The European VC wunderkind behind Mistral, Revolut and Slack just raised $2.3 billion and predicts the AI revolution is only in ‘the earliest innings’

Index Ventures has worked with a long list of companies that have become mainstays in the tech world. Think fintech giants Revolut and Wise, public transit app Citymapper and food delivery mainstay Deliveroo.

Now, the London-based venture capital fund has raised $2.3 billion from investors to capitalize on the recent surge of AI companies in Europe and beyond, Index announced on Wednesday.

“We're just beginning to see where AI can make a difference,” Hannah Seal, partner at Index Ventures, told Fortune Wednesday. “That's why this is so timely because this is the point at which we really see AI, especially in the application layer, starting to come to fruition.”

Seal said she sees new opportunities in industries like healthcare, hospitality, and education, and historically “uninvestable” sectors that have opened up thanks to AI.

The VC firm, which has offices in London, San Francisco, and New York, will dedicate $800 million of the new capital towards its venture funds and $1.5 billion to growth funds.

Index is no stranger to investing in AI companies. Last year, it was among French startup Mistral’s backers in a $113 million funding round, which increased Mistral’s valuation to €240 million ($260 million). Now, it is Europe’s most valuable AI company at €6 billion ($6.5 billion). Scale AI and Wordsmith are also among Index’s other investments.

To be sure, Index’s funds won’t be devoted only to AI companies, although they will be a big focus.

The fresh capital comes just as the VC industry starts to see early signs of recovering from the spigots running dry over the last few years, balancing out the tech investment spree during the pandemic. For instance, earlier this year, Andreessen Horowitz, a prominent Silicon Valley VC player, announced $7.2 billion in new funding.

“The era of the quick buck mentality is over, and there's a lot of focus on building long-term enduring companies,” Seal said.

AI’s ‘earliest innings’

The world of AI is evolving by the day. Still, “we're really at the earliest innings” when it comes to discovering the tech’s true capabilities across different industries, Seal told Fortune.

“Going forward, there'll be very few sort of AI native companies and non-AI companies,” she said, using the example of mobile companies that feed into the broader technology ecosystem. “AI will permeate every company at some point in the future.”

While we’re still scratching the surface when it comes to AI, Index bases its bets on the founders at the helm of startups.

“We really need to believe when we are backing founders that they are it for the long run … [it’s their] life's mission to do this and solve this problem and build this company. And they're few and far between,” Seal said.

It’s not about AI talent

While Europe has seen some prominent players emerge in the recent generative AI boom, it still needs to catch up with the U.S. as fewer companies have achieved the scale that the likes of OpenAI and Anthropic have.

​​“Over the last decade of investing in technology startups, I think Europe is catching up,” James Wise, partner at VC firm Balderton Capital, said at Fortune’s Brainstorm AI conference in April.

“So it’s still significantly behind in certain areas. But if you look at sort of dollars deployed at almost every stage here, it’s closing the gap with American-based companies.”

But Europe and the U.K. have their strengths when it comes to competing in the fast-moving AI race.

Europe has a robust ecosystem of early-stage AI startups, while Britain is already starting to see funds flow to it in the form of big tech investments by Microsoft and Salesforce’s AI hubs. Index has invented £1 billion ($1.3 billion) in U.K. tech, having backed 17 unicorns.

London, the home of DeepMind, is among the most attractive locations for talent, and several European universities where AI founders started their careers are the breeding grounds for the next wave of companies.

“We think Europe is going to be one of the most important ecosystems for AI,” Seal said, adding that Index is “excited to double down” on investing in the region.

This story was originally featured on Fortune.com