This edition focuses on a week of funding announcements in AI by the investment community.
AI is being applied to cybersecurity in the hopes of countering a new wave of threats, such as malware sourced to the NSA that led to the WannaCry ransomware attack in May.
Cybersecurity Ventures recently issued a projection that cybercrime costs will grow from $3 trillion in 2015 to $6 trillion annually by 2021. The firm’s Cybersecurity Market Report projects spending for cybersecurity products and services in order to mount a defense, is expected to exceed $1 trillion from 2017 to 2021.
Among the new guard is Darktrace, a UK-based cybersecurity firm founded in 2013 that uses machine learning to detect and stop attacks. The startup has raised $75 million, giving it a valuation of $825 million. The company reports it has a total contract value of $200 million, 3,000 global customers and has grown 140 percent in the last year. This round of funding brings the total raised by Darktrace to just under $180 million.
Founded by mathematicians from the University of Cambridge, England, Darktrace touts its “enterprise immune system,” which sits on a company’s network to create “unique behavioral models for every user and device.” This in turn enables the platform to leverage artificial intelligence (AI) to identify patterns, spot subtle changes, and thwart cyberattacks before they happen. The product has a feature called ‘autonomous response’ that takes automatic action to slow or stop the spread of digital attacks.
“We saw sales for autonomous response take off since WannaCry and NotPetya [Petya 2017],” said Nicole Eagan, Darktrace cofounder and CEO, referring to two destructive ransomware attacks that have recently infected businesses worldwide. “Orders started coming in rapidly when those attacks happened,” she told Fortune Magazine.
This latest round, a Series D, was led by Insight Venture Partners. “In just four years, Darktrace has established itself as a world leader in AI-powered security,” said Jeff Horing, Managing Director at Insight Venture Partners. “Insight is proud to partner with Darktrace to continue to drive its strong growth and superior product market fit.”
Darktrace’s headcount has doubled to 500 people in the past year. Eagan said she planned to put the new round of funding primarily toward hiring sales and marketing staff to continue the company’s growth in the Americas and Asia.
New Google fund to support machine intelligence startups
Google is running an investment fund called Gradient Ventures to provide capital, resources and education to AI-first startups. Google has not disclosed the size of the fund, but did say the fund will be run off the firm’s balance sheet, in contrast to GV (formerly Google Ventures), and Capital G, which operate as independent funds of Google.
“As we get busier, it will be separated, but for now we will run off Google’s balance sheet,” Anna Patterson, Google’s VP of engineering and managing partner of Gradient Ventures told TechCrunch in an interview.
Google Ventures has an industry reputation of being a proficient AI investor, regularly bringing in technical talent to help startups. And Google Launchpad, a program to support startups through mentorship, has been hosting events targeting AI companies. It recently held an event for female founders working on AI.
“We have told all folks, including GV, that we are happy to lead and partner,” Patterson added.
Toyota starts an AI investment fund
Toyota is the latest Fortune 500 company to launch an AI-focused venture capital fund, called Toyota AI Ventures. The initial early-stage fund will deploy $100 million and operate as a subsidiary of the Toyota Research Institute. The automaker has strategically positioned itself as an ROI rather than strategic-focused fund — meaning that it aims to profit like any other VC firm.
Jim Adler will serve as managing director of the fund. He has been serving as vice president of Toyota Research and comes from a product background. Adler and the rest of the team at Toyota AI Ventures have made three investments to date. These include:
Nauto — Developing driverless car technology
SLAMcore — Building visual tracking and mapping algorithms
Intuition Robotics — Creating a robot companion for older adults
The team says their strongest value-add is helping startups think about what business problems are worth solving. Toyota Research Institute also brings technical expertise to assist the AI fund with diligence and to help startups make improvements to core technology.
Toyota has structured its fund as a separate company rather than an on-balance-sheet entity to minimize conflicts of interest. The firm expects to follow on and lead both seed and Series A deals.
