Berlin-based “AI roll-ups” investment firm Tenet launches

A new investment firm, Tenet, has launched in Berlin with a €80 million target for its debut fund, focusing on the emerging "AI roll-ups" strategy. This approach involves acquiring and integrating multiple companies within service sectors like accounting or IT, and then leveraging artificial intelligence to enhance their efficiency. The firm's formation highlights a growing trend in Europe to address a perceived gap in technology adoption, particularly within small and medium-sized businesses. Tenet is backed by four executives with extensive investment experience across venture capital, growth capital, and private equity. The firm's strategy is to invest in AI roll-ups at their inception stage, aiming to transform traditional professional services businesses into scalable, AI-native platforms. This model seeks to bridge the digital divide observed between the US and Europe, where a significant portion of small businesses have adopted vertical SaaS solutions, a rate considerably lower in Europe. The "AI roll-ups" model is attracting attention as it offers a unique solution for companies that may not fit traditional private equity or venture capital mandates. Private equity often requires substantial scale, while early-stage VC may lack the specific expertise for buy-and-build platforms. Tenet aims to fill this niche by supporting founders in acquiring and transforming businesses, thereby driving digital transformation and AI adoption across the European economy, potentially tackling succession crises within SMBs through technological innovation.