DIG Ventures Raises $120m Fund III to Back Europe’s Next AI Infrastructure Startups

Europe’s AI startup market is attracting plenty of attention, but the biggest opportunities may not always be the companies building the most visible AI products.

DIG Ventures has closed its third fund at $120 million, with plans to back around 30 European pre-seed and seed-stage companies building the infrastructure behind AI and enterprise software.

The London-based venture firm is targeting areas such as data, identity, compliance and orchestration. Its thesis is fairly simple. As AI makes software faster and cheaper to build, the companies providing the underlying infrastructure could become increasingly important.

A $120m bet on the foundations of AI

Fund III is backed by institutional investors including Horsley Bridge, Sofina, Granite and a leading US university endowment. A group of experienced technology founders are also investors in the fund, including founders associated with Slack, Datadog, Nord Security, Cast AI, Supercell and Dash0.

DIG plans to invest roughly $1 million to $5 million per company, with around 30 investments expected. The firm also intends to lead most of the rounds it participates in and has already started deploying capital.

That puts DIG firmly in the early-stage part of the market, where technical founders are often raising before they have large teams, established revenue or extensive customer traction.

Why infrastructure is becoming the interesting part

There is an obvious rush to build AI applications. But if thousands of companies can build software more quickly using similar foundation models and tools, differentiation can become harder.

That is where DIG sees an opportunity.

The firm's investment thesis focuses on the control points that businesses depend on, including data, identity, compliance and orchestration. Its existing portfolio includes companies such as Dash0, Taktile, CUBE, Nexos.ai and Jack & Jill.

DIG is led by Ross Mason, the founder of MuleSoft, which was acquired by Salesforce for $6.5 billion. The wider team also includes Melissa Klinger and Rytis Vitkauskas, bringing experience across enterprise software, sales, investing and company building.

For founders, that operator background is part of the pitch. DIG says it helps portfolio companies with go-to-market, product decisions, fundraising and expansion into the US.

What founders can take from this

The fund is another sign that investors are looking beyond the obvious AI application layer.

For early-stage founders, that could be useful. You do not necessarily need to build the next consumer AI platform to benefit from the AI boom. There are opportunities in the less visible systems that make AI products reliable, secure, scalable and usable by larger businesses.

It also shows the importance of thinking about where your startup sits in the wider technology stack.

A crowded application market can be difficult to defend. Infrastructure that becomes deeply embedded in how other businesses operate can create a very different type of advantage.

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Could AI infrastructure become a bigger startup opportunity than building another AI application?