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Unveiling its latest cohort, Alchemist announces $4 million in funding for its enterprise accelerator

Published May 16, 2019

The enterprise software and services-focused accelerator Alchemist has raised $4 million in fresh financing from investors BASF and the Qatar Development Bank, just in time for its latest demo day unveiling 20 new companies.

Qatar and BASF join previous investors, including the venture firms Mayfield, Khosla Ventures, Foundation Capital, DFJ and USVP, and corporate investors like Cisco, Siemens and Juniper Networks.

While the roster of successes from Alchemist’s fund isn’t as lengthy as Y Combinator, the accelerator program has launched the likes of the quantum computing upstart Rigetti, the soft-launch developer tool LaunchDarkly and drone startup Matternet .

Some (personal) highlights of the latest cohort include:

Bayware: Helmed by a former head of software-defined networking from Cisco, the company is pitching a tool that makes creating networks in multi-cloud environments as easy as copying and pasting.
MotorCortex.AI: Co-founded by a Stanford engineering professor and a Carnegie Mellon roboticist, the company is using computer vision, machine learning and robotics to create a fruit packer for packaging lines. Starting with avocados, the company is aiming to tackle the entire packaging side of pick and pack in logistics.
Resilio: With claims of a 96% effectiveness rate and $35,000 in annual recurring revenue with another $1 million in the pipeline, Resilio is already seeing companies embrace its mobile app that uses a phone’s camera to track stress levels and application-based prompts on how to lower it, according to Alchemist.
Operant Networks: It’s a long-held belief (of mine) that if computing networks are already irrevocably compromised, the best thing that companies and individuals can do is just encrypt the hell out of their data. Apparently Operant agrees with me. The company is claiming 50% time savings with this approach, and have booked $1.9 million in 2019 as proof, according to Alchemist.
HPC Hub: HPC Hub wants to democratize access to supercomputers by overlaying a virtualization layer and pre-installed software on underutilized super computers to give more companies and researchers easier access to machines… and they’ve booked $92,000 worth of annual recurring revenue.
DinoPlusAI: This chip developer is designing a low latency chip for artificial intelligence applications, reducing latency by 12 times over a competing Nvidia chip, according to the company. DinoPlusAI sees applications for its tech in things like real-time AI markets and autonomous driving. Its team is led by a designer from Cadence and Broadcom and the company already has $8 million in letters of intent signed, according to Alchemist.
Aero Systems West: Co-founders from the Air Force’s Research Labs and MIT are aiming to take humans out of drone operations and maintenance. The company contends that for every hour of flight time, drones require seven hours of maintenance and check ups. Aero Systems aims to reduce that by using remote analytics, self-inspection, autonomous deployment and automated maintenance to take humans out of the drone business.

Watch a live stream of Alchemist’s demo day pitches, starting at 3PM, here.

Algorithmia raises $25M Series B for its AI automation platform

Published May 14, 2019

Algorithmia, a Seattle-based startup that offers a cloud-agnostic AI automation platform for enterprises, today announced a $25 million Series B funding round led by Norwest Partners. Madrona, Gradient Ventures, Work-Bench, Osage University Partners and Rakuten Ventures also participated in this round.

While the company started out five years ago as a marketplace for algorithms, it now mostly focuses on machine learning and helping enterprises take their models into production.

“It’s actually really hard to productionize machine learning models,” Algorithmia CEO Diego Oppenheimer told me. “It’s hard to help data scientists to not deal with data infrastructure but really being able to build out their machine learning and AI muscle.”

To help them, Algorithmia essentially built out a machine learning DevOps platform that allows data scientists to train their models on the platform and with the framework of their choice, bring it to Algorithmia — a platform that has already been blessed by their IT departments — and take it into production.

“Every Fortune 500 CIO has an AI initiative but they are bogged down by the difficulty of managing and deploying ML models,” said Rama Sekhar, a partner at Norwest Venture Partners, who has now joined the company’s board. “Algorithmia is the clear leader in building the tools to manage the complete machine learning life cycle and helping customers unlock value from their R&D investments.”

With the new funding, the company will double down on this focus by investing in product development to solve these issues, but also by building out its team, with a plan to double its headcount over the next year. A year from now, Oppenheimer told me, he hopes that Algorithmia will be a household name for data scientists and, maybe more importantly, their platform of choice for putting their models into production.

