Zach Bratun Glennon, General Partner at Gradient Ventures, joins to discuss the firm’s early conviction in artificial intelligence and how that foresight is shaping today’s investment landscape. Having focused exclusively on AI since 2017, shortly after the groundbreaking transformer research from Google, Zach explains how his background in engineering and data science helped identify the massive potential of AI long before it became mainstream. He shares insights into Gradient’s recently oversubscribed $220 million Fund V, highlighting the surge in investor interest, rapid growth in AI startups, and the expanding ecosystem of founders building in the space. The conversation also tackles the so-called “SaaS apocalypse,” with Zach offering a more measured perspective arguing that rather than a collapse, the sector is undergoing a repricing as AI-native companies reshape the competitive landscape. Looking ahead, he emphasizes how AI-driven innovation will continue to redefine software, creating new opportunities while challenging traditional business models.
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Zach Bratun Glennon, he is the general partner at Gradient.
He joins us via Zoom on this Friday edition of the show.
Zach, it's nice to have you here.
So I know the company has been focused on artificial intelligence well before the hype, well before the headlines.
We're talking all the way back to 2017.
Talk to me about what you, what gave you rather early conviction back then.
Yeah, that's right, and JD, thanks for having me.
We have been investing exclusively in AI since back in 2017.
Um, you know, we were ex-engineers and data scientists ourselves, and we saw the frontier of the capabilities of the technology back in 2017.
We actually announced and launched our fund just a month after the famous Attention is all you needed or transformer paper from Google.
Uh, and we've been at it for this decade, investing in AI and, uh, we really believe that the frontier of the research, which the category really was at that point in time, could be encapsulated into great businesses and really radically scale, uh, technology capabilities.
So, it's been an exciting 10 years.
I gotta ask about your $220 million Fund Five.
It is oversubscribed and is independent.
What does that tell you about momentum even over the course of just the last few years, Zach?
Yeah, you know, Google was the best partner we could have hoped for in 2017 when many LPs would have considered this a niche category, and they were a great partner, but we always contemplated bringing on external investors, and a key premise for the original launch of our fund was to catalyze the AI ecosystem.
And you know, I think that has been accomplished.
I won't take credit for it ourselves entirely, but we have just seen an exponential growth in opportunities and in founders building in the space, an exponential growth in revenue for AI companies, and thereby, you know, there's plenty of interest from LPs who saw our track record, our experience in the network we've built and wanted to come aboard.
So it's really the perfect time for us to, you know, actualize our independence, but Google remains a key partner and investor.
Zach, I want to get your perspective on the so-called SAS apocalypse.
We've watched so many software as a service stocks get absolutely throttled, now viewed as a direct threat to artificial intelligence.
They say software is over.
Seems like you have an argument it's maybe just repricing.
What are you seeing for the software names?
Yeah, look, sometimes I'm happy that I don't have to trade on the public markets where you have to predict whether our growth rate is going to grow by 5% or decline by 5% next year.
We've been investing in the disruptors to incumbent software for 5 to 10 years.
Since we launched our fund, we saw that AI native and AI capabilities embedded within software were going to be key to the future of software, but where we sit today, you know, my personal opinion is that the apocalypse may have been a little bit overblown.
It's just that, yes, people are pricing in a competitive threat for the, you know, 5, 10 year horizon where maybe before people were modeling out kind of continuous growth in uh some of the biggest software names.
Zach Bratun Glennon and general partner at Gradient.
Zach, thanks for being here to make the case.
Enjoy your weekend.
You're welcome back on the show anytime.