1Mby1M Virtual Accelerator AI Investor Forum: Lisa Chai, General Partner at Interwoven Ventures (Part 4)

Sramana Mitra: Let’s do some use cases. Tell us about some companies that you’ve invested in Vertical AI. Let’s understand a bit more about those.

Lisa Chai: Yes, definitely. I think it’s important to know that we don’t say we need manufacturing companies, so let us look at manufacturing. We meet founders from all the world all the time, and we see a use case, and there’s a light switch that goes off.

Sramana Mitra: It’s important. So more than your domain knowledge, it’s more important for the founder’s domain knowledge in that Vertical AI, whichever domain that you are looking at to be there. That from founder’s domain is the defensible advantage domain knowledge.

Lisa Chai: Yes. Most recently, we invested in a company called Chef Robotics. I don’t know if you’ve ever heard of them. They’re in California, in San Francisco. The company is in a rapid growth stage, helping food manufacturers in the prepared meal industry.

The robots know how to handle over 2000 ingredients using their AI-powered software. So far, it has done a just a great job of preparing over 50 million meals since inception.

Sramana Mitra: That’s really cool.

Lisa Chai: Yeah. This is more than any food robotic company out there that we know of. The secret sauce is not their robot; they just buy an off-the shelf robot. Their secret sauce is their software and their real-world production training data that they already have. Because of that, they are now a leader in the food space.

Chef has customers in the US and Canada. They have plans to expand worldwide with the UK market will be the first one out of North America that they’re going to roll out this year.

What is important is that these robots in the food space have traditionally been designed to automate the workflow of lower mixed production lines for the mass production of one item.

Sramana Mitra: What stage did they come to you? What was their proof point and what stage did you get involved?

Lisa Chai: This is a very interesting story because this is a seed sage company that had some traction. The founder already had three customers, but at the time, maybe they had produced about a couple of hundred thousand meals using their robotic system. They had perhaps one paying commercial customer and the others were pilot customers.

Sramana Mitra: Pilot Customers. That works.

Lisa Chai: What attracted us was their business model. They’re using a RAs model where they’re leasing out their robotic solution on a monthly subscription model. That was something that the food industry desperately needed. Their ROI was immediate – six to nine months type of ROI. Food companies were looking at labor shortage as a comparison as to the turnover. Retaining the staff was the biggest headache that the industry was going through.

So, when you are coming up with a business model of a RAS solution, it really clicked. RAS doesn’t work with every vertical, but in the food space, it really worked. We also saw that this is a great example of a physical AI company where AI is really interacting with that physical environment.

So, they had a small traction, came to us, we did a lot of due diligence – looking at the company, looking at getting a demo, went to their headquarters and spoke to a customer, spoke to some of their lead investors and their board members, and it just all came together. Since then, we’ve been a very happy investor. They just raised a Series A round that was very successfully oversubscribed, and we also participated. We plan to continue to participate probably up until series C or D. Even though we are an early-stage investor, we are going to continue to support as much as we can as long as they’re meeting the milestones. So far, Chef has really exceeded all the milestones, including ours and I think even theirs.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator AI Investor Forum: Lisa Chai, General Partner at Interwoven Ventures
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