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The AI market is growing, but how quickly is tough to pin down

Holden Page
Contributor

Holden Page is an editor and journalist at Crunchbase News.

If you work in tech, you’ve heard about artificial intelligence: how it’s going to replace uswhether it’s over-hyped or not and which nations will leverage it to prevent, or instigate, war.

Our editorial bent is more clear-cut: How much money is going into startups? Who is putting that money in? And what trends can we suss out about the health of the market over time?

So let’s talk about the state of AI startups and how much capital is being raised. Here’s what I can tell you: funding totals for AI startups are growing year-over-year; I just don’t know precisely how quickly. Regardless, startups are certainly raising massive sums of money off the buzzword.

To make that point, here are just a few of the biggest rounds announced and recorded by Crunchbase in 2018:

  • SenseTime, a China-based startup that is quite good at tracking your face wherever it may be, raised a $1 billion Series D round. It was the largest round of the year in the AI category, according to Crunchbase. But what’s more mind-blowing is that the company raised a total of $2.2 billion in just one year across three rounds. A picture is worth a thousand words, but a face is worth billions of dollars.
  • UBTech Robotics, another China-based startup focusing on robotics, raised an $820 million Series C. Just a cursory look at its website, however, makes UBTech appear to be a high-end toy maker rather than an AI innovator.
  • And biotech startup Zymergen, which “manufactures microbes for Fortune 500 companies,” according to Crunchbase, raised a $400 million Series C.

Now, this is the part I normally include a chart and 400 words of copy to contextualize the AI market. But if you read the above descriptions closely, you’ll see our problem: What the hell does “AI” mean?

Take Zymergen as an example. Crunchbase tags it with the AI marker. Bloomberg, citing data from CB Insights, agrees. But if you were making the decision, would you demarcate it as an AI company?

Zymergen’s own website doesn’t employ the phrase. Rather, it uses buzzwords commonly associated with AI — machine learning, automation. Zymergen’s home page, technology page and careers page are devoid of the term.

Instead, the company focuses on molecular technology. Artificial intelligence is not, in fact, what Zymergen is selling. We also know that Zymergen uses some AI-related tools to help it understand its data sets (check its jobs page for more). But is that enough to call it an AI startup? I don’t think so. I would call it biotech.

That brings us back to the data. In the spirit of transparency, CB Insights reports a 72 percent boost in 2018 AI investment over 2017 funding totals. Crunchbase data pegs 2018’s AI funding totals at a more modest 38 percent increase over the preceding year.

So we know that AI fundraising for private companies is growing. The two numbers make that plain. But it’s increasingly clear to me after nearly two years of staring at AI funding rounds that there’s no market consensus over exactly what counts as an AI startup. Bloomberg in its coverage of CB Insights’ report doesn’t offer a definition. What would yours be?

If you don’t have one, don’t worry; you’re not alone. Professionals constantly debate what AI actually means, and who actually deserves the classification. There’s no taxonomy for startups like how we classify animals. It’s flexible, and with PR, you can bend perception past reality.

I have a suspicion there are startups that overstate their proximity to AI. For instance, is employing Amazon’s artificial intelligence services in your back end enough to call yourself an AI startup? I would say no. But after perusing Crunchbase data, you can see plenty of startups that classify themselves on such slippery grounds.

And the problem we’re encountering rhymes well with a broader definitional crisis: What exactly is a tech company? In the case of Blue Apron, public investors certainly differed with private investors over the definition, as Alex Wilhelm has touched on before.

So what I can tell you is that AI startup funding is up. By how much? A good amount. But the precise figure is hard to pin down until we all agree what counts as an AI startup.

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Former Facebook engineer picks up $15M for AI platform Spell

In 2016, Serkan Piantino packed up his desk at Facebook with hopes to move on to something new. The former director of Engineering for Facebook AI Research had every intention to keep working on AI, but quickly realized a huge issue.

Unless you’re under the umbrella of one of these big tech companies like Facebook, it can be very difficult and incredibly expensive to get your hands on the hardware necessary to run machine learning experiments.

So he built Spell, which today received $15 million in Series A funding led by Eclipse Ventures and Two Sigma Ventures.

Spell is a collaborative platform that lets anyone run machine learning experiments. The company connects clients with the best, newest hardware hosted by Google, AWS and Microsoft Azure and gives them the software interface they need to run, collaborate and build with AI.

“We spent decades getting to a laptop powerful enough to develop a mobile app or a website, but we’re struggling with things we develop in AI that we haven’t struggled with since the 70s,” said Piantino. “Before PCs existed, the computers filled the whole room at a university or NASA and people used terminals to log into a single main frame. It’s why Unix was invented, and that’s kind of what AI needs right now.”

In a meeting with Piantino this week, TechCrunch got a peek at the product. First, Piantino pulled out his MacBook and opened up Terminal. He began to run his own code against MNIST, which is a database of handwritten digits commonly used to train image detection algorithms.

