Chaddha From Mayfield Fund On The Cognitive Economy

Editor’s note: This article is part of an ongoing series in which Crunchbase News interviews active investors in artificial intelligence. Read previous interviews with Felicis, Battery Ventures, General Catalyst, Bessemer Venture Partners, Accel, Insight Partners, Index Ventures, Sequoia Capital, Section 32, M12, Sapphire Ventures and Bain Capital Ventures as well as highlights from these stories from 2023.

Software developers have long touted the ability to automate dull, repetitive work. Now, they’re increasingly coming for more complex tasks.

Mayfield Fund 1 is among the firms vested in this trend, investing in the rise of the cognitive workforce through AI-enabled tools for knowledge workers.

Cognition as a Service (CaaS) is “going to transform productivity. It’s going to allow humans to do new things,” said Navin Chaddha, a managing partner at Mayfield.

Navin Chaddha, managing partner at Mayfield Fund.

To that end, Chaddha led the firm’s investment this spring in NeuBird, a service for IT operations that adds an AI-enabled “teammate” called Hawkeye. Hawkeye analyzes issues with the software stack based on prompts from engineers, chats with the team, and provides solutions.

“Each one of us will have a genie. They’ll have a teammate, and we’ll be doing things together,” said Chaddha. “So that’s the era we are entering. Where technology is not a tool, it’s actually our teammate.”

He predicts that Slack will be active with many teammates.

People first

Chaddha most recently held the fourth spot on Forbes’ 2024 The Midas List, moving up one slot from 2023. He led early investments in Lyft, Poshmark and HashiCorp, which went public. He was also an early investor in Nuvia, co-founded by Apple engineers to build chips for phones and mobile devices, which sold to Qualcomm for $1.4 billion in 2021.

Chaddha invests in people first, market second. And his forte is early-stage funding backing an idea.

While Mayfield and Chaddha are enthused about AI-enabled productivity enhancement applications, it’s just one area of the AI “stack” in which the firm is investing.

The 55-year old Mayfield Fund has ample funds to invest. It announced three funds in 2023 after ChatGPT launched: Fund 17 at $580 million to invest at Series A; an AI seed start fund of $250 million; and a select fund of $375 million for Series B opportunities.

The stack

Investors are approaching the AI sector as a layered stack — the semiconductor layer within the cloud, the generative AI model developers, the tooling companies to manage data and models and the applications on the top utilizing the stack.

In each layer of the stack, investors see opportunities in companies that could take off.

Mayfield has invested in Frore Systems, which develops the cooling chips that are in edge AI devices. In model safety it has invested in Securiti. In the data layer its portfolio company Revifi is a copilot for data engineers. In the middleware layer are MindsDB for developers to use any model and datasource to build an application, and Sema4.ai, a platform for developing, running and managing agents.

On the application layer, it has made investments in contract reviewing platform LexCheck, Outreach for sales and customer engagement, and Qventus for hospital care operations.

AI teammates are the top layer in the stack, including NeuBird, and investments the firm has made that are yet to be announced.

Entrepreneur to investor

Chaddha grew up in India and went to Stanford University, where he earned a master’s in electrical engineering. He became an entrepreneur as the internet emerged, co-founding four companies. His first company, VXtreme, enabled delivery of video over the internet. It was acquired by Microsoft in 1997. Chaddha ran Windows Media and was a peer of Microsoft’s CEO Satya Nadella.

An investor since 2004, he witnessed the social, mobile and cloud computing waves that engineered new companies. And then he perceived a lull before this generative AI moment.

The biggest impact of AI that he has seen so far is in customer support, product development, and search and discovery.

“It’s going to elevate humans to become super humans, because the boring, repetitive tasks will be done by machines, augmenting our capabilities and amplifying our creativity,” said Chaddha.

Outside of the big models and the GPU, CPU stack, the opportunities to invest are wide open, he said.