AI typically raises $ 25 million to further commercialize synthetic data in Europe and the US - TechCrunch

AI typically raises 25 million to further commercialize synthetic

Austrian synthetic data startup company MOSTLY AI announced today that it has raised a $ 25 million Series B collection. The work was led by British VC company Molten Ventures, with the participation of new investor Citi Ventures. Two existing investors also returned: 42CAP based in Munich, and Earlybird based in Berlin, which had led MOSTLY AI's $ 5 million Series A round in 2022.

Synthetic data is misleading, but not random: AI typically uses artificial intelligence to achieve a high level of loyalty to client databases. Its datasets “look just as real as a company’s original messenger data with just as much information, but without the original personal data points,” the company says.

Speaking to TechCrunch, AI MOSTY CEO Tobias Hann said the company plans to use the money to maximize the boundaries of their product, grow their team, and gain more customers both in Europe and in the US, where they already have offices. in New York City.

MOSTLY AI was established in Vienna in 2022, and the Universal Data Protection Directive (GDPR) was implemented throughout the EU a year later. This demand for privacy protection solutions and the corresponding rise in machine learning has created a major shift for synthetic data. Gartner estimates that, by 2024, 60% of the data used for AI development and analytics projects will be synthetically generated.

Typical AI clients are mostly Fortune 100 banks and insurers, as well as telcos. These three highly regulated sectors drive most of the demand for synthetic record data, along with healthcare.

Unlike some of its competitors, AI MOSTLY AI has not focused on health care in the past, but it could change. "This is definitely something we are keeping a close eye on and we are really starting some pilot projects this year," said the Chief Executive.

Democratization of AI means that synthetic data is used far beyond Fortune 100 companies, Hann told TechCrunch. His company therefore plans to serve smaller organizations and a wider range of sectors in the future. But so far, it has made sense for MOSTLY AI to focus on campaign-level messengers.

At the moment, enterprise companies are the ones with the budgets, need and luxury to work with synthetic data, Hann said. To meet their expectations, AI MOSTLY AI received ISO certifications.

Speaking to Hann, one thing becomes clear: While the start - up business has a strong technical base, it is equally invested in the commercialization of its technology and the business value that it can add. to it for the clients. “AI is leading the way in this emerging and fast-growing space in terms of customer experience and experience,” said Molten Ventures investment director Christoph Hornung.

The need to comply with privacy laws such as the GDPR and CCPA clearly drives demand for synthetic data, but this is not the only feature to be played. For example, demand in Europe is also driven by a broader cultural context; while in the US, it is also the result of a desire for innovation. For example, usage issues can include advanced analysis, prediction algorithms, fraud detection and pricing models - but without data that can be traced back to specific users.

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"Many companies are proactively approaching the area because they understand that customers value privacy," said Hann. "These companies realize that they also gain a competitive advantage when dealing with and working with data in a way that preserves privacy."

Seeing more US companies looking to embrace synthetic data in innovative ways is the main reason AI MOSTLY AI wants to grow their team in the US But it also employs more widely, both in Vienna and at a distance. Their plan is to increase the number of people from 35 to 65 by the end of the year.

Hann predicts that 2022 will be "the year in which synthetic data will take off," and beyond this year, "a very strong decade for synthetic data. “This is underpinned by the growing demand for accountable AI, centered around key concepts such as AI fairness and definition. Synthetic data helps answer these challenges. "It will allow enterprises to augment and decrypt their datasets," said Hann.

Machine learning to one side, AI largely sees a lot of potential for synthetic data to be used in software testing. Supporting these use issues requires making synthetic data accessible not only to data scientists, but also to software engineers and quality verifiers. It's with them in mind that AI MOSTLY came up with a few months ago with version 2.0 of its platform. “AI 2.0 can be implemented largely on a private or cloud-based basis, and adapted to the various data structures of the company that uses it,” the company wrote at the time.

"We are clearly a B2B software infrastructure company," said Hann. Both in their Series A and B rounds, the company was looking for investors who understood that approach.

Molten Ventures as a VC was publicly listed so not subject to normal funding rounds also carried weight, Hann confirmed when I asked. "This long-term commitment from a partner was very appealing to us, because it's a little more flexible."

It no longer hurts that Citi Ventures is Citigroup's venture branch, and its headquarters in the US in the US we can also help with networking and relationships there, "said Hann.

With $ 25 million in new funding and a greater US presence, AI MOSTY will now have more resources to compete against other companies in its segment of the synthetic data space. These include Tonic.ai, which raised $ 35 million in Series B last September; Gretel AI, which unveiled a $ 50 million B series in October last year; and seed-funded British starter Hazy, as well as players aiming for a specific vertical.

"We're seeing more and more players emerging in space and the market in general, so it's definitely showing a lot of interest," Hann said.

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