He started the program and then moved over to the Spell platform. While the original program was just getting started, Spell’s cloud computing platform had completed the test in less than a minute.

The advantage here is obvious. Engineers who want to work on AI, either on their own or for a company, have a huge task in front of them. They essentially have to build their own computer, complete with the high-powered GPUs necessary to run their tests.

With Spell, the newest GPUs from Nvidia and Google are virtually available for anyone to run their tests.

Individual users can get on for free, specify the type of GPU they need to compute their experiment and simply let it run. Corporate users, on the other hand, are able to view the runs taking place on Spell and compare experiments, allowing users to collaborate on their projects from within the platform.

Enterprise clients can set up their own cluster, and keep all of their programs private on the Spell platform, rather than running tests on the public cluster.

Spell also offers enterprise customers a “spell hyper” command that offers built-in support for hyperparameter optimization. Folks can track their models and results and deploy them to Kubernetes/Kubeflow in a single click.

But perhaps most importantly, Spell allows an organization to instantly transform their model into an API that can be used more broadly throughout the organization, or used directly within an app or website.

The implications here are huge. Small companies and startups looking to get into AI now have a much lower barrier to entry, whereas large traditional companies can build out their own proprietary machine learning algorithms for use within the organization without an outrageous upfront investment.

Individual users can get on the platform for free, whereas enterprise clients can get started for $99/month per host you use over the course of a month. Piantino explains that Spell charges based on concurrent usage, so if the customer has 10 concurrent things running, the company considers that the “size” of the Spell cluster and charges based on that.

Piantino sees Spell’s model as the key to defensibility. Whereas many cloud platforms try to lock customers in to their entire suite of products, Spell works with any language framework and lets users plug and play on the platforms of their choice by simply commodifying the hardware. In fact, Spell doesn’t even share with clients which cloud cluster (Microsoft Azure, Google or AWS) they’re on.

So, on the one hand the speed of the tests themselves goes up based on access to new hardware, but, because Spell is an agnostic platform, there is also a huge advantage in how quickly one can get set up and start working.

The company plans to use the funding to further grow the team and the product, and Piantino says he has his eye out for top-tier engineering talent, as well as a designer.

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Computer vision startup AnyVision pulls in new funding from Lightspeed

While there have been a few massive surveillance startups in China that have raised funds on the back of computer vision advances, there’s seemed to be less fervor outside of that market. Tel Aviv-based AnyVision is aiming to leverage its computer vision chops in tracking people and objects to create some pretty clear utility for the enterprise world.

After announcing a $28 million Series A in mid-2018, the computer vision startup is bringing Lightspeed Venture Partners into the raise, closing out the round at $43 million.

“When you have a company with the technology AnyVision has, and the market need that I’m hearing from across industries, what you need to do is push the gas pedal and build an organization which can monetize and take on this opportunity to grow massively,” Lightspeed partner Raviraj Jain told TechCrunch.

Right now the 200-person company has its eyes on the security and identity markets as it aims to bring its computer vision technology into more industry-tailored solutions.

The company’s “Better Tomorrow” product delivers camera-agnostic surveillance insights from its object and human-tracking tech. “Sesame” is the company’s consumer-facing play for bringing mobile banking authentication to hundreds of millions of phones. The company is still looking to release a retail analytics platform to customers, as well.

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K Health raises $25M for its AI-powered primary care platform

K Health, the startup providing consumers with an AI-powered primary care platform, has raised $25 million in Series B funding. The round was led by 14W, Comcast Ventures and Mangrove Capital Partners, with participation from Lerer HippeauBoxGroup and Max Ventures — all previous investors from the company’s seed or Series A rounds. Other previous investors include Primary Ventures and Bessemer Venture Partners.

Co-founded and led by former Vroom CEO and Wix co-CEO Allon Bloch, K Health (previously Kang Health) looks to equip consumers with a free and easy-to-use application that can provide accurate, personalized, data-driven information about their symptoms and health.

“When your child says their head hurts, you can play doctor for the first two questions or so — where does it hurt? How does it hurt?” Bloch explained in a conversation with TechCrunch. “Then it gets complex really quickly. Are they nauseous or vomiting? Did anything unusual happen? Did you come back from a trip somewhere? Doctors then use differential diagnosis to prove that it’s a tension headache versus other things by ruling out a whole list of chronic or unusual conditions based on their deep knowledge sets.”

K Health’s platform, which currently focuses on primary care, effectively looks to perform a simulation and data-driven version of the differential diagnosis process. On the company’s free mobile app, users spend three-to-four minutes answering an average of 21 questions about their background and the symptoms they’re experiencing.

Using a data set of two billion historical health events over the past 20 years — compiled from doctors’ notes, lab results, hospitalizations, drug statistics and outcome data — K Health is able to compare users to those with similar symptoms and medical histories before zeroing in on a diagnosis. 

