Four years after raising its $112 million debut fund, Glasswing Ventures, a firm focused on seed and pre-seed startups powered by artificial intelligence, has closed a $158 million vehicle.

Raising the second fund was easier than the first, but also different, according to Rudina Seseri, the firm's founder and managing partner. "We no longer have to evangelize that AI is going to be transformative," she said.
  Rudina Seseri (Courtesy of Glasswing) Since its founding in 2016, Glasswing has developed its brand and backed dozens of startups, many of which went on to raise subsequent rounds. However, the Boston-based firm had to compete with other VCs for limited partners' attention and capital.

"LPs were very stretched because everyone came back to market at the same time," Seseri said.

Limited partners have been overwhelmed by an unprecedented number of VC firms returning to market earlier than expected, often with larger fundraising targets. As a result, many LPs didn't have room in their budgets to renew commitments with every one of their VC partners. In some cases, they made the difficult choice to end relationships with the investors, which in many cases were younger firms, according to PitchBook's discussions with LPs.

Despite the competitive fundraising environment, 95% of Glasswing's LPs re-upped to its second fund, Seseri said.

Glasswing's strategy for its second vehicle will be largely the same as for its first. The firm will continue to invest in startups based on the East Coast, writing checks of $2 million in exchange for 20% of the startup. Besides Seseri, the firm is managed by Rick Grinnell and Sarah Fay.

While many VCs took a break from new investments during the summer, Glasswing continued to back companies during the slowdown. Despite the downturn, Seseri said that she only recently noticed a drop in valuations.

"In June, we were still seeing valuation expectations of $20 million to high teens," she said. "Now valuations have dropped to high single digits and low teens, which is where we expect them to be."

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This article originally appeared on PitchBook News