DataRobot, a startup creating an enterprise AI development platform, today closed a $300 million series G funding round led by Altimeter Capital and Tiger Global, with participation from Morgan Stanleyâ€™s Counterpoint Global, Franklin Templeton, ServiceNow Ventures, and Sutter Hill Ventures. The round brings DataRobotâ€™s valuation to $6.3 billion post-money, up from $2.7 billion in November 2020, and comes as the company finalizes the acquisition of Seattle, Washington-based MLOps startup Algorithmia.
CEO Dan Wright says the new funds will be used to â€œfuel platform innovationâ€ and â€œenable DataRobot to bring â€¦ augmented intelligenceâ€ to clients around the world. Specifically, DataRobot plans to build out its go-to-market teams, with Sutter Hill supporting the companyâ€™s hiring initiatives.
â€œThis â€¦ investment further validates our vision for combining the best that humans and machines have to offer in order to power predictive insights, enhanced data-driven decisions, and unprecedented business value for our customers,â€ Wright said in a statement. â€œDataRobot is seeing more customers across the globe choose our platform to solve their biggest challenges at scale.â€
The benefits of AI and machine learning can feel intangible at times, but research shows this hasnâ€™t deterred organizations from adopting the technologies at scale. According to a recent survey from ManageEngine, the IT division of Zoho, business deployment of AI is on the rise. And Gartner separately found that business use of AI grew 270% from 2015 to 2019, with IBM claiming almost one-third of respondents to its corporate May 2021 report are employing some form of AI.
AI adoption doesnâ€™t always meet with success, however. Thatâ€™s why Jeremy Achin, previously director of research and modeling at Travelers, and Tom de Godoy, Achinâ€™s former colleague, founded Boston, Massachusetts-based DataRobot in 2012. The cofounders sought to build tools to help customers prepare data and create and validate machine learning models, including classification, advanced regression, time series, and deep learning algorithms.
DataRobotâ€™s platform runs on cloud platforms, on-premise datacenters, or as a fully managed service. Once itâ€™s deployed, customers can use it to monitor models from a dashboard and test, run, and maintain the models to optimize outcomes. Depending on a customerâ€™s needs, DataRobot can automatically run a â€œcompetitionâ€ by testing hundreds or even thousands of solutions to a problem and delivering models to provide predictions. The platform also allows data scientists to explore, combine, and shape a range of data types and content â€” from traditional tabular data in rows and columns to free-form text, images, and geospatial data â€” into assets ready for AI models.
DataRobot claims to have had triple-digit recurring revenue growth dating back to 2015, as well as more than 2 billion models built on the platform to date. The companyâ€™s customers span more than a third of the Fortune 50, including Kroger, Nationwide, Lenovo, PNC, and others across banking, health care, insurance, finance, manufacturing, retail, government, sports, and gaming verticals.
The new round brings DataRobotâ€™s total raised to over $1 billion. This makes the company one of the top-funded AI startups in the world â€” competitors like Determined AI, Explorium, Ople, Domino Data Lab, and KaskadaÂ trail hundreds of millions of dollars behind.
DataRobot says its purchase of Algorithmia, which was announced alongside the series G close this morning, will â€œfurther cementâ€ its place as a provider of solutions in the MLOps space. According to Wright, DataRobot will integrate Algorithmiaâ€™s model-serving tools with its existing monitoring and management capabilities to offer customers access to â€œthe most reliable and cost-effective operational backbone for running any machine learning model,â€ including deep learning workloads for natural language processing and image processing on CPUs and GPUs.
â€œAlgorithmiaâ€™s people and technology significantly enhance our mission to rapidly move from experimental to applied AI by helping customers bring every model into production with rapid time to value,â€ Wright continued. â€œWe are thrilled to welcome the Algorithmia team and advance our leading MLOps offering with world-class, enterprise-grade MLOps infrastructure to organizations across the globe.â€
Algorithmia, which was founded in 2014 by Diego Oppenheimer and Kenny Daniel, provides a platform that aims to bring models into production with â€œenterprise-gradeâ€ security and governance. Algorithmia combines practices from AI, MLOps, and DevOps, establishing processes for organizing customersâ€™ machine learning work from IT, data scientists, and various divisions to orchestrate moving models into production.
Over 130,000 IT operations, data scientists, and engineers have used Algorithmia to date, including Fortune 500 companies like Merck, Ernst & Young, and Deloitte, according to CEO Oppenheimer. Prior to the acquisition, Algorithmia had raised $38.1 million in capital from Norwest Venture Partners, Gradient Ventures, and other investors.
â€œWe understand that businesses cannot get the value of their machine learning models unless they have the ability to deliver those models quickly, reliably, and at scale,â€ Oppenheimer said in a press release. â€œItâ€™s been clear to us for many years that DataRobot shares this philosophy, and weâ€™re thrilled to combine our dedication of enabling customers to thrive in todayâ€™s market by delivering more models in production, faster, while protecting their business.â€
DataRobotâ€™s other acquisitions include Nutonian, which developed a service called Eureqa focused on classification, numeric, multi-series, and time series capabilities. More recently, DataRobot nabbed Nexosis and Paxata, companies working to simplify the way developers build AI apps and prep data, as well as Cursor and ParallelM.