VC AI Survey
“I believe Israel is on track to become a global center of excellence in AI”
Adi Gozes, Managing Partner at AnD Ventures, joined CTech to discuss AI investment trends as part of its VC AI Survey series.
“I believe every sector will ultimately be transformed by AI,” said Adi Gozes, Managing Partner at AnD Ventures. “Interestingly, the profession that has been impacted the most so far is software development. It has already undergone a dramatic change in recent years, and that transformation is far from over.”
Gozes joined CTech for its VC AI Survey to share insights on AI and how it is impacting the investment space. Notably, trying to identify which companies will be impacted the most in this new era.
“AI infrastructure companies in Israel have strong exit potential, and the acquisitions of Run:ai and Deci by NVIDIA are hopefully just the beginning,” she added. “I believe Israel is on track to become a global center of excellence in AI.”
You can read more below.
Fund ID
Name and Title: Adi Gozes, Managing Partner
Fund Name: AnD Ventures
Founding Team: Lee Moser and Roy Geva Glasberg
Founding Year: 2020
Investment Stage: Pre-seed and Seed
Investment Sectors: AI, Fintech, Cyber, Gaming
On a scale of 1 to 10, how has AI impacted your fund’s operations over the past year - specifically in terms of the day-to-day work of the fund's partners and team members?
8 - We use AI quite heavily for back-office efficiency: drafting investment memos, LP updates, and portfolio analyses have become much faster.
Have you already had any significant exits from AI companies? If so, what were the key characteristics of those companies?
Not yet.
Is identifying promising AI startups different from evaluating companies in your more traditional investment domains? If so, how does that difference manifest?
With models and tools widely accessible, the real question is what still counts as a competitive edge? Some things that we consider are unique and proprietary data, deep integration into customer workflows, feedback loops that compound over time and strong community or distribution channels.
Perhaps the most important thing in this fast-paced environment is the ability to execute relentlessly and adapt quickly. AI is transforming how startups are built, but it hasn’t changed the need for focus, customer obsession, and long-term thinking.
The fundamentals remain the same.
What specific financial performance indicators (KPIs) do you examine when assessing a potential AI company? Are there any AI-specific metrics you consider particularly important?
We track the standard SaaS metrics, but we also expect to see much greater team efficiency, as AI enables each team member to accomplish significantly more.
Today, even at the earliest stages, a small team can build and launch an excellent product (Base44 is a great example).
How do you approach the valuation of early-stage AI startups, which often lack significant revenues but possess strong technological potential?
It depends on which type of AI startup. For AI-based applications, we actually expect to see significant revenues pretty early on and even earlier than we would have seen before, since now it's much easier and quicker to deliver a product.
For AI infrastructure startups, like any infrastructure company, it indeed takes a longer time to monetize, and that timeline (and its associated risk) needs to be factored in.
What financial risks do you associate with investing in AI companies, beyond the usual technological risks?
Competition is much fiercer, and the moat for AI companies is a constant question.
On the financial side, gross margins for AI companies can be lower than traditional SaaS margins, especially for those heavily reliant on AI engines. However, as inference costs continue to decline over time, margins are likely to improve.
Do you focus on particular subdomains within AI?
We invest in both AI-based applications and the infrastructure that powers them.
Another emerging area we find particularly compelling is startups addressing new challenges created by the widespread adoption of AI. One example is Generative Engine Optimization (GEO): as consumer behavior shifts from traditional search to AI chat interfaces, the old playbook for SEO no longer suffices.
As AI adoption accelerates, we expect to see many more such emerging categories, each creating new opportunities for founders.
How do you view AI’s impact on traditional industries? Are there specific AI technologies you believe will be especially transformative in certain sectors?
I believe every sector will ultimately be transformed by AI.
Interestingly, the profession that has been impacted the most so far is software development. It has already undergone a dramatic change in recent years, and that transformation is far from over.
What specific AI trends in Israel do you see as having strong exit potential in the next five years? Are there niches where you believe Israeli startups particularly excel?
AI infrastructure companies in Israel have strong exit potential, and the acquisitions of Run:ai and Deci by NVIDIA are hopefully just the beginning. I believe Israel is on track to become a global center of excellence in AI.
While AI-based applications also show strong potential, Israel’s edge in that area is less defined.
Are there gaps or missing segments in the Israeli AI landscape that you’ve identified? What types of AI founders are you especially looking to back right now in Israel?
At the rapid pace of innovation, it's hard to predict what tomorrow will bring.
Since we invest very early (pre-seed and seed), the team is the single most important factor for us. We look for exceptional founders that have grit, charisma and and the ability to move fast and adapt as markets evolve.
