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Peak raises $75M for a platform that helps non-tech companies build AI applications
As artificial intelligence continues to weave its way into more enterprise applications, a startup that has built a platform to help businesses, especially non-tech organizations, build more customized AI decision-making tools for themselves has picked up some significant growth funding. Peak AI, a startup out of Manchester, England, that has built a “decision intelligence” platform, has raised $75 million, money that it will be using to continue building out its platform, expand into new markets and hire some 200 new people in the coming quarters.
The Series C is bringing a very big name investor on board. It is being led by SoftBank Vision Fund 2, with previous backers Oxx, MMC Ventures, Praetura Ventures and Arete also participating. That group participated in Peak’s Series B of $21 million, which only closed in February of this year. The company has now raised $119 million; it is not disclosing its valuation.
(This latest funding round was rumored last week, although it was not confirmed at the time and the total amount was not accurate.)
Richard Potter, Peak’s CEO, said the rapid follow-on in funding was based on inbound interest, in part because of how the company has been doing.
Peak’s so-called Decision Intelligence platform is used by retailers, brands, manufacturers and others to help monitor stock levels and build personalized customer experiences, as well as other processes that can stand to have some degree of automation to work more efficiently, but also require sophistication to be able to measure different factors against each other to provide more intelligent insights. Its current customer list includes the likes of Nike, Pepsico, KFC, Molson Coors, Marshalls, Asos and Speedy, and in the last 12 months revenues have more than doubled.
The opportunity that Peak is addressing goes a little like this: AI has become a cornerstone of many of the most advanced IT applications and business processes of our time, but if you are an organization — and specifically one not built around technology — your access to AI and how you might use it will come by way of applications built by others, not necessarily tailored to you, and the costs of building more tailored solutions can often be prohibitively high. Peak claims that those using its tools have seen revenues on average rise 5%, return on ad spend double, supply chain costs reduce by 5% and inventory holdings (a big cost for companies) reduce by 12%.
Peak’s platform, I should point out, is not exactly a “no-code” approach to solving that problem — not yet at least: It’s aimed at data scientists and engineers at those organizations so that they can easily identify different processes in their operations where they might benefit from AI tools, and to build those out with relatively little heavy lifting.
There have also been different market factors that have played a role. COVID-19, for example, and the boost that we have seen both in increasing “digital transformation” in businesses and making e-commerce processes more efficient to cater to rising consumer demand and more strained supply chains have all led to businesses being more open and keen to invest in more tools to improve their automation intelligently.
This, combined with Peak AI’s growing revenues, is part of what interested SoftBank. The investor has been long on AI for a while; but it also has been building out a section of its investment portfolio to provide strategic services to the kinds of businesses in which it invests.
Those include e-commerce and other consumer-facing businesses, which make up one of the main segments of Peak’s customer base.
Notably, one of its recent investments specifically in that space was made earlier this year, also in Manchester, when it took a $730 million stake (with potentially $1.6 billion more down the line) in The Hut Group, which builds software for and runs D2C businesses.
“In Peak we have a partner with a shared vision that the future enterprise will run on a centralized AI software platform capable of optimizing entire value chains,” Max Ohrstrand, senior investor for SoftBank Investment Advisers, said in a statement. “To realize this a new breed of platform is needed and we’re hugely impressed with what Richard and the excellent team have built at Peak. We’re delighted to be supporting them on their way to becoming the category-defining, global leader in Decision Intelligence.”
It’s not clear that SoftBank’s two Manchester interests will be working together, but it’s an interesting synergy if they do, and most of all highlights one of the firm’s areas of interest.
Longer term, it will be interesting to see how and if Peak evolves to extend its platform to a wider set of users at the organizations that are already its customers.
Potter said he believes that “those with technical predispositions” will be the most likely users of its products in the near and medium term. You might assume that would cut out, for example, marketing managers, although the general trend in a lot of software tools has precisely been to build versions of the same tools used by data scientists for these less technical people to engage in the process of building what it is that they want to use.
“I do think it’s important to democratize the ability to stream data pipelines, and to be able to optimize those to work in applications,” Potter added.
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The Not Company, a maker of plant-based meat and dairy substitutes in Chile, will soon be worth $250M
The Not Company, Latin America’s leading contender in the plant-based meat and dairy substitute market, is about to close on an $85 million round of funding that would value it at $250 million, according to sources familiar with the company’s plans.
The latest round of funding comes on the heels of a series of successes for the Santiago-based business. In the two years since NotCo launched on the global stage, the company has expanded beyond its mayonnaise product into milk, ice cream and hamburgers. Other products, including a chicken meat substitute, are also on the product roadmap, according to people familiar with the company.