With its expansive comparative approach, the platform hopes to offer vastly more thorough, precise and user-specific diagnostic information relative to existing consumer alternatives, like WebMD or, what Bloch calls “Dr. Google,” which often produce broad, downright frightening and inaccurate diagnoses. 

Ease and efficiency for both consumers and physicians

Users are able to see cases and diagnoses that had symptoms similar to their own, with K Health notifying users with serious conditions when to consider seeking immediate care. (K Health Press Image / K Health / https://www.khealth.ai)

In addition to pure peace of mind, the utility provided to consumers is clear. With more accurate at-home diagnostic information, users are able to make better preventative health decisions, avoid costly and unnecessary trips to in-person care centers or appointments with telehealth providers and engage in constructive conversations with physicians when they do opt for in-person consultations.

K Health isn’t looking to replace doctors, and, in fact, believes its platform can unlock tremendous value for physicians and the broader healthcare system by enabling better resource allocation. 

Without access to quality, personalized medical information at home, many defer to in-person doctor visits even when it may not be necessary. And with around one primary care physician per 1,000 people in the U.S., primary care practitioners are subsequently faced with an overwhelming number of patients and are unable to focus on more complex cases that may require more time and resources. The high volume of patients also forces physicians to allocate budgets for support staff to help interact with patients, collect initial background information and perform less-demanding tasks.

K Health believes that by providing an accurate alternative for those with lighter or more trivial symptoms, it can help lower unnecessary in-person visits, reduce costs for practices and allow physicians to focus on complicated, rare or resource-intensive cases, where their expertise can be most useful and where brute machine processing power is less valuable.

The startup is looking to enhance the platform’s symbiotic patient-doctor benefits further in early-2019, when it plans to launch in-app capabilities that allow users to share their AI-driven health conversations directly with physicians, hopefully reducing time spent on information gathering and enabling more-informed treatment.

With K Health’s AI and machine learning capabilities, the platform also gets smarter with every conversation as it captures more outcomes, hopefully enriching the system and becoming more valuable to all parties over time. Initial results seem promising, with K Health currently boasting around 500,000 users, most having joined since this past July.

Using access and affordability to improve global health outcomes

With the latest round, the company has raised a total of $37.5 million since its late-2016 founding. K Health plans to use the capital to ramp up marketing efforts, further refine its product and technology and perform additional research to identify methods for earlier detection and areas outside of primary care where the platform may be valuable.

Longer term, the platform has much broader aspirations of driving better health outcomes, normalizing better preventative health behavior and creating more efficient and affordable global healthcare systems.

The high costs of the American healthcare system and the impacts they have on health behavior has been well-documented. With heavy co-pays, premiums and treatment cost, many avoid primary care altogether or opt for more reactionary treatment, leading to worse health outcomes overall.

Issues seen in the American healthcare system are also observable in many emerging market countries with less medical infrastructure. According to the World Health Organization, the international standard for the number of citizens per primary care physician is one for every 1,500 to 2,000 people, with some countries facing much steeper gaps — such as China, where there is only one primary care doctor for every 6,666.

The startup hopes it can help limit the immense costs associated with emerging countries educating millions of doctors for eight-to-10 years and help provide more efficient and accessible healthcare systems much more quickly.

By reducing primary care costs for consumers and operating costs for medical practices, while creating a more convenient diagnostic experience, K Health believes it can improve access to information, ultimately driving earlier detection and better health outcomes for consumers everywhere.

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Chorus.ai rings up $33M for its platform that analyses sales calls to close more deals

Chorus.ai, a service that listens to sales calls in real time, and then transcribes and analyses them to give helpful tips to the salesperson, has raised $33 million to double down on the current demand for more AI-based tools in the enterprise.

The Series B is being led by Georgian Partners, with participation also from Redpoint Ventures and Emergence Capital, previous investors that backed Israeli-founded, SF-based Chorus.ai in its $16 million Series A two years ago.

In the gap between then and now, the startup has seen strong growth, listening in to some 5 million calls, and performing hundreds of thousands of hours of transcriptions for around 200 customers, including Adobe, Zoom, and Outreach (among others that it will not name).

Micha Breakstone, the co-founder (who has a pretty long history in conversational AI, heading up R&D at Ginger Software and then Intel after it acquired the startup; and before that building the tech that eventually became Summly and got acquired by Yahoo, among other roles), says that while the platform gives information and updates to salespeople in real time, much of the focus today is on providing information to users post-conversation, based on both audio and video calls.

One of its big areas is “smart themes” — patterns and rules Chorus has learned through all those calls. For example, it has identified what kind of language the most successful sales people are using and in turn prompts those who are less successful to use it more. Two general tips Breakstone told me about: using more collaborative terms like we and us; and giving more backstory to clients, although there will be more specific themes and approaches based on Chorus’s specific customers and products.

“I’d say we are super attuned to our customers and what they need and want,” Breakstone said. Which makes sense given the whole premise of Chorus.

