Cathay Innovation, a Paris-based venture capital firm affiliated with Cathay Capital, announced on May 28 the final closing of its third fund: Fund III, amounting to $1 billion. This investment vehicle aims to support the sustainable transformation of critical sectors such as healthcare, energy, finance, and consumer industries through so-called "vertical" AI, designed for specific uses in each industry.
This announcement comes at a particularly complex time for venture capital, marked by a global decline in fundraising, cautious revaluation of tech assets, and increasing attention to sustainable economic models.
Connecting Emerging Start-ups to Real-World Industries
According to Denis Barrier, co-founder of Cathay Innovation, "Fund III represents a new type of venture capital fund built for the AI era, with the capital and ecosystem necessary for a true industrial and societal shift."
The claimed approach is decidedly partnership-oriented. The funded start-ups are not merely selected for their technological potential but are integrated into a co-development framework with large companies. Launched in July 2022, the fund is supported by multinationals such as Sanofi, TotalEnergies, Valeo, BNP Paribas Cardif, Groupe SEB, and Groupe ADP, all from the targeted sectors.
Classified as Article 8 under the European SFDR (Sustainable Finance Disclosure Regulation), it prioritizes innovations with a positive environmental and social impact.
14 Start-ups Already Supported
According to the management company, "Fund III is the largest venture capital fund dedicated to AI in the European Union investing globally in vertical AI."
Targeting companies in Series A, B, or advanced growth stages, Fund III commits amounts ranging from $5 to $100 million per operation. It acts as a lead or co-investor while retaining the capacity for reinvestment to support startups over the long term.
To date, it has invested in 14 start-ups in Europe, the United States, and Asia. Among the supported French companies are:
- Nabla, which develops an AI assistant for healthcare professionals, aiming to improve the quality of care and consultation efficiency;
- AQEMIA, specializing in drug discovery, combines artificial intelligence and quantum physics to accelerate pharmaceutical research;
- Bioptimus, working on creating a universal foundation model for biology, with the aim of transforming biomedical research through AI;
- Entalpic: focused on the discovery of innovative low-carbon materials, leveraging advanced AI models.