Sam Altman’s brother, Jack Altman, has established a new $275 million fund under the San Francisco-based Alt Capital to invest in artificial intelligence (AI) startups. Named Alt Capital II, this fund nearly doubles the size of the company’s previous $150 million fund, which closed in February 2024.
The new fund will focus primarily on Series A startups that are working to rebuild existing corporate software using AI. Jack Altman stated that he plans to lead more Series A rounds with this fund, as he considers this stage the most valuable.
Alt Capital aims to include roughly 20 startups in its portfolio. The fund raised investment commitments within a week and completed the entire process in just one month. Investors in Alt Capital II include the University of Michigan, TrueBridge Capital Partners, and various other organizations.
Michael Kim, founder of Cendana Capital and one of the fund’s limited partners, praised Jack Altman: “Jack is a founder-friendly investor. Many entrepreneurs want to work with him; he is both an experienced leader and has a strong network.”
Altman emphasized that he is undeterred by rising valuations in the AI sector: “These days, I’m investing at valuations of several hundred million dollars. We have even invested at valuations exceeding 100 times annual revenue. If AI turns out to be as transformative as the Internet or the cloud, these valuations will seem quite reasonable in the future.”
Some startups funded by Alt Capital’s previous fund have already achieved high valuations in a short period. For example, Owner.com, a restaurant software provider, grew from a $200 million to a $1 billion valuation. Legal AI solutions provider Legora reached a $675 million valuation just one year after its Series A round.
However, Alt Capital’s portfolio has not yet had any exits. Jack Altman sees competition as the biggest risk moving forward: “In many markets, there are 5, 8, or even 20 companies that are very similar. Historically, usually one emerges as the leader and one as second; the others fall behind.”