It also creates smart “playlists” for managers who will almost certainly never have the time to review hundreds of hours of calls but might want to hear instructive highlights or ‘red alert’ moments where a more senior person might need to step in to save or close a deal.

There are currently what seems like dozens of startups and larger businesses that are currently tackling the opportunity to provide “conversational intelligence” to sales teams, using advances in natural language processing, voice recognition, machine learning and big data to help turn every sales person into a Jerry Maguire (yes, I know he’s an agent, but still, he needs to close deals, and he’s a salesman). They include TalkIQ (which has now been acquired by Dialpad), People.AI, Gong, Voicera, VoiceOps, and I’m pulling from a long list.

“We were among the very first to start this, no one knew what conversational intelligence was before us,” Breakstone says. He describes most of what was out in the market at the time as “Nineties technology” and adds that “our tech is superior because we built it in the correct way from the ground up, with nothing sent to a third party.”

He says that this is one reason why the company has negative churn — it essentially wins customers and hasn’t lost any. And having the tech all in-house not only means the platform is smarter and more accurate, but that helps with compliance around regulations like GDPR, which also has been a boost to its business. It’s also scored well on metrics around reps hitting targets better with its tools (the company claims its products lead to 50 percent greater quota attainment and ‘ramp time’ up by 30 percent for new sales people who use it).

Chorus.ai has helped us become a smarter sales organization as we’ve scaled. We have visibility into our sales conversations and what is working across all of our offices”, said Greg Holmes, Head of Sales for Zoom Video Communications, in a statement. “We’ve seen a drastic reduction in new hire ramp times and higher sales productivity with even more reps hitting quota. Chorus.ai is a game changer.”

Chorus has raised $55 million to date and Breakstone said he would not disclose its valuation — despite my best attempts to use some of those sales tips to winkle the information out of him. But I understand it to be “significantly higher” than in its last round, and definitely in the hundreds of millions.

As a point of reference, after its Series A two years ago, it was only valued at around $33 million post-money according to PitchBook.

“Maintaining high-quality sales conversations as you scale a sales organization is hard for many companies, but key to delivering predictable revenue growth. Chorus.ai’s Conversation Intelligence platform solves that challenge with a market-leading solution that is easy-to-use and delivers best-in-class results.” said Simon Chong, Managing Partner at Georgian Partners, in a statement. (Chong is joining the board with this round.) “Chorus.ai works with some of the best sales teams in the world and they love the product. We are very excited to partner with Chorus.ai on their next phase of growth as they help world class sales teams reach higher quota attainment and efficiency.”

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TechSee nabs $16M for its customer support solution built on computer vision and AR

Chatbots and other AI-based tools have firmly found footing in the world of customer service, used either to augment or completely replace the role of a human responding to questions and complaints, or (sometimes, annoyingly, at the same time as the previous two functions) sell more products to users.

Today, an Israeli startup called TechSee is announcing $16 million in funding to help build out its own twist on that innovation: an AI-based video service, which uses computer vision, augmented reality and a customer’s own smartphone camera to provide tech support to customers, either alongside assistance from live agents, or as part of a standalone customer service “bot.”

Led by Scale Venture Partners — the storied investor that has been behind some of the bigger enterprise plays of the last several years (including Box, Chef, Cloudhealth, DataStax, Demandbase, DocuSign, ExactTarget, HubSpot, JFrog and fellow Israeli AI assistance startup WalkMe), the Series B also includes participation from Planven Investments, OurCrowd, Comdata Group and Salesforce Ventures. (Salesforce was actually announced as a backer in October.)

The funding will be used both to expand the company’s current business as well as move into new product areas like sales.

Eitan Cohen, the CEO and co-founder, said that the company today provides tools to some 15,000 customer service agents and counts companies like Samsung and Vodafone among its customers across verticals like financial services, tech, telecoms and insurance.

The potential opportunity is big: Cohen estimates there are about 2 million customer service agents in the U.S., and about 14 million globally.

TechSee is not disclosing its valuation. It has raised around $23 million to date.

While TechSee provides support for software and apps, its sweet spot up to now has been providing video-based assistance to customers calling with questions about the long tail of hardware out in the world, used for example in a broadband home Wi-Fi service.

In fact, Cohen said he came up with the idea for the service when his parents phoned him up to help them get their cable service back up, and he found himself challenged to do it without being able to see the set-top box to talk them through what to do.

So he thought about all the how-to videos that are on platforms like YouTube and decided there was an opportunity to harness that in a more organised way for the companies providing an increasing array of kit that may never get the vlogger treatment.

“We are trying to bring that YouTube experience for all hardware,” he said in an interview.

The thinking is that this will become a bigger opportunity over time as more services get digitised, the cost of components continues to come down and everything becomes “hardware.”

“Tech may become more of a commodity, but customer service does not,” he added. “Solutions like ours allow companies to provide low-cost technology without having to hire more people to solve issues [that might arise with it.]”

