We Invest in the Software Processing Infrastructure
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At Sparkle Ventures, we are a technology-driven company dedicated to supporting software infrastructures that unlock the greatest value capture over the coming decade. We invest across three foundational technology systems: Artificial Intelligence (AI), Blockchain Distributed Systems, and Virtualization Technologies. Our approach is rooted in a belief that the most transformative returns arise during the critical middle phase, process innovation, when emerging technologies are integrated, optimized, and scaled through middleware solutions. We outline our view of these technologies, our strategic rationale for focusing on middleware, and our conviction to invest in companies that act as the enablers bridging breakthrough innovations and widespread market adoption.
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1. Every major technological revolution follows a predictable path of Innovation
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Core Invention: Breakthroughs emerge from academic labs, open-source communities, or corporate R&D.
The deep learning revolution began with Geoffrey Hinton’s research on backpropagation, later supercharged by Google’s acquisition of DeepMind and the open-source work behind TensorFlow and PyTorch.
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Process Innovation: This is the middle layer where innovators abstract complexity, rationalize fragmented breakthroughs, and enable large-scale integration.
Containerization was revolutionary but impractical until Docker abstracted away complexity, allowing developers to package applications into lightweight, portable containers. Kubernetes (originally developed at Google) then became the orchestration standard, making cloud-native architectures feasible. More recently, CoreWeave has emerged as an AI-first cloud provider specializing in GPU-accelerated workloads, demonstrating how process innovation continuously refines and expands infrastructure capabilities.
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Commoditization: Once adoption reaches critical mass, technologies become standardized and margins compress, triggering new cycles of innovation.
Once broadband and mobile internet became ubiquitous, content services took over. Netflix, YouTube, and later TikTok became the dominant players, leveraging telco infrastructure without directly owning it. Over-the-top (OTT) services commoditized entertainment delivery, while telcos were left competing on price and network speed, with thinner margins.
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At Sparkle Ventures, we invest in that second step, where middleware becomes indispensable. By capturing value during this phase, we position ourselves to benefit from the outsized returns that occur before widespread commoditization.
3D Printers are middleware between Physical & Digital Worlds.
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The rapid prototyping machine can potentially serve the abstraction of complexity to production to commoditization of production capacities.
At the crossroads of Computer-Aided Design (CAD), Material Science and Machine Learning, it blurs the boundary between software-driven abstraction and physical production.
2. Process innovators operate at the pivotal middle layer of technology adoption​
They do not merely invent novel algorithms or design proprietary hardware; rather, they abstract complexity, rationalize fragmented breakthroughs, and enable larger-scale integration. By doing so, they unlock market-wide efficiency gains and create new standards that entire industries adopt.​
To understand why process innovation holds such potential, consider Cisco during the early internet era. Cisco didn’t invent packet switching, but it integrated and standardized routing protocols, providing the core infrastructure for the modern internet. Later, VMware took existing server hardware and introduced virtualization, revolutionizing how data centers were run. More recently, Snowflake leveraged open-source frameworks and cloud providers to build a managed data platform that abstracted big data complexities for enterprises.
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In each case, the biggest winners were not those who invented the raw protocols or built custom hardware. Instead, they were the process innovators who bridged the gap between invention and adoption - packaging, optimizing, and scaling technology so that it became ubiquitous.
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Application Programming Interfaces (APIs) are the most widely adopted form software interface, offering a service to other pieces of software, amounting 57% of the global internet traffic, contributing to $12T to the Global Economy (API Research, Kong Inc).
3. Three Foundational Systems for a decade of prolific Process Innovation​
When to invest is only half of the equation, so we determined which technologies would offer the greatest opportunity for value capture. Our technology mix has reached maturity but lacks standards, it is foundational to future software systems but complex to scale. These technology systems are synergistic, reinforcing each other to unlock the next wave of digital transformation.
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By merging orchestration (virtualization), intelligence (AI), and trust (blockchain), the software landscape gains a powerful trifecta. This synergy fosters an environment where developers and enterprises can rapidly prototype, test, and deploy new solutions without being hindered by infrastructure or security bottlenecks. Ultimately, this integrated technology stack paves the way for groundbreaking applications - like real-time healthcare diagnostics, fully automated financial trading platforms, and decentralized marketplaces - that redefine how software is developed, delivered, and monetized across the global economy.
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System 1 - Artificial Cognitive Resources​ - We see AI as the modern labor market’s new “cognitive engine.” Neural networks, large language models, and advanced ML algorithms are reshaping work and productivity. AI-driven automation could boost global labor productivity by several order of magnitude, especially in tertiary sectors. However, the true challenge lies not in developing these algorithms but in managing their deployment and performance at scale. Companies optimizing real-time inference exemplify the process innovation we back. They streamline the application and orchestration of advanced models, ensuring that AI can serve as a reliable and scalable cognitive resource for industries worldwide.
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System 2 - Trustless Coordination Networks - Blockchain technology has evolved far beyond cryptocurrencies and now forms the backbone for secure, decentralized systems that redefine value transfer and monetary sovereignty. The amount of financial instruments being tokenized and the integration with traditional finance routes induces greater needs for robust middleware to manage network nodes, cryptographics, and throughput. Companies developing distributed systems for trustless coordination are crucial to driving this transition from niche applications to mainstream economic infrastructure.
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System 3 - Virtualization of Compute Resources - At the cornerstone of modern cloud computing, container orchestration, and edge networks, pioneers such as VMware and Kubernetes revolutionized how businesses manage server workloads, enabling flexible and scalable environments. Recent innovations in GPU virtualization, multi-cloud orchestration, and advanced edge deployments allows complex distributed systems to scale globally.
Connected glasses is paradigm shift from Mobile to Spatial Computing, involving a deep stack of middleware services.
This innovation process on edge computing, computer vision, augmented reality, connectivity optimization and identity protocols is a key enabler to make this concept viable for the mass market within a decade.
4. Researching and Investing ahead of Commoditization
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Our mission can be distilled into three key elements:
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• Transformative Technologies - We seek middleware that reimagines how networks, data, and decentralized systems interoperate, fueling radical efficiency gains and new applications.
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• Capturing Value Shifts - We orchestrate the transition from specialized R&D to mainstream adoption, identifying the pivotal moment where an emerging technology needs process innovation to scale.
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• Investing Early-Stage - We back ambitious founders, often computer scientists, domain experts, and seasoned entrepreneurs, who are building the next wave of digital infrastructure.​
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Our thesis rests on a clear insight: the greatest, most asymmetric returns lie not in raw invention or in the eventual commoditization of products, but in the middle stage of process innovation - the essential layer that integrates, modularizes, and scales emerging breakthroughs. By investing across AI (cognitive resources), Blockchain (trustless coordination), and Virtualization (composability of compute resources), we place ourselves at the crossroads of infrastructure, intelligence, and trust.
