I’d love to say M&A activity is picking up but the only activity that actually seems to be up is tech layoffs, with a some deals being called off as well. Overall, fewer sizable transactions to report in the last third of January. Here goes –
Databricks
Databricks CEO Ali Ghodsi has been quite active, I’d even say aggressive, in his M&A strategy, considering the firm remains privately funded. Earlier this week, Databricks announced the acquisition of data intelligence platform Einblick. The acquired technology allows users to convert natural language instructions into data workflows. In my opinion, the use of natural language to accomplish every day tasks in practically every white-collar profession is the base case for the impact of Generative AI over the next decade. Helping data analysts do their work more efficiently is an obvious, near-term goal that Databricks is clearly pursuing. This acquisition marks the fourth in a series by Databricks in the last 12 months, following the acquisitions of data replicator Arcion, generative AI platform Mosiac ML, and data governance platform Okera.
Einblick received $6 million in seed funding and participated in Intel’s accelerator program. The firm was co-founded by Tim Kraska, currently a professor at MIT and previously a student at Berkeley with Ghodsi. For further reading, check out Einblick’s pitch deck here.
Databricks also announced a venture investment in data quality platform and long-term partner Anamalo through its latest round of funding. Anamalo raised a total of $33 mm in a Series B round led by SignalFire. Previous investors Norwest, Two Sigma Ventures and Foundation Capitalparticipated. The firm has raised a total of $72 mm over three rounds of funding.
Codeium
Codeium, an AI tool provider for software developers, has raised $65 mm in a Series B funding round led by Kleiner Perkins, with participation from Greenoaks and General Catalyst. Codeium’s platform offers intelligent code suggestions within the context of a developer’s code base. The company claims over 300,000 developers and several Fortune 500 companies as users of its platform. The company leverages proprietary AI models to enhance developer productivity, supporting over 70 languages working across more than 40 Integrated Developer Environments (IDEs). The funds from the Series B round will be used to expand Codeium’s sales and engineering teams and further integrate AI into various aspects of the software development lifecycle.
AI powered code generation is a very crowded field with dozens of options including tons of open source ones. I don’t know what differentiates Codeium but the $65 mm at a $500 mm valuation from top-tier VCs is a good signal. We’ll keep an eye on this one. Co-founder and CEO Varun Mohantalks about the capital raise and his vision for the firm in the video below.
Kore.ai
Enterprise conversational platform Kore.ai scored a $150 mm investment led by FTV Capital, with participation from NVIDIA Ventures, Kore.ai provides a no-code platform for conversational and generative AI applications in the Enterprise.
According to Gartner, the conversational AI market is expected to reach $377 billion in revenue by 2032, up from $66 billion in 2023. Kore.ai‘s platform enables companies of all sizes to safely and responsibly harness the power of generative AI amidst rapid growth and disruption due to advancements in technology and changing user expectations
Kore.ai‘s platform offers purpose-built workflows, configurable tools, and a flexible architecture that allows enterprise teams to craft custom solutions or deploy pre-built, domain-specific virtual assistants across multiple industries and functional roles.
Kore.ai seems to be a poster child for the growth in enterprise conversational AI with triple-digit year-over-year growth in revenues and new Global 2000 enterprise customers across major verticals. The company automates 450 million interactions per day for over 200 million consumers and two million enterprise users worldwide, with rising demand from emerging markets in Asia Pacific, Europe, Latin America, and the Middle East.
Kore.aiis a leader in Gartner’s MQ for Enterprise Conversational AI Platforms –
Torq
Torq, a Tel Aviv and Portland based cybersecurity hyperautomation firm, has added $42 million to its Series B funding initially announced in late 2021. The firm has now raised a total of $120 million. Investors include Insight Partners, Bessemer Venture Partners and GGV Capital.
Torq’s platform allows IT teams to create and deploy security workflows integrated with existing cybersecurity infrastructure. The company utilizes generative AI, specifically large language models to analyze and comprehend questions related to SOC playbooks. The platform aims to provide meaningful analysis of security signals while keeping the cost of investigation under control. Interestingly, Torq seems to be leveraging LLMs like GPT-4 rather than deploying its own models.
Torq has seen significant growth in its revenue and customer base, reporting 300% revenue growth and 500% customer growth in 2023. The company has signed major new clients including Blackstone, Rivian, Telefonica, and ZoomInfo.
Automation for SOC’s is an area of meaningful interest with both startups like Nexusflow and behemoths like Microsoft and Googleworking on solutions.
Prompt Security and Aim Security
I didn’t set out to cover just Gen AI in this edition of InfraRead but such is the market we are in right now.
Aim Security and Prompt Security, both out of Israel, announced initial rounds of funding over the last week. The firms have a very similar value proposition, that of securing generative AI interactions within enterprise environments. Aim Security recently raised $10 mm in a seed round led by YL Ventures. The company aims to take a holistic approach to Gen AI security, focusing on preventing data leakage and ensuring responsible usage by employees and developers. It offers a platform that integrates with existing security solutions and includes a lightweight browser extension to monitor and control Gen AI tools’ usage, providing companies with visibility and control over sensitive data.
Prompt Security, emerging from stealth mode, secured $5 million in a seed round led by Hetz Ventures. The startup focuses on addressing security concerns related to Gen AI usage, such as data leakage and privacy issues. Prompt Security’s platform provides a browser extension and IDE plugin to automatically detect patterns related to Gen AI usage, enforcing policies to prevent data leaks and unauthorized access.
End Notes
Amazon has called off its planned acquisition of iRobot citing regulatory challenges. Following Amazon’s decision not to pursue the deal, iRobot announced it would lay off 350 employees, about 30% of its workforce. Founder and CEO Colin Angle has announced he will be leaving the companyas well.
UPS announced plans to lay off 12,000 employees following a tough year as it seeks to re-align resources and save up to $1 billion in costs. Revenue for the logistics behemoth was down by $9 billionin 2023. UPS has more than 500,000 employees across 200 countries and territories.
Payment providers PayPal and Blockyesterday announced workforce reductions. PayPal plans to cut its workforce by 9% in 2024, affecting around 2,500 employees out of its approximately 27,800-strong workforce as of the end of 2023. Block has reportedly laid off hundreds of employees, part of its previously stated intention to cut around 1,000 jobs (around 8% of its workforce) by the end of the year. At the end of the third quarter, Block had about 13,000 employees.
My day job is advising growing companies on fundraising and M&A. If you are an investor or entrepreneur I’d love to connect.