The product today is sold along two main trajectories: assisting customer reps; and providing unmanned video assistance to replace some of the easier and more common questions that get asked.

In cases where live video support is provided, the customer opts in for the service, similar to how she or he might for a support service that “takes over” the device in question to diagnose and try to fix an issue. Here, the camera for the service becomes a customer’s own phone.

Over time, that live assistance is used in two ways that are directly linked to TechSee’s artificial intelligence play. First, it helps to build up TechSee’s larger back catalogue of videos, where all identifying characteristics are removed with the focus solely on the device or problem in question. Second, the experience in the video is also used to build TechSee’s algorithms for future interactions. Cohen said there are now “millions” of media files — images and videos — in the company’s catalogue.

The effectiveness of its system so far has been pretty impressive. TechSee’s customers — the companies running the customer support — say they have on average seen a 40 percent increase in customer satisfaction (NPS scores), a 17 percent decrease in technician dispatches and between 20 and 30 percent increase in first-call resolutions, depending on the industry.

TechSee is not the only company that has built a video-based customer engagement platform: others include Stryng, CallVU and Vee24. And you could imagine companies like Amazon — which is already dabbling in providing advice to customers based on what its Echo Look can see — might be interested in providing such services to users across the millions of products that it sells, as well as provide that as a service to third parties.

According to Cohen, what TechSee has going for it compared to those startups, and also the potential entry of companies like Microsoft or Amazon into the mix, is a head start on raw data and a vision of how it will be used by the startup’s AI to build the business.

“We believe that anyone who wants to build this would have a challenge making it from scratch,” he said. “This is where we have strong content, millions of images, down to specific model numbers, where we can provide assistance and instructions on the spot.”

Salesforce’s interest in the company, he said, is a natural progression of where that data and customer relationship can take a business beyond responsive support into areas like quick warranty verification (for all those times people have neglected to do a product registration), snapping fender benders for insurance claims and of course upselling to other products and services.

“Salesforce sees the synergies between the sales cloud and the service cloud,” Cohen said.

“TechSee recognized the great potential for combining computer vision AI with augmented reality in customer engagement,” said Andy Vitus, partner at Scale Venture Partners, who joins the board with this round. “Electronic devices become more complex with every generation, making their adoption a perennial challenge. TechSee is solving a massive problem for brands with a technology solution that simplifies the customer experience via visual and interactive guidance.”

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Agtech startup Imago AI is using computer vision to boost crop yields

Presenting onstage today in the 2018 TC Disrupt Berlin Battlefield is Indian agtech startup Imago AI, which is applying AI to help feed the world’s growing population by increasing crop yields and reducing food waste. As startup missions go, it’s an impressively ambitious one.

The team, which is based out of Gurgaon near New Delhi, is using computer vision and machine learning technology to fully automate the laborious task of measuring crop output and quality — speeding up what can be a very manual and time-consuming process to quantify plant traits, often involving tools like calipers and weighing scales, toward the goal of developing higher-yielding, more disease-resistant crop varieties.

Currently they say it can take seed companies between six and eight years to develop a new seed variety. So anything that increases efficiency stands to be a major boon.

And they claim their technology can reduce the time it takes to measure crop traits by up to 75 percent.

In the case of one pilot, they say a client had previously been taking two days to manually measure the grades of their crops using traditional methods like scales. “Now using this image-based AI system they’re able to do it in just 30 to 40 minutes,” says co-founder Abhishek Goyal.

Using AI-based image processing technology, they can also crucially capture more data points than the human eye can (or easily can), because their algorithms can measure and asses finer-grained phenotypic differences than a person might pick up on or be easily able to quantify just judging by eye alone.

“Some of the phenotypic traits they are not possible to identify manually,” says co-founder Shweta Gupta. “Maybe very tedious or for whatever all these laborious reasons. So now with this AI-enabled [process] we are now able to capture more phenotypic traits.

“So more coverage of phenotypic traits… and with this more coverage we are having more scope to select the next cycle of this seed. So this further improves the seed quality in the longer run.”

The wordy phrase they use to describe what their technology delivers is: “High throughput precision phenotyping.”

Or, put another way, they’re using AI to data-mine the quality parameters of crops.

“These quality parameters are very critical to these seed companies,” says Gupta. “Plant breeding is a very costly and very complex process… in terms of human resource and time these seed companies need to deploy.

“The research [on the kind of rice you are eating now] has been done in the previous seven to eight years. It’s a complete cycle… chain of continuous development to finally come up with a variety which is appropriate to launch in the market.”

But there’s more. The overarching vision is not only that AI will help seed companies make key decisions to select for higher-quality seed that can deliver higher-yielding crops, while also speeding up that (slow) process. Ultimately their hope is that the data generated by applying AI to automate phenotypic measurements of crops will also be able to yield highly valuable predictive insights.