Running effective corporate venture arms is difficult, and it’s even more difficult when dealing with AI startups. The capital-saturated AI startup ecosystem needs data, genuine corporate customers and advisers with product expertise, wrote John Mannes of TechCrunch about the Toyota effort.
Intuition Raises $14M from Toyota Research
Intuition Robotics, maker of the ElliQ robotic elder care assistant, has raised an additional $14 million from Toyota Research Institute, to help grow staff and product.
ElliQ, which the company likes to call an “active aging companion,” is made up of an interactive robot attached to a tablet, and is designed to help older adults stay in their homes. The robot was built to keep the elderly engaged, active, and connected to the outside world. It does this by supporting video chat and by acting as a companion, such as by suggesting activities and issuing reminders about when to take medications.
Intuition Robotics recently entered the initial testing phase of the companion robot with users in the Bay Area, and is actively hiring a team. With those plans underway, the company was looking to add more funding and expertise.
According to Intuition Robotics CEO Dor Skuler, Toyota approached the robotics company after learning what it was working on and immediately provided value by helping to replace some motors in the ElliQ prototype.
“At this stage of the product, we do need help, and it’s very refreshing to be approached by an investor that has studied this space and has some expertise,” Skuler told TechCrunch.
The new funding follows $6 million that Intuition Robotics raised from investors that include Roomba maker iRobot, Terra Venture Partners, Bloomberg Beta and Maniv Mobility. The company also raised money through crowdfunding platform OurCrowd.
This AI Investment fund funnels money into ethics
A $27 million fund aimed at applying artificial intelligence to the public interest has announced the first targets for its beneficence: $7.6 million to nine organizations that aim to bolster the voice of civil society in shaping the development of AI in the public interest. The funding seeks to lend momentum to existing initiatives and spark new efforts internationally.
“Artificial intelligence will affect every aspect of modern life,” said Alberto Ibargüen, president of the John S. and James L. Knight Foundation. “The issues of ethics and governance of new and pervasive technology are complex and profound, and the work must not only involve technologists. This initial round of support, focused on the three areas of media, criminal justice and autonomous vehicles, is just a beginning.”
The Ethics and Governance of Artificial Intelligence Fund was launched in January 2017 with initial support of $27 million from Knight Foundation, Omidyar Network, LinkedIn founder Reid Hoffman, the William and Flora Hewlett Foundation and Jim Pallotta.
Foundational to this initial round of funding is $5.9 million in support to the Berkman Klein Center for Internet & Society at Harvard University and the Massachusetts Institute of Technology (MIT) Media Lab. These two institutions serve as the fund’s anchor institutions, operating as a primary base of activity in advancing the goals of the effort.
The funding will be used to support work in three initial core areas: media and information quality; social and criminal justice; and autonomous vehicles. Projects will address familiar challenges in these core areas such as the global governance of artificial intelligence, and the ways in which the use of artificial intelligence may reinforce existing biases, particularly against underserved and underrepresented populations.
“This grant fuels continued collaboration between Berkman Klein and the Media Lab as we join others in breaking down the silos between technical research, public policy and law, and the social sciences in the machine learning space,” said Joi Ito, director of the MIT Media Lab. “This will include research on society’s expectations for AI, efforts to engage the public on the governance of AI, and our work to bring industry into dialogue with the academy with efforts that will ultimately deploy working projects and systems.”
The fund is also announcing $1.7 million in support to seven organizations which will complement the skills and expertise of the anchor institutions
On the research side, AI Now will be looking at bias in data collection and healthcare; the Leverhulme Center will be looking at interpretability of AI-related data; Data & Society will be conducting “ethnographically-informed” studies on the human element of AI and data — for example, how demographic imbalances in who runs real estate businesses might inform the systems they create and use.
“For this initial cohort, we looked for projects that fit our goal of building networks across fields, and that would complement the work of our ‘anchor’ partners at the Media Lab and Berkman Klein,” Knight’s VP of Technology and Innovation, John Bracken, told TechCrunch.
