Inside General Catalyst’s $1.5B AI Roll-Up Machine
Sourcery
Services TAM and software-like margins
Marc contrasts the $16T services market to $1T software and argues AI can create software-like margins in services.
Marc Bhargava, Managing Director at General Catalyst and head of the firm’s Creation Strategy, breaks down one of the most significant shifts happening inside venture and private markets today: AI Roll-Ups.
One of the 3 largest venture players with ~$40B AUM, General Catalyst has quietly built a $1.5B AI roll-up engine dedicated to incubating AI-native companies & acquiring the fragmented services businesses they can transform — a model that sits directly at the intersection of venture creation, operational transformation, & what has traditionally been the realm of private equity.
Marc explains why the firm believes the global services economy (a $16 trillion market historically defined by low margins and slow modernization) is now on the verge of being reshaped. Not by traditional software, and not by classic PE rollups, but by AI-enabled companies that combine in-house automation software with the acquisition of real distribution. These companies, built initially inside GC’s Creation Strategy, have already begun doubling EBITDA margins within 12 months, demonstrating what becomes possible when AI automation frees 20–30% of repetitive tasks and allows teams to handle significantly greater throughput.
The conversation goes deep into how GC selects industries for this strategy, mapping 70 services categories down to the 10 where AI can have the most immediate impact. Marc outlines the 4 categories of work AI now reliably automates, from customer service and data entry to content generation and early-stage reasoning, and how those capabilities form the backbone of portfolio companies like Crescendo, Long Lake, Titan MSP, Eudia, & others.
Marc Bhargava: https://x.com/marcbhargava
Molly O’Shea: https://x.com/MollySOShea
Sourcery: https://x.com/sourceryvc
𝐒𝐏𝐎𝐍𝐒𝐎𝐑𝐒
• Brex—The modern finance platform, combining the world’s smartest corporate card with integrated expense management, banking, bill pay, & travel. https://brex.com/sourcery
• Turing—Turing delivers top-tier talent, data, and tools to help AI labs improve model performance—and enables enterprises to turn those models into powerful, production-ready systems. https://turing.com/sourcery
• Carta—Carta connects founders, investors, and limited partners through software purpose-built for private capital. Trusted by 65,000+ companies in 160+ countries, Carta’s platform of software & services lays the groundwork so you can build, invest, and scale with confidence. https://carta.com/sourcery/?utm_medium=newsletter&utm_source=sourcery&utm_campaign=20250923-amer-carta_sourcery_data_insights
• Public–Investing platform Public just launched Generated Assets, which lets you turn any idea into an investable index with AI. With Generated Assets, you can build, backtest, refine, and invest in any thesis with AI. Gone are the days of one-size-fits-all ETFs. public.com/sourcery
Follow Sourcery for the latest updates!
Disclosure
Paid Endorsement. Brokerage services by Open to the Public Investing Inc, member FINRA & SIPC. Advisory services by Public Advisors LLC, SEC-registered adviser. Crypto trading provided by Zero Hash LLC, licensed by the NYSDFS. Generated Assets is an interactive analysis tool by Public Advisors. Output is for informational purposes only and is not an investment recommendation or advice. See disclosures at public.com/disclosures/ga. Matched funds must remain in your account for at least 5 years. Match rate and other terms are subject to change at any time.
The AI-powered Podcast Player