Here, if they can establish a correlation between geotagged phenotypic measurements and the plants’ genotypic data (data which the seed giants they’re targeting would already hold), the AI-enabled data-capture method could also steer farmers toward the best crop variety to use in a particular location and climate condition — purely based on insights triangulated and unlocked from the data they’re capturing.

One current approach in agriculture to selecting the best crop for a particular location/environment can involve using genetic engineering. Though the technology has attracted major controversy when applied to foodstuffs.

Imago AI hopes to arrive at a similar outcome via an entirely different technology route, based on data and seed selection. And, well, AI’s uniform eye informing key agriculture decisions.

“Once we are able to establish this sort of relation this is very helpful for these companies and this can further reduce their total seed production time from six to eight years to very less number of years,” says Goyal. “So this sort of correlation we are trying to establish. But for that initially we need to complete very accurate phenotypic data.”

“Once we have enough data we will establish the correlation between phenotypic data and genotypic data and what will happen after establishing this correlation we’ll be able to predict for these companies that, with your genomics data, and with the environmental conditions, and we’ll predict phenotypic data for you,” adds Gupta.

“That will be highly, highly valuable to them because this will help them in reducing their time resources in terms of this breeding and phenotyping process.”

“Maybe then they won’t really have to actually do a field trial,” suggests Goyal. “For some of the traits they don’t really need to do a field trial and then check what is going to be that particular trait if we are able to predict with a very high accuracy if this is the genomics and this is the environment, then this is going to be the phenotype.”

So — in plainer language — the technology could suggest the best seed variety for a particular place and climate, based on a finer-grained understanding of the underlying traits.

In the case of disease-resistant plant strains it could potentially even help reduce the amount of pesticides farmers use, say, if the the selected crops are naturally more resilient to disease.

While, on the seed generation front, Gupta suggests their approach could shrink the production time frame — from up to eight years to “maybe three or four.”

“That’s the amount of time-saving we are talking about,” she adds, emphasizing the really big promise of AI-enabled phenotyping is a higher amount of food production in significantly less time.

As well as measuring crop traits, they’re also using computer vision and machine learning algorithms to identify crop diseases and measure with greater precision how extensively a particular plant has been affected.

This is another key data point if your goal is to help select for phenotypic traits associated with better natural resistance to disease, with the founders noting that around 40 percent of the world’s crop load is lost (and so wasted) as a result of disease.

And, again, measuring how diseased a plant is can be a judgement call for the human eye — resulting in data of varying accuracy. So by automating disease capture using AI-based image analysis the recorded data becomes more uniformly consistent, thereby allowing for better quality benchmarking to feed into seed selection decisions, boosting the entire hybrid production cycle.

Sample image processed by Imago AI showing the proportion of a crop affected by disease

In terms of where they are now, the bootstrapping, nearly year-old startup is working off data from a number of trials with seed companies — including a recurring paying client they can name (DuPont Pioneer); and several paid trials with other seed firms they can’t (because they remain under NDA).

Trials have taken place in India and the U.S. so far, they tell TechCrunch.

“We don’t really need to pilot our tech everywhere. And these are global [seed] companies, present in 30, 40 countries,” adds Goyal, arguing their approach naturally scales. “They test our technology at a single country and then it’s very easy to implement it at other locations.”

Their imaging software does not depend on any proprietary camera hardware. Data can be captured with tablets or smartphones, or even from a camera on a drone or using satellite imagery, depending on the sought for application.

Although for measuring crop traits like length they do need some reference point to be associated with the image.

“That can be achieved by either fixing the distance of object from the camera or by placing a reference object in the image. We use both the methods, as per convenience of the user,” they note on that.

While some current phenotyping methods are very manual, there are also other image-processing applications in the market targeting the agriculture sector.

But Imago AI’s founders argue these rival software products are only partially automated — “so a lot of manual input is required,” whereas they couch their approach as fully automated, with just one initial manual step of selecting the crop to be quantified by their AI’s eye.

Another advantage they flag up versus other players is that their approach is entirely non-destructive. This means crop samples do not need to be plucked and taken away to be photographed in a lab, for example. Rather, pictures of crops can be snapped in situ in the field, with measurements and assessments still — they claim — accurately extracted by algorithms which intelligently filter out background noise.

“In the pilots that we have done with companies, they compared our results with the manual measuring results and we have achieved more than 99 percent accuracy,” is Goyal’s claim.

While, for quantifying disease spread, he points out it’s just not manually possible to make exact measurements. “In manual measurement, an expert is only able to provide a certain percentage range of disease severity for an image example; (25-40 percent) but using our software they can accurately pin point the exact percentage (e.g. 32.23 percent),” he adds.

They are also providing additional support for seed researchers — by offering a range of mathematical tools with their software to support analysis of the phenotypic data, with results that can be easily exported as an Excel file.