“We think it’s vital that civil society has a strong voice in the development of artificial intelligence and machine learning. We see these projects as part of a growing set of researchers, engineers, and policymakers who will be part of ensuring that these new tools are developed ethically.”
Josh.ai raises $11M to build smarter home automation
Amazon, Google and Apple are going after the smart home automation market with their own voice assistants and smart speakers. And now a startup has joined the fray. Josh.ai has raised $11 million to design a better voice-controlled system for smart homes. Later this year, the company will release its own smart home dedicated hardware.
Headquartered in Denver with offices in L.A., Josh.ai is the product of serial entrepreneurs Alex Capecelatro, CEO, and Tim Gill, CTO. The two previously worked together on a social recommendations app Yeti, which had begun its life as At The Pool, and was sold back in 2015. Gill, who had previously founded and sold Quark (Quark XPress), had joined Yeti as a technical advisor, and wrote many of the algorithms used in the app.
The founders saw a need in the market for something that sits above mass-market solutions, like Apple’s Home app, or Alexa’s smart home control, which focus more on tying together after-market devices, like security cameras, smart doorbells, or smart lights like Philips Hue.
They founded the startup Josh.ai in March 2015, and shipped the first product the following year.
The solution, as it exists today, includes a kit with a Mac mini and iPad, and software that runs the home. After plugging in the Mac, Josh.ai auto-discovers devices on the network. It can identify those from over 50 manufacturers. For example, it can control lighting and shades like those from Lutron, music systems like Sonos, dozens of brands of security cameras, Nest thermostats, Samsung smart TVs, and even more niche products like Global Caché’s box for controlling IR devices (such as your “not-so-smart” TVs).
The current system, largely designed for high-end homes, is sold by professional integrators for approximately $10,000 and up, depending on the components involved. To date, the team has sold more than 50 and fewer than 100 installations.
Josh.ai, a team of 15 soon to be 25, recently closed on $8 million in new funding, largely from the founders’ personal networks. The investors’ names aren’t being disclosed because they’re not institutional firms. To date, Josh.ai has raised $11 million, but has not yet added anyone to its board.
Flippy maker gets $3.1M to fund AI-driven robot kitchen assistant
Miso Robotics, offering robotics and AI products, has secured $3.1 million in funding from Acacia Research Corporation, Match Robotics VC, and undisclosed strategic investors. Miso will use the funding to deliver ‘Flippy,’ its first commercial product. Flippy is an adaptable AI-driven robotic kitchen assistant that will work alongside kitchen staff to improve operational efficiency for the restaurant industry. The first installation of Flippy will be in CaliBurger’s Los Angeles area location. The investment in Miso represents Acacia’s second investment in companies seeking to transform the marketplace through Artificial Intelligence.
Miso also announced it has entered into an IP services agreement with Acacia Research to drive AI-based solutions for the entire restaurant industry. “Acacia’s expertise in intellectual property and its leadership in the emerging AI space will help Miso achieve our vision of bringing innovative technology to the often-overlooked restaurant industry,” said David Zito, co-founder and CEO of Miso Robotics.
Zito continued, “Miso is transforming the restaurant industry, and we will continue to grow our team of roboticists and AI experts, deepening our collaborative ties with the Caltech community and deliver our adaptable AI-solutions for our first restaurant customers. We are excited about the impact Miso’s AI-based solutions will have for the restaurant industry.”
Acacia Research President Rob Stewart commented, “We’re impressed with Miso’s talented team of industry veterans and their category-leading AI technology that makes them well positioned to take advantage of the considerable market opportunity in the restaurant industry.”
Miso Robotics received worldwide attention following the debut of its AI-driven robotic kitchen assistant that will work alongside kitchen staff to grill burgers, starting with CaliBurger restaurants. Miso Robotics plans to roll out its AI-driven robotic kitchen assistant in early 2018 and expand to more than 50 CaliBurger restaurants worldwide by the end of 2019.
- Compiled by John P. Desmond, AI Trends Editor