Allied Venture Partners

Hello Partners,

As a current or prospective partner, this newsletter provides exclusive insights into our investment strategy, portfolio companies, and industry trends.

Thank you for your continued trust and support,

Matt Wilson

Founder & Managing Director | Allied Venture Partners

Not an LP? Click here to join the Allied Venture Partners syndicate.

Team Updates

• Our core team includes Steve, Melinda, Brendan, and Colton.

• The Allied Scout and Advisory programs continue to expand with several new members each week, providing quality diversified deal flow from across Canada and the United States. Thank you to all those who have participated.

New Deals

• We launched our latest investment opportunity earlier this month. If you didn’t receive the invitation and would like to learn more, please let me know. The round will be announced in March.

• We have numerous opportunities in our diligence pipeline, and I look forward to sharing more with you in the coming weeks. Stay tuned.

Portfolio News

• Demand for Vint’s QSBS Rollover product is surging after the company’s record-breaking year. If you know any investors, founders, or employees nearing an exit who could benefit from a QSBS Rollover, please let me know, and I’ll connect you with the team. 

• Share recently completed a nationwide pitch tour with Reach Canada. I had a great day with the team in Calgary and am very excited for the year ahead!

• Trace also had a standout year, securing partnerships with ESPN, Dell, and several other high-profile corporate clients. If you know any commercial property developers, construction companies, or experiential marketing agencies looking to create immersive AR scenes and virtual walk-throughs, the team at Trace is truly world-class. 

• Earlier this month, I spent a fantastic few days meeting with investors in London. The weather was cool, but the sausage rolls were outstanding. Thanks again to everyone who met me during my brief trip across the pond.

Industry Insights

In 2024, I reviewed over 1,500 investment opportunities throughout North America, and I expect that number to increase in 2025 as our dealflow funnel continues to expand.

Having seen so many pitches, I’ve noticed key patterns among founders who successfully raise capital and those who struggle, and I recently shared these insights in a blog post to help founders refine their fundraising process.

You can read the full post on LinkedIn, but I wanted to highlight a relevant takeaway for investors. Specifically, question 9:

“How does this company reach $100 million ARR and a $1 billion+ valuation in 7-10 years?”

Translation: is this company venture-scalable?

With AI's proliferation and commoditization, I’m seeing a surge in startups offering AI-powered tools to solve every problem imaginable. I, myself, have had a great time experimenting with building new software tools and apps on evenings and weekends—it’s the most exciting time ever to be an AI consumer, with new capabilities emerging daily.

However, from an investment perspective, the hardest part of my job is differentiating between tools and companies. For instance, I foresee many great businesses being started that can reach high seven- and low eight-figure revenues. But from a venture-scale perspective, it’s far more unclear which will emerge as long-term sustainable companies with the potential to reach $100 million+ ARR.

Considering the broader market, I think about the emergence of agentic AI like the early app store or Chrome extensions – we have thousands of customizable agents/tools at our disposal, but very few with durable moats or economies of scale.

I agree that proprietary data is the primary defensible edge for agentic AI tools, but the picture is much less clear when I consider which tools will still be around in 10 years. As such, I default to our investment thesis anchored on infrastructure-layer software.

For instance, I don’t know how the AI market will ultimately evolve or which tools will become long-lasting, durable companies. But I do know that any platform which democratizes access to large and rapidly expanding markets—enabling a multitude of companies and industries to build on top of it—will become an indispensable foundational layer of our business landscape.

Some examples that I’m looking at include:

• Developer tooling that simplifies AI implementation

• Data infrastructure that powers model training and deployment

• Enterprise-grade security and compliance solutions for AI systems

• Middleware that connects AI capabilities to existing business processes

By focusing on companies that enable and accelerate AI adoption across industries, I believe these infrastructure layers will capture disproportionate value as the AI ecosystem matures, similar to how AWS, Stripe, and Twilio became foundational platforms during the cloud and mobile revolutions.

Looking ahead to 2025, I expect to see increased consolidation in the application layer as larger platforms begin acquiring point solutions. This will likely create additional opportunities in the infrastructure space as the market demands more sophisticated tooling to support enterprise-scale AI deployments.

In the meantime, while the AI landscape evolves, our disciplined investment focus remains unchanged: identifying foundational infrastructure plays with the potential to generate venture-scale returns for our investors.

Thank you again for your support.

As a reminder, our Core Investment Values since Day 1:

Read our investment thesis one-pager, available here.

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