Capricorn Digital Growth Fund — investment thesis & scope

Original article was published on Artificial Intelligence on Medium

From Big Data to Actionable Insights

CICT, our previous digital tech fund, centered around the concept of Big Data. CDGF builds on this concept but with a shift towards Actionable Insights — internally often referred to as AI 😉 — emphasizing the need for value add.

A sound pitch should always start with a crystal clear understanding of the business problem. Solving the problem & improving business outcomes are driven by actionable insights. This should translate into a top down strategy starting with the objective, drilling down towards the data. This allows for data to turn into information, into knowledge, into insights, and finally into actionable insights that enable better business outcomes.

From Data to Actionable Insights. Adapted from http://www.gapingvoid.com

In a way, this reverses the thinking pattern and avoids wasting data resources without a clear objective in mind. Think about how your data will eventually generate actionable insights to better serve the business. If your company has a clear data strategy in line with our philosophy, you may call yourself a data driven company. If so, you are part of our investment landscape and you should reach out to proposals@capricorn.be right now 🙂

We do have a few sweet spot investment areas, where we proactively reach out to interesting opportunities. Below graph summarizes our investment landscape.

Focus area 1 — Core AI & Deeptech

Our close ties to universities & research centers, give us first hand access to breakthrough technologies developed by the brightest people across the research ecosystem. Working hand in hand with our partners, we help commercially viable products & companies to scale globally. Core AI & Deeptech, often rooted into university research, are two of our main topics when searching for quality deal flow.

Core AI research (e.g. proprietary machine learning, Natural Language Processing, edge computing etc) enable faster & more accurate intelligence resulting in breakthrough applications across a diverse set of industries. We specifically encourage the use of transparent or explicable AI so outcomes are not based on black box algorithms.

Deeptech innovation (e.g. drones, robotics, quantum computing etc) is a core part of our investment landscape, albeit with a focus on connected systems that enable data driven applications. For example: a stand-alone piece of hardware checking a manufacturing line for defects, will only be in scope if connected to a wider network delivering actionable insights to operators.

Focus area 2 — Digital Healthcare

Capricorn is widely recognized as healthcare expert with several examples of successful investments in the field, both digital & non-digital. CDGF leverages its in-house expertise and actively scans the market for interesting digital health companies. Topics of interest include most B2B or B2B2C applications, including ‘Real world evidence’, ‘Patient engagement’, ‘Personalized medicine’, ‘Digital therapeutics’, ‘Active ageing’ & ‘Connected medtech’.

Useful to highlight that we like entrepreneurs with a deep understanding of the targeted healthcare ecosystem. Regarding Artificial Intelligence, we prefer solutions that are very well integrated into existing workflows and not aim to immediately replace the MD. We believe future health will be digital, but powered by the convergence of human & artificial intelligence.

Focus area 3— Industry 4.0

As our fund grew in size, we opened up our scope towards a second vertical: Industry 4.0. We often get the question why we chose this area in particular. Actually, this came pretty natural as we can draw many parallels between healthcare & the wider industrial landscape:

[1] First of all, both verticals have been lagging dramatically when it comes to adapting digital technologies. We believe this will change in the coming decade, with an abundance of opportunities in the near future.

[2] Healthcare & Industry are more risk adverse, as there is little room for failure. Imagine hospitals not being able to operate for several hours or AI applications suggesting wrong actions in the midst of hearth surgery… Or let’s say a company ships faulty products due to issues with AI based quality control resulting in thousands of recalls….

[3] Inherent to previous points, both healthcare & industry have complex ecosystems with slow moving processes. These challenges require strong deep understanding of each ecosystem, enabled through partnerships within the ecosystem and integrations in existing workflows.

[4] Several common fundamental technologies like Machine Learning, IoT, VR… only recently became more cost effective and standardized. Both verticals have waited for technology to be sufficiently proven & tested. Time for action is now.

[5] Just like we don’t immediately see bots replacing MDs in healthcare, we don’t believe in fully replacing human intelligence in industrial applications. Rather, we believe in the concept of cobotization, empowering human operators with artificial intelligence & machines to increase their effectiveness.

Further, I would like to add that we define Industry 4.0 in a very broad sense, as we don’t see the classical waterfall process from sourcing -> sales as separated steps in the process. New business models like servitization, on demand batch-size-one productions… require a connected approach across the full value chain.

Leaving room for serendipity…

As you can see from our investment landscape, we do leave room for serendipity (e.g. insurtech, smart energy, HR tech…). If your venture solves a clear business problem and has a well laid-out data strategy, don’t hesitate to send your proposal to proposals@capricorn.be.