“How does Algorithmia succeed? Algorithmia succeeds when our customers are able to deploy AI and ML applications,” Oppenheimer said. “And although there is a ton of excitement around doing this, the fact is that it’s really difficult for companies to do so.”

The company previously raised a $10.5 million Series A round led by Google’s AI fund. It’s customers now include the United Nations, a number of U.S. intelligence agencies and Fortune 500 companies. In total, more than 90,000 engineers and data scientists are now on the platform.

Market map: the 200+ innovative startups transforming affordable housing

Published May 13, 2019

Daniel Wu
Contributor

Dan Wu is a privacy counsel and legal engineer at Immuta. He holds a JD from Harvard University, and is a PhD candidate for Social Policy and Sociology at The Harvard Kennedy School.

Reducing Construction Costs

This is one of the top three challenges developers face, exacerbated by rising building material costs and labor shortages.

Sextech company scorned by CES scores $2M and an apology

Published May 8, 2019

Lora DiCarlo, a startup coupling robotics and sexual health, has $2 million to shove in the Consumer Electronics Show’s face.

The same day the company was set to announce their fundraise, The Consumer Technology Association, the event producer behind CES, decided to re-award the Bend, Oregon-based Lora DiCarlo with the innovation award it had revoked from the company ahead of this year’s big event.

“We appreciate this gesture from the CTA, who have taken an important step in the right direction to remove the stigma and embarrassment around female sexuality,” Lora DiCarlo founder and chief executive officer Lora Haddock (pictured) told TechCrunch. “We hope we can continue to be a catalyst for meaningful changes that makes CES and the consumer tech industry inclusive for all.”

In January, the CTA nullified the award it had granted the business, which is building a hands-free device that uses biomimicry and robotics to help people achieve a blended orgasm by simultaneously stimulating the G spot and the clitoris. Called Osé, the device uses micro-robotic technology to mimic the sensation of a human mouth, tongue and fingers in order to produce a blended orgasm for people with vaginas.

Lora DiCarlo’s debut product, Osé, set to release this fall. The company says the device is currently undergoing changes and may look different upon release.

“CTA did not handle this award properly,” CTA senior vice president of marketing and communications Jean Foster said in a statement released today. “This prompted some important conversations internally and with external advisors and we look forward to taking these learnings to continue to improve the show.”

Lora DiCarlo had applied for the CES Innovation Award back in September. In early October, the CTA notified the company of its award. Fast-forward to October 31, 2018 and CES Projects senior manager Brandon Moffett informed the company they had been disqualified. The press storm that followed only boosted Lora DiCarlo’s reputation, put Haddock at the top of the speakers’ circuit and proved, once again, that sexuality is still taboo at CES and that the gadget show has failed to adapt to the times.

In its original letter to Lora DiCarlo, obtained by TechCrunch, the CTA called the startup’s product “immoral, obscene, indecent, profane or not in keeping with the CTA’s image” and that it did “not fit into any of [its] existing product categories and should not have been accepted” to the awards program. CTA later apologized for the mishap before ultimately re-awarding the prize.

At the request of the CTA, Haddock and her team have been working with the organization to create a more inclusive show and better incorporate both sextech companies and women’s health businesses.

“We were a catalyst to a huge, resounding amount of support from a very large community of people who have been quietly thinking this is something that needs to happen,” Haddock told TechCrunch. “For us, it was all about timing.”

Lora DiCarlo plans to use its infusion of funding, provided by new and existing investors led by the Oregon Opportunity Zone Limited Partnership, to hire ahead of the release of its first product. Pre-orders for the Osé, which will retail for $290, will open this summer with an expected official release this fall.

Haddock said four other devices are in the pipeline, one specifically for clitoral stimulation, another for clitoral and vaginal stimulation, one for anywhere on the body and the other, she said, is a different approach to the way people with vulvas masturbate.

“We are aiming for that hands-free, human experience,” Haddock said. “We wanted to make something really interesting and very different and beautiful.”

Next year, Haddock says they plan to integrate their products with virtual reality, a step that will require a larger boost of capital.

