The relationship combines the startup incubation expertise of PSL, a nine-year-old studio that assists in getting businesses off the ground, with Mayfield, a Menlo Park mainstay established in 1969 that boasts a roster of industry heavyweights including Lyft, HashiCorp, ServiceMax, and others.
PSL’s venture arm, PSL Ventures, and Mayfield have agreed to provide at least $1.5 million in seed capital to PSL spinouts that concentrate on AI-related technology.
“We’ve really been focusing a lot of our efforts on building defensible new AI-based technology companies and found a partner who feels very similarly — and has incredible talent, resources, and thought leadership around this area.”
PSL Managing Director Greg Gottesman
Navin Chaddha, managing partner at Mayfield, described the partnership as “very complimentary.” PSL specializes in testing new ideas before spinning out startups. Mayfield steps in when companies are ready to raise a venture round and at later stages.
“They have strengths, we have strengths. It’s a bet by both firms on the promise of AI technology and startup creation. It’s a once-in-a-lifetime transformational opportunity in the tech industry.”
Navin Chaddha, Managing Partner, Mayfield
Mayfield last year launched a $250 million fund dedicated to AI. Chaddha published a blog post last month about what Mayfield describes as the “AI cognitive plumbing layer,” where the “picks and shovels” infrastructure companies of the AI industry reside.
“There’s so much infrastructure to be built,” Chaddha said. He added that the applications enabled by new AI technologies such as generative AI are “endless.”
Over 60% of the code created at PSL is now finished by AI, according to Gottesman, who assisted in the company’s creation in 2015 following a lengthy tenure with Seattle investment firm Madrona. This represents a significant shift from only a year prior.
“It’s not that we have humans writing less code — we’re just moving faster,” Gottesman said.
PSL and Mayfield are willing to collaborate with other investors and companies; the $1.5 million seed investment is really the minimum. Another partner in the collaboration is the Richard King Mellon Foundation.
The transaction represents the most recent point of integration between the tech ecosystems in Silicon Valley and Seattle.
In 2022, Madrona—the oldest and biggest venture capital firm in Seattle—opened a new office in the Bay Area and employed a managing director from the area.
Investors from the Bay Area have been pouring money into startups in the Seattle area more and more; among them is Mayfield, which has supported companies including Outreach, SeekOut, Revefi, and Skilljar. Early investors in Concur, the massive travel expenditure company that went public in 1998, included the corporation.
Prior to Microsoft acquiring his streaming video business VXtreme in 1997, Chaddha resided in the Seattle region. He collaborated with Satya Nadella, who eventually rose to the position of CEO, for a few years at the tech behemoth based in Redmond.
“I think it’s fantastic that Mayfield is making a commitment not just to AI, but also to the Seattle area as well,” said Gottesman. In order to maintain its studio, which has produced over 35 startups, including Boundless, Recurrent, SingleFile, and others, PSL raised a $20 million third fund last year. Job listings highlight innovative firm concepts pertaining to workflow operations for go-to-market executives and automation around hardware creation. In 2021, the PSL Ventures fund brought in $100 million.
