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Cathay Innovation Closes $1B Vertical AI Fund to Power Europe’s Industry Transformation

May 27, 2025
Global

  • Backed by 20+ leading international corporations, Cathay Innovation has built the world’s largest VC platform that invests and connects emerging startups to real world industry leaders looking to transform through cutting-edge innovation
  • Cathay Innovation has developed a new approach to venture capital investment in Europe, favoring the creation of durable relationships with the industrial European ecosystem, while still maintaining strong bonds with international innovation hubs such as China and the U.S.
  • Closing at $1B, Fund III marks largest AI-dedicated venture capital fund out of the European Union investing globally in vertical AI-powered solutions, with a focus on 4 key sectors: consumer, healthcare, financial services, and energy / mobility
  • To date, the fund has made 14 investments, half of which are French or European startups
  • Firm named largest French private VC investor per capital deployed into local startups in 2024

 

MAY 27, 2025, Paris, France — Cathay Innovation today announced the final close of its latest venture capital fund at $1B, making it the largest AI-dedicated fund out of the European Union. To date, the firm has deployed €235M from Fund III across 14 investments, with 50 percent based in Europe. Cathay Innovation was recently named the largest French private VC investor per capital deployed into local startups[1], contributing to France’s rise as one of Europe’s top AI and tech hubs.

While headquartered in Paris, the fund invests across Europe, the U.S. and Asia in vertical AI solutions in four key sectors: digital health, fintech, consumer and mobility / energy. The successful close signals a greater shift in AI-era venture capital, where the success of startups and established industry players are increasingly intertwined.

Fund III is backed by a diverse base of institutional investors as well as multinational corporations looking to access the latest AI startup technologies key to industry wide transformation. This includes French industry leaders such as Sanofi, TotalEnergies, Valeo, BNP Paribas Cardif, Groupe SEB and Groupe ADP since first closing, joined by several international industry players like Latam’s Vale Ventures, Copec WIND Ventures and more.

“The successful close of Cathay Innovation Fund III is not only a testament to past financial performance, but to our unique tech investment approach,  focusing on creating mutually beneficial ecosystem synergies while bringing value-added capital to local champions”, said Mingpo Cai, founder and chairman of Cathay Capital and Cathay Innovation. “ By supporting and helping entrepreneurs scale — and uplifting new pioneers who put innovation at the service of the common good — we believe we can accelerate the transformation of  European industry and create lasting economic and societal impact.”

Where AI Meets Industry: Largest Platform for Collaborative Transformation

Beyond investment, Cathay Innovation’s global platform connects startups with its corporate ecosystem, a broad network of corporations to facilitate deeper industry collaboration.  This includes strategic partnerships, co-investments or other business development opportunities.

For instance, major industrial partnerships deployed by Cathay Innovation digital health portfolio companies Owkin, AQEMIA or Inato showcase the pertinence of a platform that combines significant funding capabilities and a strong support of innovators reshaping of the industry.

Cathay Innovation’s vision revolves around the belief that European VC cannot thrive in the long run by duplicating the American approach based on the melding of robust financial markets with the Silicon Valley ecosystem. Taking Europe’s context and needs into account, Cathay Innovation bridges the gap between startups and industry leaders and unlocks access to major innovation hubs.

“At a time when Europe is approaching AI with purpose — prioritizing responsible innovation, strategic autonomy and resilience — Fund III reflects a uniquely European model with global scale: built not just for growth, but for industrial transformation and societal benefit,” said Denis Barrier, Co-founder of Cathay Innovation. “AI is a general-purpose technology — like electricity — with the potential to reinvent entire industries while shifting the role of startups from disruptors to transformation partners. Over the past decade, we’ve built the world’s largest venture capital platform that can connect startups and corporates under one roof — combining capital with industrial innovation to drive this transformation together and create the jobs of tomorrow.”

Cathay Innovation Fund III: Purpose-built for the New Industrial Era

Fund III primarily focuses on startups applying AI deeply tailored to specific sectors. Targeting founders at every stage, Fund III has the capacity to invest up to 100m in one single startup. To date, it has invested in 14 startups across Europe, the U.S., and Asia including:

  • Healthcare: Nabla (AI co-pilot for physicians), AQEMIA (AI + quantum physics drug discovery), Bioptimus (first universal foundation model for biology), Nelly (European fintech simplifying healthcare payments)
  • Financial Services: Range (AI-driven wealth management), Flowdesk (full-stack market-making for digital assets), Ping++ (Open banking and payment infrastructure)
  • Consumer: Ghost (B2B marketplace for excess inventory), Reebelo (marketplace for refurbished tech devices), Imagino (customer data platform for modern brands), Mogic (genAI-powered short-form video creation), Beatbot (intelligent robotic cleaning systems)
  • Energy: David Energy (next-gen retail energy platform), Entalpic (foundation model-based materials discovery for low-carbon innovations)

The firm’s geographic diversity is a strategic advantage in today’s fragmented world, helping European startups, for example, learn from and operate in Silicon Valley, Latam or other parts of the world and vice versa. Fund III is also classified as an Article 8 fund under the EU’s Sustainable Finance Disclosure Regulation (SF DR), reflecting its commitment to environmental and social impact. It backs high-growth companies where AI is used to advance industries in ways that are locally grounded, globally scalable and socially positive.

About Cathay Innovation

Cathay Innovation is a multistage venture capital firm, affiliated to Cathay Capital, investing in founders building transformative businesses across Europe, North America, Asia, Latin America and Africa. Its platform connects founders with investors and its ecosystem of leading Fortune500 corporations to help startups scale and transform industries with consumer to enterprise and AI solutions in commerce, fintech, digital health and mobility / energy. Founded in Paris in 2015, Cathay Innovation now manages over €2.5B AUM with additional offices in San Francisco, Berlin, Madrid, Shanghai and Singapore and has invested in over 120 startups including Chime, Pinduoduo (NASDAQ: PDD), Glovo, Wallbox (NYSE: WBX), Owkin, Getaround, Ledger, ZenBusiness, Alma, Descartes Underwriting and more. To learn more, visit us at www.cathayinnovation.com.

[1] Private Equity Magazine, March 2025