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Rackhouse Venture Capital Closes Second Fund at $45 Million

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Rackhouse Ventures Fund II will continue to accelerate early-stage AI startups focused on product-market fit in overlooked niches

SAN FRANCISCO, June 25, 2024-- Rackhouse Venture Capital (Rackhouse Ventures), a San Francisco-based, early-stage, AI-focused venture capital firm, today announced the final closing of Rackhouse Ventures Fund II, with $45 million in closed capital and commitments. Fund II will facilitate the firm’s commitment to partner with companies and founders that have achieved product-market fit in overlooked niches, possessing a clear and obsessive customer focus.

With this fund, Rackhouse Ventures is focused on pragmatic founders in GenAI, AI Services, and Data-enabled Marketplaces. These founders are equipped with agile technology teams, and employ unique, hard-to-replicate distribution strategies, enabling them to respond nimbly to the evolving AI landscape and solve present-day problems. The closure of Fund II comes on the heels of Rackhouse Ventures opening its first office, located in the South of Market (SoMa) neighborhood of San Francisco.

The Rackhouse Ventures team is composed of seasoned industry experts with operational experience in AI/ML. Founded by Uber’s first Head of Data Science, Kevin Novak, Rackhouse Ventures is paving the way for early-stage startups with winning AI/ML solutions.

Novak said, “As Fund II continues to deploy capital and support its portfolio companies, we are confident in our ability to generate strong returns for our investors and create lasting impact in the AI industry. With the close of Fund II we plan to keep doing what we do best – empowering early-stage startups to change the world with data.”

Fund II investments are primarily split between San Francisco-based companies and those across the rest of the U.S., with new investments outside of the U.S. in progress, showcasing Rackhouse Ventures' ability to identify and capitalize on global opportunities in the AI space.

Fund II builds on Rackhouse Ventures’ reputation earned by the successes of the firm’s Fund I portfolio companies. In 2021, Rackhouse Ventures closed its first round at $22.3 million. According to Cambridge Associates, Fund I ranked in the top 5%, outperforming 95% of similar funds. Fund I included 32 investments and boasted a 69% graduation rate. Notably, four founders from Fund I are participating as LPs in Fund II.

To date, Fund II has completed eight investments, including Onbrand, Insummary, and With its strategic approach, industry expertise, and commitment to supporting visionary founders, Rackhouse Ventures is well-positioned to identify and back the next generation of AI leaders.

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About Rackhouse Venture Capital

Headquartered in San Francisco, Rackhouse Ventures is a global venture capital firm purpose-built to support early-stage founders and firms that sit at the intersection of AI/ML and the real world. Rackhouse Ventures is the best place for early-stage founders with a vision of making the world more efficient. Visit to learn more.

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