Back in 2020, long before AI became the default slide in every pitch deck, we noticed a subtle shift. AI was beginning to move from research to product, from theory to something founders could actually build real companies around.

At Neon Fund, that shift shaped how we invested early because it felt inevitable to us.

This week, we announced the close of Neon Fund III at $25 million. For us it’s a continuation of a belief we’ve been building towards for years.

The belief that Enterprise AI wouldn’t be a single wave, but a collection of category-defining verticals. Our coverage now spans:

Vertical AI

• In Legal, SpotDraft, an AI-driven contract automation platform, recently raised a $54M Series B, validating the scale of AI-first workflows in enterprise legal teams.
• In ITSM, AtomicWork, founded by Vijay (co-founder, Minjar Cloud), Kiran Darisi (co-founder, Freshworks), and Parasu (co-founder, Freshworks), is reimagining IT service management with an AI-first approach.
• In Construction, Merlin AI is challenging incumbents like Procore by building an AI-native construction ERP from the ground up.
• Across Healthcare and Life Sciences, companies like RapidClaims and Pienomial are reshaping complex workflows. RapidClaims focuses on medical coding and claims automation, and Pienomial transforming life sciences operations.

Cybersecurity

• In Cybersecurity, our portfolio includes CloudSEK, Astra Security, and CyberSierra, each tackling modern enterprise threats with AI-led approaches.

DevTools & Infrastructure

• And in DevTools & Infrastructure, early bets such as Requestly, Logiq, and Zenduty led to successful acquisitions by BrowserStack, Apica, and Xurrent respectively, while GameStateLabs, our latest investment, is powering the next generation of GameTech infrastructure.

With Fund III, we’re able to write deeper conviction cheques between $500K – $1M. The idea is to back companies early and help them scale them to $10M ARR using our GTM network. That philosophy continues to anchor how we invest.

Fund III brought together a thoughtful mix of Indian and global investors, including Foundation Capital, RTP Global, and Play Capital, alongside founders of billion-dollar B2B companies such as Tekion, 6sense, HighLevel, and DevRev. We’re also grateful to have global leaders from Amazon, Microsoft, Oracle, NetApp, and Hewlett Packard Enterprise as LPs in the Neon Fund.

For us, this mix matters. Enterprise is built at the intersection of product depth and operational experience.

The AI wave may feel sudden from the outside. From where we stand, it’s been years in the making.

We leaned in when AI was still expensive, complex, and misunderstood. We stayed patient while founders did the hard, unglamorous work of building real products. Now, as AI becomes foundational, that early conviction is beginning to compound.

And for us at Neon, the work has already been in progress. The fund announcement is an extension to what we have been doing.