Enterprise Tech Investment: Follow The Money with James Cunial
5 July, 2023
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Join NEXTGEN Group CTO and strategist James Cunial as he dives into the febrile world of Enterprise Tech investment to find out what the smartest investors on the planet are getting excited about.
From zero to circa $6.5B in a few days. That's how quickly things can change. We haven't seen many tech acquisitions in the last few month and all of sudden the cash bags are out.
IBMacquires Apptiofor ~$5B.Vista Equity Partners have done somewhat well out of that considering they spent <$2B acquiring Apptio only 5 years ago! An exceedingly strong value proposition as more and more customers migrate to the #cloud. Big money still around for non-AI Enterprise tech.
Databricksacquires MosaicMLfor a cool $1.3B. This looks like a smart move bringing the model makers right next to the data for the AI revolution. Surely this won't be the last acquisition with this strategy in 2023.
And lastly, ThoughtSpot acquires Mode Analytics for $200M to bolster their existing BI and Analytics GTM with further Generative AI capability.
From a funding perspective in the enterprise tech space a focus on data, DevOps and AI this past week:
Acryl Dataraised $21M in series A. Data catalogue platform consolidating fragmented enterprise data including governance and observability.
Renderraises $50M in Series B. A simplified all-in-one/in-a-box cloud for deploying or running enterprise tech stacks.
Parrot AIraises $11M in a series A to help businesses transform voice to text and then organise that data all with AI.
BentoML raises $9M for a simplified platform for devs to build AI products.
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CHAPTER 8: 26 June 2023
Something I've been mulling over lately is the apparent downturn in cybersecurity startup funding over the last few months. My initial thought was this was due to the AI revolution, and the attention this would obviously get from those with the money.
I still hold this view, however, a discussion with Brian Wilcoxfrom Cleveland Research Company this morning also highlighted a point I missed around the macroeconomic climate and pressure from the CFO to consolidate vendors, meaning best-of-breed and emerging tech get deprioritised and thus the funding slows down.
Like many things, obvious once it's articulated to you in simple terms. Brian believes this will start to ease towards the end of 2023 and into 2024.
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CHAPTER 7: 21 June 2023
AI, AI and more AI funding over the last 7 days in Enterprise tech. No surprise here. At a high level over the last month, I've noticed most of the funding for enterprise-focused AI is going into two broad categories:
1. Technology that enables AI. 2. Technology that enables software builders to leverage AI.
I suppose there will be a bit of a lag between the current investments going into these enablers and the future technologies we will see enabled by them. We're already seeing mountains of these capabilities getting released by established vendors, but it's the new ones yet to be born that will change the game. Similar to how we say "born in the cloud" today to distinguish tech, I expect the same wave of innovation will look at today's incumbents trying to adapt and not have the technical frameworks and data models underlying their IP to leverage AI properly. Exciting times ahead. Below are three companies receiving funding in the last 7 days:
Striveworksraised a $33M Funding round. Looks like they streamline AI/ML technology releases into the enterprise and software dev cycle i.e. AI/MLOps.
Deepchecksraised $14M in a seed round. They help data teams continuously validate and monitor their ML-based systems.
And last but not least, Synthesia raised $90M in a series C round. They help organisations create AI-generated videos for things like training, onboarding, sales and marketing etc. Interesting idea considering the research around heightened engagement with video-based content.
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CHAPTER 6: 15 June 2023
Looking at the enterprise software funding over the last week there is a nice trend of Amazon Web Services (AWS)ecosystem investments, of course with AI peppered throughout. Seems the last month has been very quiet on the cybersecurity front in terms of funding - Would be keen to hear any thoughts or start-ups I may have missed in this space?
Looking at where the money has been flowing over the last week:
Hovering around the AWS ecosystem we have Granicawho is targeting customers looking to invest in AI and the challenges and costs this will bring around storing, accessing and moving considerable amounts of data in the cloud. Great value proposition for the near future and the massive $45M Series A seems to show the investors like what they see. On a slightly different note CloudZero raised $32M in Series B. I'd be very keen to look at this cloud cost optimisation platform as have seen quite a few over the last few years in this space and curious to see what the differentiator is.
AI again attracting huge funding over the last week (surprise, surprise). Cohere raised a massive $270M in Series C backed by some industry heavy weights like Oracleand NVIDIA. This is another massive round looking at the opportunity for LLMS and Generative AI into the enterprise product space. Seems to be along a similar path to Anthropic from a few weeks ago. Both with HUGE rounds. Another this week in a similar space is Contextual AI, who came out of stealth with a $20M seed found. Again, focusing on giving the power of LLMs, Generate AI into product teams within the Enterprise Space.
Looking at slightly different area of enterprise software Digibeeraised $60M in Series B. This is an IPaaS platform focusing on complex enterprise applications. Big round for what I thought was a fairly crowded space, perhaps its the "enterprise" value prop and surrounding capability that sets it apart?
Research is showing that funding amounts are overall down in the current market due to macroeconomic conditions. Though we're still seeing a lot of money flowing to AI. I'm sure over the next 12 months things will really start to open up again as broader AI use cases feed into the start-up ecosystem. Very exciting times!
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CHAPTER 5: 7 June 2023
Another week of Enterprise tech funding leaning heavily towards #AI is just another signal that the next industrial revolution is well upon us.
Hyro, a company dedicated to improving chatbot and IVR systems with powerful conversational AI, recently secured a $20M Series B. Seems to be dozens of these getting funding at the moment, plenty of consolidation and acquisitions to occur in this space in the near future.
CoreWeave, a specialised cloud provider offering large-scale GPU compute resources on top of a highly flexible infrastructure, raised $200M. In total the company has raised $571 million. That's some serious funding, however, that level of capital is important when you're up against AWS, GCP and Azure in the GPUaaS space!
In another cloudy round Cortex, a developer of visibility, automation and orchestration software focusing on DevOps alignment, raised $35M in a Series B funding.
Still a little quiet on the Cyber security front.
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