“Initially we also didn’t have this much knowledge about phenotyping, so we interviewed around 50 researchers from technical universities, from these seed input companies and interacted with farmers — then we understood what exactly is the pain-point and from there these use cases came up,” they add, noting that they used WhatsApp groups to gather intel from local farmers.

While seed companies are the initial target customers, they see applications for their visual approach for optimizing quality assessment in the food industry too — saying they are looking into using computer vision and hyper-spectral imaging data to do things like identify foreign material or adulteration in production line foodstuffs.

“Because in food companies a lot of food is wasted on their production lines,” explains Gupta. “So that is where we see our technology really helps — reducing that sort of wastage.”

“Basically any visual parameter which needs to be measured that can be done through our technology,” adds Goyal.

They plan to explore potential applications in the food industry over the next 12 months, while focusing on building out their trials and implementations with seed giants. Their target is to have between 40 to 50 companies using their AI system globally within a year’s time, they add.

While the business is revenue-generating now — and “fully self-enabled” as they put it — they are also looking to take in some strategic investment.

“Right now we are in touch with a few investors,” confirms Goyal. “We are looking for strategic investors who have access to agriculture industry or maybe food industry… but at present haven’t raised any amount.”


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‘Software robot’ startup UiPath expands Series C to $265M at a $3B valuation

UiPath, a startup that works in the growing area of RPA, or robotic process automation — where AI-based software is used to help businesses run repetitive or mundane back-office tasks, to free up humans to tackle more sophisticated work — has raised money for the third time this year. The company is today announcing that it has closed out its Series C at $265 million — $40 million higher than the amount it said it was aiming for two months ago.

UiPath is now disclosing new investors in the round — namely, IVP, Madrona Venture Group and Meritech Capital — plus secondary sales for employees to give them liquidity, which made up the difference. The company has confirmed to me that the transactions were done at the same valuation as the rest of the Series C, at $3 billion. The Series C is still led by CapitalG and Sequoia Capital as before.

For some context, earlier this year, the company also raised a Series B of $153 million at a $1.1 billion valuation.

UiPath’s strong valuation hike and the rapid pace of its funding come at a time when both the company and its rivals are all growing quickly, as enterprises rush to capitalise on the rise of artificial intelligence in the workplace. In the case of RPA, the promise is that it will help bring down the cost of doing business and improve organizations’ efficiency. UiPath’s mantra is to provide “one robot for every person,” essentially doubling a company’s workforce without the need to hire more people.

UiPath says that its current annual run rate is now $150 million, up from a $100 million ARR figure it put out just two months ago, with customers now numbering at 2,100 and including the US Army, Defense Logistics Agency, GSA, IRS, NASA, Navy, and the Department of Veterans Affairs. One source at the company tells me that it’s getting approached “almost daily” for more funding at the moment.

At the same time, the competitive landscape is most definitely heating up. We’ve heard that Automation Anywhere, which also just raised money — $250 million — earlier this year, may also be looking to raise more (we’re looking into it). And just earlier this week, we reported that another RPA player, Kofax, acquired a division of Nuance for $400 million to ramp up its image processing business.

“I am honored to have IVP, Madrona Venture Group and Meritech Capital as new investors in UiPath. Their leadership and guidance will no doubt help us continue to define and lead the Automation First era for customers everywhere. UiPath has had many funding options and I believe we have selected the investors that align best with our culture and beliefs. I am humbled as the syndicate of unquestionably top-tier venture capital firms who believe in UiPath and support our future,” said UiPath CEO and co- founder Daniel Dines said in a statement. “Additionally, it is a core UiPath principle to share the success of the company in a meaningful way with our hard-working and long-time employees and we were excited to be able to extend the opportunity, at their personal choice, to realize partial liquidity in this round.”

Updated with clarification about the employee liquidity sales and new investor names.

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Customer service ‘behavioral pairing’ startup Afiniti quietly raised $130M at a $1.6B valuation

Artificial intelligence touches just about every aspect of the tech world these days, aiming to provide new ways of making old processes work better. Now, a startup that has built an AI platform that tackles the ever-present, but never-perfect, business of customer service has quietly raised a large round of funding as it gears up for its next act, an IPO. Afiniti, which uses machine learning and behavioral science to better match customers with customer service agents — “behavioral pairing” is how it describes the process — has closed a $130 million round of funding ($75 million cash, $60 million debt) — a Series D that Afiniti CEO Zia Chishti says values his company at $1.6 billion.

If you are not familiar with the name Afiniti, you might not be alone. The company has been relatively under the radar, in part because it has never made much of an effort to publicise itself, and in part because the funding that it has raised up to now has largely been from outside the hive of VCs that swarm around many other startup deals that push those startups into the limelight.

At the same time, its backers make for a pretty illustrious list. This latest round includes former Verizon CEO Ivan SeidenbergFred Ryan, the CEO and publisher of the Washington Post; and investors Global Asset ManagementThe Resource Group (which Chishti helped found), Zeke Capitalas well as unnamed Australian investors.

