Some of the best companies we've backed at General Catalyst didn't fit neatly into an existing category when they were first imagined. The Creation strategy exists to back builders who can see how the world is changing before there is a name for what they're building. Our story with Long Lake started as conversations between friends Alex Taubman and Marc Bhargava and soon included Hemant Taneja, Ken Chenault, and the broader GC team in an effort to build the next generation AI-enabled compounder.
All of our Creation opportunities are built around what we see as exceptional talent. Alex Taubman was one of the youngest Managing Directors at Oaktree and in parallel ran a family investment vehicle focused on smaller founder and family-owned services businesses. He knew how to spot a great business, structure a transaction, and lead a company through its next chapter.
General Catalyst was seeing AI transformation at four layers: chips/hardware, infrastructure, models, and the application layer. While portfolio companies such as Ramp and Glean were tapping into the application layer, there remained a wide opening to bring AI to a broader piece of the economy, especially to services businesses. Over time, what we learned from GC’s investment and work with frontier models, such as Anthropic, allowed us to support Long Lake in bringing forefront technology to new industries.
We believe Long Lake was the first expression of the “AI roll-up” concept. Alex and the GC team were convinced of a massive opportunity to bring AI to a part of the economy that needed it. We see services businesses as a driving force in the global economy, but they are often fragmented, underleveraged, and in most cases running on the same manual processes they used over a decade ago. We believe that AI can bring abundance to the massive services industries.
While private equity has long understood that you could roll up services players and create value through scale and operational discipline, we believe that applied AI could do even more than improve cost structures, and instead fundamentally change the growth profile and what companies could deliver for their customers.
The ambition was to build a new generation of AI native compounders, drawing inspiration from public consolidators like Constellation Software or Danaher. In February 2024, GC’s Creation strategy led the first investment into Long Lake, setting up the structure and conviction to double down as the company proved out the model. It was the kind of financing the Creation team was built for: combining venture-style partnership with deal construction to fund significant M&A in a way that didn't fit any existing category.