Haddock and her employees don’t plan to quiet down any time soon. With their newfound fame, the team will continue supporting the expanding sextech industry and gender equity within tech generally.

“We’ve realized our social mission is so important,” Haddock said. “Gender equality, at its source, is about sex. We absolutely demonize sex and sexuality … When you talk about removing sexual stigmas, you are also talking about removing gender stigmas and creating gender equity.”

Alibaba-backed facial recognition startup Megvii raises $750 million

Published May 8, 2019

One of China’s most ambitious artificial intelligence startups, Megvii, more commonly known for its facial recognition brand Face++, announced Wednesday that it has raised $750 million in a Series E funding round.

Founded by three graduates from the prestigious Tsinghua University in China, the eight-year-old company specializes in applying its computer vision solutions to a range of use cases such as public security and mobile payment. It competes with its fast-growing Chinese peers, including the world’s most valuable AI startup, SenseTime — also funded by Alibaba — and Sequoia-backed Yitu.

Bloomberg reported in January that Megvii was mulling to raise up to $1 billion through an initial public offering in Hong Kong. The new capital injection lifts the company’s valuation to just north of $4 billion as it gears up for its IPO later this year, sources told Reuters.

China is on track to overtake the United States in AI on various fronts. Buoyed by a handful of mega-rounds, Chinese AI startups accounted for 48 percent of all AI fundings in 2017, surpassing those in the U.S. for the first time, shows data collected by CB Insights. An analysis released in March by the Allen Institute for Artificial Intelligence found that China is rapidly closing in on the U.S. by the amount of AI research papers published and the influence thereof.

A critical caveat to China’s flourishing AI landscape is, as The New York Times and other publications have pointed out, the government’s use of the technology. While facial recognition has helped the police trace missing children and capture suspects, there have been concerns around its use as a surveillance tool.

Megvii’s new funding round arrives just days after a Human Rights Watch report listed it as a technology provider to the Integrated Joint Operations Platform, a police app allegedly used to collect detailed data from a largely Muslim minority group in China’s far west province of Xinjiang. Megvii denied any links to the IJOP database per a Bloomberg report.

Kai-Fu Lee, a world-renowned AI expert and investor who was Google’s former China head, warned that any country in the world has the capacity to abuse AI, adding that China also uses the technology to transform retail, education and urban traffic among other sectors.

China is beating the US on AI, says noted investor Kai-Fu Lee

Megvii has attracted a rank of big-name investors in and outside China to date. Participants in its Series E include Bank of China Group Investment Limited, the central bank’s wholly owned subsidiary focused on investments, and ICBC Asset Management (Global), the offshore investment subsidiary of the Industrial and Commercial Bank of China.

Foreign backers in the round include a wholly owned subsidiary of the Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds, and Australian investment bank Macquarie Group.

Megvii says its fresh proceeds will go toward the commercialization of its AI services, recruitment and global expansion.

China has been exporting its advanced AI technologies to countries around the world. Megvii, according to a report by the South China Morning Post from last June, was in talks to bring its software to Thailand and Malaysia. Last year, Yitu opened its first overseas office in Singapore to deploy its intelligence solutions to partners in Southeast Asia. In a similar fashion, SenseTime landed in Japan by opening an autonomous driving test park this January.

“Megvii is a global AI technology leader and innovator with cutting-edge technologies, a scalable business model and a proven track record of monetization,” read a statement from Andrew Downe, Asia regional head of commodities and global markets at Macquarie Group. “We believe the commercialization of artificial intelligence is a long-term focus and is of great importance.”

As concerns over medical device security rise, MedCrypt raises $5.3 million

Published May 7, 2019

As medical devices move to networked technologies, securing those devices becomes increasingly important.

Regulators, seemingly late to the threat that unsecured medical devices posed, only began requiring protections for medical devices like pacemakers and insulin pumps two years ago, and since then new technology companies have leapt into the breach to begin providing security services for the healthcare industry.

FDA issues new security guidelines so that your pacemaker won’t get hacked

Most recently, MedCrypt, a graduate from the most recent batch of Y Combinator companies, raised $5.3 million in a new round of funding, from investors led by Section 32, the investment firm founded by former Google Ventures partner Bill Maris.

Joining Maris’ firm were previous investors Eniac Ventures and Y Combinator itself.

