Visa considers itself a pioneer in AI usage in payments. Reports suggest that the company sees the funding initiative as a chance to maintain its leadership in using AI.
Payment giant Visa has launched a $100 million funding initiative for generative AI startups building products that will determine the future of commerce and payments. Visa’s corporate investment arm, Visa Ventures, will manage the funds.
Before this, startups involved in knowledge management, AI assistants, task execution, and content creation were the most popular. They also had the most funding, with an estimated $2.7 billion in equity funding since Q3’22. However, Visa sees enormous potential for generative AI in payments also.
According to Jack Forestell, chief product and strategy officer at Visa Inc., “(this product) will also meaningfully change commerce in ways we need to understand.”
Similarly, Head of Visa Ventures, David Rolf, said:
“We are excited to expand our focus to invest in some of the most innovative and disruptive venture-backed startups building across generative AI, commerce and payments.”
Already, Visa considers itself a pioneer in AI usage in payments. Thus, reports suggest that the company sees the funding initiative as a chance to maintain its leadership in using AI.
What Startups Can Expect
Mr. Rolf noted there will be a degree of flexibility with the funds. This flexibility will influence the average cheque size and the number of investments the finding initiative will support.
Consequently, he expects the firm to make small investments of a few million dollars for each chosen startup. This, he explained, is because the industry is still in its early stages. According to CB Insights, 78% of generative AI startups are early-stage and haven’t received any equity funding.
However, he also noted the firm will be able to invest bigger sums “where there is a strong rationale to do so”.
Investments in Generative AI Startups Hit Record High
Meanwhile, 2023 is already a record year for investment in generative AI startups. By the end of Q2’23, over 86 deals had been sealed with more than $14.1B in equity funding.
According to CB Insights, ChatGPT developer OpenAI tops the list of AI startups bringing in equity with a $10B corporate minority round. OpenAI is closely followed by Inflection, Anthropic, and Adept who raised equity worth $1.3B, $850M, and $350M, respectively. Cohere also completed a Series C worth $270 million.