which was purchased by Getty Images in March 2021, both for undisclosed amounts.
Now, LDV is announcing the close of its third fund, as originally reported in the Midas Touch newsletter. With $21 million for LDV Capital III, the fund is short of its original $30 million target, but still more than double the firm’s second fund, which closed on $10 million in 2018. Capital came from a wide swath of limited partners, from international fund-of-funds to angel investors. It’s looking to invest $350,000 to $1.2 million in initial checks and no company is too early for the firm, which frequently writes term sheets before the startup idea is fully incorporated, Nisselson says. The firm pulls on a network of expert sources to help them diligence deals like Andrew Rabinovich, the former head of AI at Magic Leap, and Serge Belongie, the associate dean of computer vision at Cornell University.
All of LDV’s portfolio companies that have sought out follow-on funding have raised it successfully, Nisselson says. And these days, VCs pull LDV into deals, he claims, while LPs look to co-invest directly in its portfolio. Moving forward, Nisselson predicts the “Internet of Eyes” —the use of AI to identify and process visual data at previously impossible speeds—will outgrow the “Internet of Things” and LDV hopes to take advantage of that trend. The firm also promoted Abby Hunter-Syed to partner at the end of 2020. She joined the firm in 2017 and previously held roles as the director of operations and vice president. “We’ve validated our thesis and we are just going to double down,” he says.