“Internet-connected medical technology is entering the market at light speed, calling for devices to be secure by design, which leads to a heightened level of patient safety at all times,” said MedCrypt chief executive Mike Kijewski in a statement.

Securing patient data has been a longtime requirement for health technology companies, but both patient records and hospital networks are dangerously vulnerable to cyberattacks.

In 2018, more than 6 million patient records in the U.S. were exposed thanks to network intrusions and cyberattacks, according to the publication Health IT Security. And those were just in the 10 largest security breaches.

The healthcare industry has only managed to achieve 72% compliance with the HIPAA Security Rule for protecting patient data, according to an April report from CynergisTek.

Investors have recognized the problem and are investing more into companies focused on the healthcare market specifically. MedCrypt’s competition for these security dollars include companies like Medigate, which raised $15 million earlier this year.

While Medigate focuses on network security, MedCrypt is focused on securing devices themselves. Both security functions are critical, according to investors.

“With regulators appropriately taking a hard look at medical device security and the sheer growth in the number of devices being added to already complex clinical networks,” there is a significant opportunity for companies tackling medical device security, according to a statement from Dr. Jonathan Root, who has led several IT-enabled healthcare investments for USVP.

Once a major name in smartphones, LG Mobile is now irrelevant — and still losing money

Published May 2, 2019

LG was once a stalwart of the smartphone industry — remember its collaboration with Facebook back in the day? — but today the company is swiftly descending into irrelevance.

The latest proof is LG’s Q1 financials, released this week, which show that its mobile division grossed just KRW 1.51 trillion ($1.34 billion) in sales for the quarter. That’s down 30% year-on-year and the lowest income for LG Mobile for at least the last eight years. We searched back eight years to Q1 2011 — before that LG was hit and miss with releasing specific financial figures for its divisions.

To give an indication of its decline, LG shipped more than 15 million phones in Q4 2015 when its revenue was 3.78 trillion RKW, or $3.26 billion. That’s 2.5 times higher than this recent Q1 2019 period.

Regular readers will be aware that LG mobile is a loss-making division. That’s the reason its activities — and consequently sales — have scaled down in recent years. But the losses are still coming.

LG put Brian Kwon, who leads its lucrative Home Entertainment business, in charge of its mobile division last November and his task remains ongoing, it appears.

LG Mobile recorded a loss of 203.5 billion KRW ($181.05 million) for Q1 which it described as “narrowed.”

It is true that LG Mobile’s Q1 loss is lower than the 322.3 billion KRW ($289.8 million) loss it carded in the previous quarter, but it is wider than one year previous. Indeed, the mobile division lost 136.1 billion KRW ($126.85 million) in Q1 2018.

LG said Mr. Kwon is presiding over “a revised smartphone launch strategy,” which is why the numbers are changing so drastically. Going forward, it said that the launch of its G7 ThinQ flagship phone and a new upgrade center — first announced last year — are in the immediate pipeline, but it is hard to see how any of this will reverse the downward trend.

LG Mobile is increasingly problematic because the parent company is seeing success in other areas, but that’s being countered by a poor-performing smartphone business. Last quarter, mobile dragged LG to its first quarterly loss in two years, for example.

Just looking at the Q1 numbers, LG’s overall profit was 900.6 billion KRW ($801.25 million) thanks to its home appliance business ($647.3 million profit) and that home entertainment business, which had a profit of $308.27 million. Its automotive business — which is, among other things, focused on EVs — did bite into the profits, but that is at least a business that is going places.

The consumer version of BBM is shutting down on May 31

Published April 18, 2019

It might be time to move on from BBM. The consumer version of the BlackBerry Messenger will shut down on May 31. Emtek, the Indonesia-based company that partnered with BlackBerry in 2016, just announced the closure. It’s important to note, BBM will still exist and BlackBerry today revealed a plan to open its enterprise-version of BBM to general consumers.

Starting today, BBM Enterprise will be available through the Google Play Store and eventually from the Apple App Store. The service will be free for one year and after that, $2.49 for six months of service. This version of the software, like the consumer version, still features group chats, voice and video calls and the ability to edit and retract messages.

