Thrive and General Catalyst embrace PE-style roll-ups to build AI-native platforms
Top venture capital firms are increasingly embracing a strategy long associated with private equity: rolling up fragmented businesses to build sector leaders.
Investors such as Thrive Capital, General Catalyst, and others are deploying this approach to consolidate industries like wealth management, real estate, and legal services by acquiring smaller players and integrating them into platform companies.
Thrive Capital, a backer of OpenAI and Stripe, recently led a $72m funding round in Savvy Wealth, a New York-based digital wealth manager. The deal, which values Savvy at $225m, aims to finance a spree of acquisitions and adviser hires. It also supports the integration of artificial intelligence into its operations, particularly to automate back-office processes.
Meanwhile, General Catalyst has earmarked $750m for similar roll-up strategies, targeting sectors such as call centres and property lettings. Its portfolio company Dwelly has already acquired three UK lettings agencies and now manages over 2,000 properties, with automation at the core of its growth plan.
Unlike traditional private equity roll-ups, which often rely on heavy debt loads and aggressive cost-cutting, these venture capital-backed plays are betting on AI and digital efficiencies to drive margin expansion and scalability.
The roll-up model reflects a shift in VC strategy as firms seek liquidity in a cooling IPO and M&A environment. As Marc Bhargava of General Catalyst explained, the convergence of AI innovation and industry consolidation offers “the best of both worlds, PE and VC.”
However, not all investors are convinced. Some limited partners remain cautious, warning that retrofitting legacy businesses with AI may face significant execution risks and cultural hurdles.
Nonetheless, the trend signals a notable blurring of the lines between venture capital and private equity, as VCs look to replicate the value creation playbooks traditionally used by buyout funds.