Elad Gil, a renowned solo venture capitalist, has found his next big bet in AI-powered rollups. He's been investing in AI startups like Perplexity, (link unavailable), and Harvey, and now he's focusing on using AI to transform traditional businesses through roll-ups. The idea is to buy mature, people-intensive businesses like law firms, scale them using AI, and then acquire other similar businesses, repeating the process.
Gil believes AI can radically change the cost structure of these businesses, increasing margins dramatically. For instance, AI can automate repetitive tasks such as document processing, research, and data analysis, freeing up professionals to focus on high-value tasks. By owning the business outright, Gil thinks he can transform it more rapidly than just selling software as a vendor.
Gil's approach represents a new wave of technology-enabled roll-ups, distinct from previous attempts that merely applied a "thin veneer" of technology to boost valuations. He's been pursuing this strategy for three years and sees clear winners emerging in various markets. With companies like Enam Co., Harvey, Abridge, and Sierra AI already showing promising results, Gil's bet on AI-powered rollups could potentially revolutionize the way traditional businesses operate.