NotCo is already selling several products in Chile, Argentina and Latin America’s largest market — Brazil — and has signed a blockbuster deal with Burger King to be the chain’s supplier of plant-based burgers. It’s in this Burger King deal that NotCo’s approach to protein formulation is paying dividends, sources said. The company is responsible for selling 48 sandwiches per store per day in the locations where it’s supplying its products, according to one person familiar with the data. That figure outperforms Impossible Foods per-store sales, the person said.
NotCo is also now selling its burgers in grocery stores in Argentina and Chile. And while the company is not break-even yet, sources said that by December 2021 it could be — or potentially even cash flow positive.
NotCo co-founders Karim Pichara, Matias Muchnick and Pablo Zamora. Image Credit: The Not Company
With the growth both in sales and its diversification into new products, it’s little wonder that investors have taken note.
Sources said that the consumer brand-focused private equity firm L Catterton Partners and the Biz Stone-backed Future Positive were likely investors in the new financing round for the company. Previous investors in NotCo include Bezos Expeditions, the personal investment firm of Amazon founder Jeff Bezos; the London-based CPG investment firm, The Craftory; IndieBio; and SOS Ventures.
Alternatives to animal products are a huge (and still growing) category for venture investors. Earlier this month Perfect Day closed on a second tranche of $160 million for that company’s latest round of financing, bringing that company’s total capital raised to $361.5 million, according to Crunchbase. Perfect Day then turned around and launched a consumer food business called the Urgent Company.
These recent rounds confirm our reporting in Extra Crunch about where investors are focusing their time as they try to create a more sustainable future for the food industry. Read more about the path they’re charting.
Meanwhile, large food chains continue to experiment with plant-based menu items and push even further afield into cell-based meat using cultures from animals. KFC recently announced that it would be expanding its experiment with Beyond Meat’s chicken substitute in the U.S. — and would also be experimenting with cultured meat in Moscow.
Behind all of this activity is an acknowledgement that consumer tastes are changing, interest in plant-based diets are growing, and animal agriculture is having profound effects on the world’s climate.
As the website ClimateNexus notes, animal agriculture is the second-largest contributor to human-made greenhouse gas emissions after fossil fuels. It’s also a leading cause of deforestation, water and air pollution and biodiversity loss.
There are 70 billion animals raised annually for human consumption, which occupy one-third of the planet’s arable and habitable land surface, and consume 16% of the world’s freshwater supply. Reducing meat consumption in the world’s diet could have huge implications for reducing greenhouse gas emissions. If Americans were to replace beef with plant-based substitutes, some studies suggest it would reduce emissions by 1,911 pounds of carbon dioxide.
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Alpha Foods raises $28 million for its vegetarian prepared foods
Alpha Foods, the vegetarian prepared food manufacturer, has raised $28 million in financing for its portfolio of vegetarian burritos, tamales, nuggets, pizzas, burgers, patties and sausages.
The Glendale, Calif.-based company was launched by Loren Wallis, the founder of the dairy substitute, Good Karma Foods, and Cole Orobetz, a former director with the agricultural debt lending firm Avrio Capital.
First launched in 2015, Alpha Foods previously raised $12 million in financing from investment firms like New Crop Capital and AccelFoods, whose other brands include Kite Hill, Good Catch, BRAMi and Evoke Healthy Foods.
As more Americans move to supplement their diets with plant-based products, companies like Alpha Foods have found willing investors for new food brands. The company’s new round was led by AccelFoods, with existing investors, including New Crop Capital, Green Monday Ventures and Blue Horizon, also participating.
Companies like Alpha compete with huge consumer packaged goods companies like Kellogg’s (through its Morningstar Farms line of vegetarian products) and Nestlé (through Sweet Earth Foods).
While the Morningstar Farms brand might seem a bit stale, the market has been reinvigorated through the marketing muscle and venture dollars supplied by companies like Beyond Meat and Impossible Foods, whose products have captured contracts from some of the world’s biggest fast food chains — including McDonald’s, KFC and Burger King.
Alpha Foods said it will use the latest money to launch new products, make new hires and expand its distribution channels nationally and internationally.
The company is already sold in well over 9,000 stores at chains including Wegmans, Walmart, Kroger and Publix.
“As more and more people actively seek out plant-based options, whether for their health or the environment, we are looking to expand our innovations within the category and bring easy to prepare products to a wider audience,” said Cole Orobetz, co-founder and president of Alpha Foods, in a statement.
The sale of pre-prepared plant-based meals reached $387 million in 2019, up 6% over the past year, according to data from the Good Food Institute.
“We are in the early days of plant-based consumption. As a portable, functional food business geared towards the newly emergent flexitarian consumer, the Alpha platform meets all of its customers’ snack and mealtime needs,” said AccelFoods Managing Partner Jordan Gaspar. “We couldn’t be prouder to lead this strong nexus of collaborative investors, who had the opportunity to organically build trust this past year allowing for an incredibly successful outcome in this financing.”
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