The previous Series C round of $26.5 million, also has an interesting list of backers and also was not widely reported. They included McKinsey & Company, Elisabeth Murdoch, former Thomson Reuters CEO Tom Glocer, and former BP CEO John Browne, alongside Global Asset Management, The Resource Group, Seidenberg and Ryan.

That Series C was at a $100 million valuation, meaning that Afiniti’s valuation has increased more than 10 times in the last year on the back of 100 percent revenue growth each year over the last five.

That momentum led the company also to file confidentially for an IPO — although ultimately Chishti told TechCrunch that the company decided to raise privately at the potential IPO valuation since the money was easy to come by. (It’s also been one of the reasons he said he’s also rebuffed acquisitions, although at least one of the companies that’s approached him, McKinsey, now an investor.)

Now, Chishti — who is a repeat entrepreneur, with his previous company, Align Technology (which makes teeth alignment alternatives to braces), now at a $24 billion market cap — said that Afiniti has started to tip into profitability, so it seems the prospect of an IPO might be back on the table. That is possibly one reason that the company has started to speak to the press more and to make itself more visible.

Chishti and Afiniti are based out of the US, but it has roots into a range of local businesses globally in part by way of its well-connected team of advisors and local leaders. Among them, Princess Beatrice (or Beatrice York), currently 8th in line to the throne to succeed Queen Elizabeth, is the company’s vice president of partnerships. Alonso Aznar, the son of the former prime minister of Spain, runs Afiniti’s operations in Madrid.

The company itself sits in the general area of CRM, and specifically among that wave of startups that are trying to build tools using AI and other new technology to improve on the old ways of getting things done (it’s not alone: just today we noted that People.ai raised $30 million for its own AI-based CRM tools).

Afiniti on one hand calls itself a traditional AI company, but on the other, its CEO laments how overused and hackneyed the term has become. “AI is just a bubble,” he said in an interview. “The intensity of interest in AI is unwarranted because nothing has changed. It’s the same algorithms and software, and we just have faster hardware now.”

In actual fact, what Afiniti does is supply an AI layer to a process that is otherwise “ninety-nine percent human”, in the words of Chishti. The company uses AI to analyse sales people’s performance with specific types of calls and situations, and also to analyse customers in terms of their previous interactions with a company. It then matches up customer service reps who it believes will be most compatible with specific customers.

Afiniti’s pricing model has been an important lever for getting its foot in the door with companies. The company does not price its service per-seat or even per-month, but on a calculation between how well the company does when its call routing and running through Afiniti, versus how much is sold when it does not.

“We run systems on for 15 minutes, off for 5 minutes, and we do that perpetually,” Chishti said. It integrates with a company’s CRM, sales and telephony systems at the back end, in order both to route calls but also to track when those calls result in a sale. “We count the revenues, calculate the delta, and we get a share of that delta.”

If that sounds like a tricky measure, it doesn’t to customers, it seems. The zero-cost-to-try-it model is how it has surmounted the hurdle of getting used by a number of large, often slow-moving carriers and other large incumbents. “It means we have to continuously prove our value,” Chishti added.

As one example of how this works out, he used the example of Verizon (which is the owner of TechCrunch, by way of Oath). “Say Verizon makes $120 billion in revenues in a year,” he said, “and $30 billion of that is in phone-based sales. Afiniti would make $600 million on that.” Times that by dozens of customers in 22 countries, and that may point to how the company has quietly reached the valuation that it has.

Beyond its core product, the company has dozens of patents and more in the application phase in the US and other jurisdictions.

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ServiceNow to acquire FriendlyData for its natural language search technology

Enterprise cloud service management company ServiceNow announced today that it will acquire FriendlyData and integrate the startup’s natural language search technology into apps on its Now platform. Founded in 2016, FriendlyData’s natural language query (NLQ) technology enables enterprise customers to build search tools that allow users to ask technical questions even if they don’t know the right jargon.

FriendlyData’s NLQ tech figures out what they are trying to say and then answers with text responses or easy-to-understand data visualizations. ServiceNow said it will integrate FriendlyData’s tech into the Now Platform, which includes apps for IT, human resources, security operations, and customer service management. It will also be available in products for developers and ServiceNow’s partners.

In a statement, Pat Casey, senior vice president of development and operations at ServiceNow, said “ServiceNow is bringing NLQ capabilities to the Now Platform, enabling companies to ask technical questions in plain English and receive direct answers. With this technical enhancement, our goal is to allow anyone to easily make data driven decisions, increasing productivity and driving businesses forward faster.”

The acquisition of FriendlyData is the latest in ServiceNow’s initiative to reduce the friction of support requests within organizations with AI-based tools. For example, it launched a chatbot-building tools called Virtual Agent in May, which enables companies to create custom chatbots for services like Slack or Microsoft Teams to automatically handle routine inquiries such as equipment requests. It also announced the acquisition of Parlo, a chatbot startup, around the same time.

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