As explained by BlackBerry, BBMe features end-to-end encryption:

BBMe can be downloaded on any device that uses Android, iOS, Windows or MAC operating systems. The sender and recipient each have unique public/private encryption and signing keys. These keys are generated on the device by a FIPS 140-2 certified cryptographic library and are not controlled by BlackBerry. Each message uses a new symmetric key for message encryption. Additionally, TLS encryption between the device and BlackBerry’s infrastructure protects BBMe messages from eavesdropping or manipulation.

BBM is one of the oldest smartphone messaging services. Research in Motion, BlackBerry’s original name, released the messenger in 2005. It quickly became a selling point for BlackBerry devices. BBM wasn’t perfect and occasionally crashed, but it was a robust, feature-filled messaging app when most of the world was still using SMS. Eventually, with the downfall of RIM and eventually BlackBerry, BBM fell behind iMessage, WhatsApp and other independent messaging platforms. Emtek’s partnership with BlackBerry was supposed to bring the service into the current age, but some say the consumer version ended up bloated with games, channels and ads. BlackBerry’s BBMe lacks a lot of those extra features, so consumers might find it a better platform for communicating.

Acting as the data integrator between hospitals and digital health apps brings Redox $33 million

Published April 17, 2019

Investors have forked over $33 million in a new round of funding for Redox, hoping that the company can execute on its bid to serve as the link between healthcare providers and the technology companies bringing new digital services to market.

The financing comes just two months after Redox sealed a deal with Microsoft to act as the integration partner connecting Microsoft’s Teams product to electronic health records through the Fast Healthcare Interoperability Resources standard.

Redox sits at a critically important crossroads in the modern healthcare industry. Its founder, a former employee at the electronic health record software provider Epic, knows more than most about the central position that data occupies in U.S. healthcare at the moment.

“What we’re doing, we’re building the platform and connector to help health systems integrate with technologies in the cloud,” says chief executive, Luke Bonney.

Bonney served as a team lead in various divisions at Epic before launching Redox, and the Madison, Wis.-based company was crafted with the challenges other vendors faced when trying to integrate with legacy systems like the health record provider.

“The fundamental problem is helping a large health system use a third-party tool that they want to use,” says Bonney. And the biggest obstacle, he said, is finding a way to organize into a format that application developers can work with the data coming from healthcare providers.

Investors including RRE Ventures, Intermountain Ventures and .406 Ventures joined new investor Battery Ventures in financing the $33 million round. As part of the deal, Battery Ventures general partner Chelsea Stoner will take a seat on the company’s board.

Application developers pay for the number of integrations they have with a health system, and Redox enables them to connect through a standard application programming interface, according to the company.

Its approach allows secure messaging across any format associated with an organization’s electronic health record (EHR), the company said.

Redox works with more than 450 healthcare providers and hundreds of application developers, the company said.

High-profile healthcare networks that work with the company include AdventHealth, Atrium Health, Brigham & Women’s, Clarify Health, Cleveland Clinic, Geisinger, HCA, Healthgrades, Intermountain Healthcare, Invitae, Fitbit, Memorial Sloan Kettering, Microsoft, Ochsner, OSF HealthCare, PointClickCare, R1, ResMed, Stryker, UCSF, University of Pennsylvania and WellStar.

Talk all things robotics and AI with TechCrunch writers

Published April 15, 2019

This Thursday, we’ll be hosting our third annual Robotics + AI TechCrunch Sessions event at UC Berkeley’s Zellerbach Hall. The day is packed start-to-finish with intimate discussions on the state of robotics and deep learning with key founders, investors, researchers and technologists.

The event will dig into recent developments in robotics and AI, which startups and companies are driving the market’s growth and how the evolution of these technologies may ultimately play out. In preparation for our event, TechCrunch’s Brian Heater spent time over the last several months visiting some of the top robotics companies in the country. Brian will be on the ground at the event, alongside Lucas Matney, who will also be on the scene. Friday at 11:00 am PT, Brian and Lucas will be sharing with Extra Crunch members (on a conference call) what they saw and what excited them most.

Tune in to find out about what you might have missed and to ask Brian and Lucas anything else robotics, AI or hardware. And want to attend the event in Berkeley this week? It’s not too late to get tickets.

To listen to this and all future conference calls, become a member of Extra Crunch. Learn more and try it for free.