Cathay Innovation Closes $1B VC Fund — A Different Kind of Fund Built to Bring Vertical AI to Industry
Over the last several years, we’ve often shared our views on what the AI era demands: a new kind of venture capital — rooted in deep industry connectivity, collaboration and long-term impact.
Today, we’re excited to share the next step in that journey: the final close of Cathay Innovation Fund III at $1B, making it the largest AI-dedicated VC fund coming out of the European Union — with a global investment scope and platform built to bring AI into industry at scale.
In the last tech cycle, Google transformed advertising through software. Now, AI is set to transform every industry from the inside out. The next wave is already taking shape at the ground level: in hospitals, energy systems, financial institutions and supply chains. That’s vertical AI. Sector-specific solutions tailored to the complex realities of major industries. This is where Fund III operates. Not because vertical AI is the latest trend, but because this is where the greatest societal and economic impact will be felt.
This is more than a fund close. It marks a strategic turning point for how we invest, partner and build in this new era.
The Backstory.
At Cathay Innovation, we’ve long been active believers in AI. We’ve backed pioneers like AI biotech Owkin or Momenta, building “the brain” of autonomous vehicles, since our first Fund in 2015. But when OpenAI kicked off the LLM craze with ChatGPT, something clicked. Not because we were surprised by the tech — but because we recognized it as a moment. A shift. The acceleration point where AI would begin transforming every layer of society and industry.
The question for us became: how do we, as a venture capital platform — global in scope, backed by industry leading corporations — reorient our capabilities to meet this moment?
The answer: focus our model not just on investing in AI, but on scaling it into the sectors that power the real economy and society in a way that helps all stakeholders move forward. That means entrepreneurs. But it also means sovereign entities, corporate leaders and industrial partners. And it means doing more than writing checks.
We don’t just back the dream — we help build the solution.
The Platform.
Cathay Innovation was founded in Paris in 2015 — as the venture capital arm of Cathay Capital, making it a venture capital + private equity platform that can support companies at all stages. We’ve spent the last decade building out the VC platform with two powerful ecosystems:
1. A global presence, with local expertise from offices in Paris, Berlin, Madrid, San Francisco, Shanghai, Singapore, Mexico City and Tunisia (through our partnership with AfricInvest)
2. A broad network of 20+ strategic corporate partner LPs who are not just investors, but Fortune500 transformation partners.
Together, this gives us the reach to support founders on five continents and the industrial access to scale real-world solutions faster and with greater staying power.
Rather than operate in isolation, our startups are able to collaborate with industry from day one, running pilots, co-developing products and opening real-world market access. This isn’t soft intros. Collaboration is built into the model.
We’re proud to have built what is now the largest VC platform in the world for startup-industry collaboration, both investing in startups and connecting founders and corporate innovation teams under one roof.
Think of us as a bridge — connecting startups to industry, turning ideas into reality through tangible partnerships on a global scale.
Why It Matters.
Venture capital is changing. The traditional model — fast capital, short cycles, and quick exits — wasn’t built for today’s AI-driven, industry-focused world. AI requires time, trust, data, and integration — especially in complex sectors like healthcare, energy and finance. The winners won’t just move fast, they’ll go deep and build with industry and people in mind.
VC is responding. Some of the most recognized names in Silicon Valley have begun to shift away from the traditional venture capital model. These firms are going beyond capital — they’re building platforms that offer longer-term support, infrastructure, operating leverage, AI capabilities and more. It may feel like a revolution, but at Cathay Innovation, it’s how we’ve operated from the beginning.
This model has global relevance, but it’s especially well-suited for Europe. Unlike the US, Europe lacks deep capital markets, is more fragmented, regulated and leans heavily on corporate-driven innovation. That’s why we’ve built a system that pairs financial capital with industrial partnerships — helping startups validate, scale, and embed AI across Europe’s complex, localized markets and beyond.
And in today’s fractured world, we double down on connectivity — giving entrepreneurs access to the world’s most advanced innovation ecosystems, from Silicon Valley to Paris and Berlin to Shanghai and beyond. In this environment, connection is a strategic advantage.
Fund III.
Fund III is purpose-built for AI adoption and industry transformation.
That meant building a fund with the scale to matter — $1 billion — and structuring it around our global, corporate-backed model with strong ties in 4 specific sectors: healthcare (Sanofi), financial services (BNP Paribas Cardif), consumer (Groupe SEB & Pernod Ricard) and energy / mobility (TotalEnergies, Valeo, ADP etc.)
We primarily focus on vertical AI — real applications solving real problems.
For example:
● In healthcare, we have companies like Nabla developing an AI co-pilot for physicians to reduce administrative burden and burnout. There’s also AQEMIA, combining AI with quantum-inspired physics to accelerate successful drug discovery, predicting the efficacy of potential new drugs. Of note, they’ve already minted a strategic partnership with Cathay Innovation strategic partner and global biophama Sanofi.
● In financial services, Range built an AI-enabled wealth management platform granting American mass affluent individuals and families access to personalized financial guidance for the first time.
● In the consumer sector, Beatbot is an Intelligent robotic systems tackling the future of smart cleaning and maintenance.
They’re not alone. Out of Fund III, we’ve invested in 14 startups across Europe, the US and Asia and it’s just the start. These companies are taking on some of industries’ biggest challenges — from helping retailers solve the surplus inventory apocalypse to decarbonizing industrial chemistry with AI. Meet the Fund III portfolio (so far) below.
● DIGITAL HEALTH: Nabla, AQEMIA, Bioptimus, Nelly
● FINTECH: Range, Flowdesk, Ping++
● CONSUMER: Ghost, Reebelo, Imagino, Mogic, Beatbot
● ENERGY: David Energy, Entalpic
Parting Thoughts.
AI isn’t replacing industries — it’s reshaping them. And in a world where no single actor — startup or incumbent — can go it alone, we believe the most meaningful progress will come through collaboration between founders and industry leaders.
We call this collaborative transformation.
With the close of Fund III, it didn’t feel like fundraising. It was a series of discussions with industry leaders, sovereign entities and institutions that believe in a new way forward. More than a fund, we see it as strategic projects to help solve some of the biggest challenges, invest in the future and bring value to all stakeholders.
We’re already seeing early momentum: from revenue growth to expanded corporate partnerships, the thesis is being validated. This model was built for hard problems. For founders ready to scale. For ecosystems ready to evolve.
Ultimately, our goal is to help bring vertical AI solutions to market that generate long-term economic and societal impact. If you’re building, partnering, or simply thinking about what the next decade of AI looks like — we’re here to help shape it.
One thing we’re certain of : collaboration is the new currency of success.
