EYE ON A.I. GETS READERS UP TO DATE ON THE MOST CRITICAL FUNDING, CORPORATE AND REGULATORY NEWS WITH ORIGINAL CONTENT AND MEDIA REPORTS FROM AROUND THE GLOBE.

This week we kick off our corporate finance newsletter with an interview with Thomvest Ventures on differentiating between AI companies.

Next up is half a dozen mergers and acquisitions, nine equity filings, 14 funding rounds, a handful of government moves on AI and 23 executive hires.

Companies we have tracked over the past year or so in the news this week include Waystar, Verisk, Kustomer, May Mobility, AU10TIX, Rebel, Soteria AI, SparkCognition, Alation, insitro, Simon Data, Crosschq, Cannabics Pharmaceuticals and Eightfold.ai

See all of this and more below ↓

Our Interview with Thomvest Ventures

Investments in AI driven startups require a multi-step due diligence process to separate standout companies from those paying lip service to the technology, says Umesh Padval, partner at family office Thomvest.

Technology, customers and its corporate network all have an equally critical role to play when the USD 500m fund is considering making a bet on a startup.

“When you look at a company’s background in technology and computer science [within the] first ten minutes of people talking that’s when you know the big boys from the kids,” says Padval, who oversees the cybersecurity and cloud technology portfolio at the fund.

While he and the fund will road test any technology a potential portfolio company has developed, Padval values the input from customers the fund knows through their past and existing investment network even more.

Read more

MERGERS AND ACQUISITIONS

Waystar, the Louisville, Kentucky-based business services firm focused on healthcare using AI, said it acquired Recondo Technology, an AI-backed business services firm.

Waystar was acquired by EQT VIII Fund and Canada Pension Plan Investment Board in August. In July Waystar acquired Digitize.AI, which uses AI to automate interactions with insurance firms.

Brainshark, the Waltham, Massachusetts-based business services firm using AI, said it acquired Rekener, another business services firm.

Frontdoor, the Memphis, Tennessee-based home security and services company, said it acquired Streem, which uses AR and machine learning to augment home repair services.

Movement Industries, the Houston, Texas-based investment firm focused on energy, said it is in talks to acquire an unspecified AI platform. The company also said it completed the acquisition of chip design firm SGX Industrial. Movement was previously called Vision Healthcare.

Zywave, the Milwaukee, Wisconsin-based insurance technology firm using machine learning, said it acquired miEdge, the data analytics firm using machine learning.

Verisk, the New Jersey City-based data analytics firm using machine learning, said it acquired Fast. Verisk in October said it was acquiring BuildFax.

FILINGS

Bill.com, the Palo Alto, California-based financial services platform for small and medium sized businesses using AI, said it is raising as much as USD 159m from an initial public offering of 8.8m shares at USD 16 to USD 18 each on the NYSE.

Sprout Social, the Chicago, Illinois-based marketing firm using machine learning, said it is raising as much as USD 158m from an initial public offering of 8.8m shares at USD 16 to USD 18 each. The shares will trade on the Nasdaq and feature a dual-class shareholding.

EHang, the Guangzhou, China-based company developing autonomous air taxis, said it is raising USD 46m in an initial public offering of 3.2m American depositary shares at USD 12.50 to USD 14.50 each. Each ADS, which will trade on the Nasdaq, represents two shares.

XP, the Sao Paulo, Brazil-based financial services platform using AI, said it and shareholders are raising as much as USD 1.8bn from an initial public offering of 72.5m shares at USD 22 to USD 25 each on the Nasdaq.

Molecular Data, the Shanghai, China-based chemical industry services platform using AI, said it is raising a placeholder USD 70m in an initial public offering on the Nasdaq.

Clarivate Analytics, the London, UK-based data company using AI, said shareholders were selling 43.2m shares worth USD 758m at the time of the filing. The company trades on the NYSE.

In September the company said shareholders were selling 34.5m shares worth USD 608m at the time of the filing.

Dynatrace, the Waltham, Massachusetts-based AI company, said shareholders, including private equity firm Thoma Bravo, were selling 27.5m shares worth USD 690m at the time of the filing.

In August, the company and shareholders raised USD 569.76m from an initial public offering of 35.61m shares at USD 16 each, almost twice the amount the deal was originally set for, on the NYSE.

Other deals include Next Step Robotics and Parallax Health Services

FUNDING

Gong, the San Francisco, California-based business services firm using AI, said it raised USD 65m in a Series C led by Sequoia Capital. A venture capital unit of technology giant Cisco also participated.

Kustomer, the New York City-based business services platform using AI, said it raised USD 60m in a Series E funding round led by Coatue. Kustomer raised USD 40m in a Series D in June, according to a FinSMEs report.

May Mobility, the Ann Arbor, Michigan-based autonomous vehicle maker, said it raised USD 50m in a Series B round led by Toyota, the Japanese car maker.

In February, May Mobility raised USD 22m in a Series A led by Millennium New Horizons and Cyrus Capital Partners. May Mobility is backed by the venture capital arms of global car makers that include BMW and Toyota.

Flow, the Hoboken, New Jersey-based e-commerce services firm using AI, said it raised USD 37m in Series B funding from New Enterprise Associates, the venture capital arm of financial services firm American Express and Latitude Ventures.

AU10TIX, the Nicosia, Cyprus-based ID verification and authentication platform using machine learning, said it raised USD 20m in a funding round led by OAK HC/FT.

AU10TIX raised USD 60m from US private equity firm TPG in September. Au10tix is a subsidiary of ICTS International, a security services firm started by former Israeli intelligence agents.

