Key facts
- Insight Partners has $90 billion in assets under management.
- The firm invests globally across early-stage, growth, and buyout strategies.
- Insight Partners holds stakes in OpenAI and Anthropic.
- Parekh believes AI's potential to accelerate drug discovery and improve healthcare outweighs risks.
- The firm has returned over $20 billion to LPs through strategic sales and IPOs in the last two years.
Devin Parekh, who has co-led the investment firm Insight Partners for 26 years, discussed the firm's deliberate strategy of diversification amid the current venture capital focus on frontier AI labs like OpenAI and Anthropic. In an interview at TechCrunch's StrictlyVC event, Parekh highlighted Insight's approach, which includes early-stage investments, growth capital, and buyouts, contrasting it with what he perceives as a trend of VCs becoming overly concentrated in a few AI companies.
Parekh acknowledged that while risks associated with AI exist, such as potential misuse of open-source models, he believes the benefits, particularly in accelerating drug discovery and improving healthcare through patient data analysis, are more probable and significant. He drew parallels to previous technological advancements, noting that new risks often emerge but are managed over time as living standards rise.
Insight Partners, managing $90 billion in assets, maintains a relatively low public profile, preferring its portfolio performance to speak for itself. Parekh explained that their investment split across strategies is dynamic and global, adapting to market conditions. He noted that buyouts are currently less attractive due to high interest rates and reduced exit multiples, leading the firm to focus more on venture capital. He expressed concern about rising valuations in venture capital, reminiscent of 2021, and suggested that investing earlier and making smaller, scalable bets on winners is a key to their returns.
Regarding geographic concentration, Parekh noted that while AI infrastructure talent is heavily concentrated in San Francisco, talent for AI in specific verticals like financial services is more diverse, citing New York as a hub for companies like Ramp. Insight Partners lost a deal for the AI legal-tech company Legora to General Catalyst, acknowledging that the competitor may have better articulated its value proposition.
Parekh addressed the firm's investments in rival AI companies OpenAI and Anthropic, stating that the internal debate focused more on the timing of entry into earlier rounds rather than the dual investment itself. He explained that at later stages, with no board seats or governance influence, these investments are viewed as buying stock. He differentiated OpenAI as a consumer play and Anthropic as having an enterprise strategy, though noted these distinctions are fluid. He also mentioned that while they avoid direct competition at early stages, information-sharing restrictions are in place.
On physical AI, Parekh described these companies as largely still in the science project phase, with adoption timelines uncertain. He acknowledged his younger, VC son's enthusiasm for the space but maintained a cautious approach. He also touched on the attractiveness of secondaries, emphasizing the importance of liquidity for limited partners (LPs) and noting that Insight Partners has returned over $20 billion to LPs in recent years.