Thoughtexchange, the Rossland, Canada-based marketing firm using AI, said it raised USD 20m in a Series B financing round led by Information Venture Partners.

AutoPets, the Auburn Hills, Michigan-based robotic pet equipment maker, raised USD 31m in a financing round led by Pondera Holdings, according to a report in Crain’s Detroit Business.

Blue Ocean Robotics, the Odense, Denmark-based service robot maker for the healthcare, hospitality, construction and agriculture sectors, said it raised DKK 80M (USD 11.8m) in a new funding round that included the family of the late Danish entrepreneur C.C. Nielsen and Juliana Drivhuse.

Rebel, the Sao Paulo, Brazil-based online personal loan platform using AI, said it raised USD 10m in an unspecified funding round that included Brazilian Fund Monashees and New York’s Fintech Collective.

In August, Rebel raised BRL 167m (USD 42m) in a securitization of loans picked up by investors including XP Asset Management and Franklin Templeton.

Soteria AI, the Hong Kong and San Francisco, California-based gaming support firm developing AI, said it raised USD 5m in an unspecified funding round led by N5 Holdings.

The company hired Tim Carruthers as president and COO and Devon Nobrega as chief scientist in November.

Allstacks, the Raleigh, North Carolina-based software development industry services firm using AI, said it raised USD 4.7m in a seed funding led by Boston’s Hyperplane Venture Capital.

Augtera, the Palo Alto, California-based AI platform for cloud computing networks, said it raised USD 4m in a funding round led by Bain Capital Ventures.

Other deals include Bamboo Learning and Intrinsyc

LEGAL AND REGULATORY

The UK’s Information Commissioner’s Office is putting forward a new regulation requiring businesses and other organizations to explain any decisions made by AI, according to a Techhq report.

Virtual judges using AI are moving forward in China, a policy paper from the country’s Supreme Court shows in an Economic Times report.

Successful AI stems from human-centered design, US federal officials said at a recent panel discussion, according to a MeriTalk report.

PEOPLE

Investview, the Eatontown, New Jersey-based company providing AI processing services, said it hired Joseph Cammarata as CEO.

SparkCognition, the Austin, Texas-based machine learning firm, said it hired Jeffrey Lass as CFO.

The company raised USD 100m in Series C funding led by March Capital Partners in October. In September last year SparkCognition hired Vijay Doradla as chief business officer. Doradla was a director at Verizon’s venture capital arm. SparkCognition hired Sridhar Sudarsan as chief technology officer in July 2018.

Zenoss, the Austin, Texas-based machine learning software company, said it hired Matthew Bates as CFO.

Kenna Security, the San Francisco, California-based cybersecurity company using machine learning, said it hired Terry Murphy as CFO.

Alation, the Redwood City, California-based data services company using AI, said it hired Eric Chan as CFO and Kiran Narsuas as vice president of business development.

Co-founder Alan Kalb was named chief data officer in April, and Stephanie McReynolds was promoted to senior vice president of marketing

Berkshire Grey, the Lexington, Massachusetts-based e-commerce industry services firm using AI, said it hired Steve Johnson as president and COO.

SBG Technology, the Alexandria, Virginia-based cyber security, IT and AI company, said it hired Robert Gordon as chief growth officer.

insitro, the San Francisco, California-based drug development company using machine learning, said it hired Serafim Batzoglou as chief data officer. The company hired former Pfizer executive Keith James as senior vice president of drug discovery and Mary Rozenman as CFO and chief business officer in August.

Simon Data, the New York City-based enterprise marketing platform using machine learning, said it hired Doina Harris as chief product officer. In August the company raised USD 30m in a Series C funding round led by US technology focused venture capital firm Polaris Partners.

Malwarebytes, the Santa Clara, California-based cybersecurity company using AI, said it promoted Akshay Bhargava to chief product officer. The former Oracle and McKinsey executive was senior vice president of products at Malwarebytes

SubscriberWise, the Massillon, Ohio-based consumer reporting agency for the communications industry using AI, said it hired Vitali Halenka as chief data scientist.

Crosschq, the San Francisco, California-based human resources company using machine learning, said it hired Brooks Holtom as chief science advisor. Crosschq raised USD 4.1m in a seed round led by GGV Capital in August.

Cannabics Pharmaceuticals, the Tel Aviv, Israel-based company using AI to develop treatments for the side effects of cancer therapies, said it hired Yaakov Waksman as head of cannabidiol research. Last year, the company raised USD 7.5m from the sale of shares with warrants.

Eightfold.ai, the Mountain View, California-based human resources company using AI, said it hired Tracy Flynn as head of human resources and Jeff Griggs as senior vice president of global sales. The company raised USD 28m in a Series C in April.

RepRisk, the Zurich, Switzerland-based financial services firm using AI, said it hired Heiko Bailer as head of environmental, social and governance quantitative investments.

PicsArt, the San Francisco, California-based image editing firm using AI, said it hired Avnish Patel as senior vice president of strategy and operations and Jane Hu as vice president of content and community.

Bestow, the Dallas, Texas-based digital life insurance company using AI, said it hired Jackie Morales as chief insurance officer, Tannen Campbell as chief marketing officer, Chris Laia as general counsel and Brian Romanko as vice president of engineering.

Compliance.ai, the San Francisco, California-based regulation technology firm using AI, said it hired Matt Hill as vice president of sales and Julie Craig as vice president of marketing.

Other hiring includes Alion Science and Technology, Tiger Pistol, ConsumerMedical and Iron Mountain

And DeepMind co-founder Mustafa Suleyman is moving to Google, according to a Verge report.

SUBSCRIBE FOR THE WEEKLY NEWSLETTER.