Luke Des Cotes, David Tapp, Metalab Ventures

Metalab goes from quietly building the internet to investing in it

Luke Des Cotes, David Tapp, Metalab Ventures

Image Credits: Metalab Ventures / Metalab Ventures general partners Luke Des Cotes and David Tapp

Nearly 20 years after finding success in helping startups build products, Canadian interface design firm Metalab has launched Metalab Ventures to invest in many of those product-led startups.

Serial entrepreneur and investor Andrew Wilkinson started Metalab in 2006, a company that went on to support product innovations by companies including Slack, Coinbase, Uber and Tumblr.

Metalab often works with startups, acting a bit like co-founders, to help them get a product off the ground. Then Metalab “lets them loose” to grow, CEO Luke Des Cotes told TechCrunch. Metalab had a record year in 2023 and was involved in the development of 40 products that went into the market last year.

Corporate venture capital has found its stride over the last decade as a stable source of capital or when startups have something Big Tech wants.

With Metalab Ventures, the venture arm will play the role of a long-term value investor, essentially “putting our money where our mouth is,” Des Cotes said.

“We want to go on a journey with them for the next 10 to 12 years,” he said. “We’ve been asked over and over again by founders when we will invest, and sometimes we have, but it’s been very ad hoc in the past. Today, we make that a formal process.”

Big Tech corporate venture capital 🤝 generative AI startups

Metalab Ventures has raised $15 million in capital commitments for its first fund to invest in product-led startups where strategy, design and technology are the key differentiators.

“Product-led” is how a product will be the differentiator for the business, Des Cotes said. Most businesses have some major component of success riding on how well a product is created and how well it’s connecting to the user. Metalab Ventures seeks out founders who “believe in the power of design as a tool to be able to connect with users in a way that’s different and special,” he said.

Des Cotes and David Tapp, head of partnerships at Metalab, are the general partners at Metalab Ventures and will invest in 25 to 35 startups at the pre-seed, seed and Series A stages. So far, the firm made a handful of unannounced investments, Des Cotes said.

The limited partnership makeup of the new fund includes institutional, funds to fund, angel investors and founders of companies with whom Metalab has previously worked. Metalab is also an LP in the fund.

The company performs diligence on thousands of founders each year to determine who it will help, and that same process was shifted to Metalab Ventures in the way it evaluates investments, Des Cotes said.

When determining who to invest in, the process includes getting to know the founders and if the firm can add value. Metalab often taps into its 160-person workforce for design, technology, product and research leadership.

“We’ve already operated very much like a venture fund,” Des Cotes said. “Now we are working through that process to understand what’s the product, what’s the opportunity, what’s the value that can be created here. When we believe in this business, we think of human capital as being our scarce resource that we can then deploy into those businesses.”

Have a juicy tip or lead about happenings in the venture world? Send tips to Christine Hall at [email protected] or via this Signal link. Anonymity requests will be respected. 

Ulta Beauty launches a fund, showcasing the resilience of corporate venture capital

Intel Headquarters

Intel and others commit to building open generative AI tools for the enterprise

Intel Headquarters

Image Credits: hapabapa / Getty Images

Can generative AI designed for the enterprise (for example, AI that autocompletes reports, spreadsheet formulas and so on) ever be interoperable? Along with a coterie of organizations including Cloudera and Intel, the Linux Foundation — the nonprofit organization that supports and maintains a growing number of open source efforts — aims to find out.

The Linux Foundation on Tuesday announced the launch of the Open Platform for Enterprise AI (OPEA), a project to foster the development of open, multi-provider and composable (i.e. modular) generative AI systems. Under the purview of the Linux Foundation’s LF AI and Data org, which focuses on AI- and data-related platform initiatives, OPEA’s goal will be to pave the way for the release of “hardened,” “scalable” generative AI systems that “harness the best open source innovation from across the ecosystem,” LF AI and Data’s executive director, Ibrahim Haddad, said in a press release.

“OPEA will unlock new possibilities in AI by creating a detailed, composable framework that stands at the forefront of technology stacks,” Haddad said. “This initiative is a testament to our mission to drive open source innovation and collaboration within the AI and data communities under a neutral and open governance model.”

In addition to Cloudera and Intel, OPEA — one of the Linux Foundation’s Sandbox Projects, an incubator program of sorts — counts among its members enterprise heavyweights like Intel, IBM-owned Red Hat, Hugging Face, Domino Data Lab, MariaDB and VMware.

So what might they build together exactly? Haddad hints at a few possibilities, such as “optimized” support for AI toolchains and compilers, which enable AI workloads to run across different hardware components, as well as “heterogeneous” pipelines for retrieval-augmented generation (RAG).

RAG is becoming increasingly popular in enterprise applications of generative AI, and it’s not difficult to see why. Most generative AI models’ answers and actions are limited to the data on which they’re trained. But with RAG, a model’s knowledge base can be extended to info outside the original training data. RAG models reference this outside info — which can take the form of proprietary company data, a public database or some combination of the two — before generating a response or performing a task.

RAG
A diagram explaining RAG models. Image Credits: Intel

Intel offered a few more details in its own press release:

Enterprises are challenged with a do-it-yourself approach [to RAG] because there are no de facto standards across components that allow enterprises to choose and deploy RAG solutions that are open and interoperable and that help them quickly get to market. OPEA intends to address these issues by collaborating with the industry to standardize components, including frameworks, architecture blueprints and reference solutions.

Evaluation will also be a key part of what OPEA tackles.

In its GitHub repository, OPEA proposes a rubric for grading generative AI systems along four axes: performance, features, trustworthiness and “enterprise-grade” readiness. Performance as OPEA defines it pertains to “black-box” benchmarks from real-world use cases. Features is an appraisal of a system’s interoperability, deployment choices and ease of use. Trustworthiness looks at an AI model’s ability to guarantee “robustness” and quality. And enterprise readiness focuses on the requirements to get a system up and running sans major issues.

Rachel Roumeliotis, director of open source strategy at Intel, says that OPEA will work with the open source community to offer tests based on the rubric, as well as provide assessments and grading of generative AI deployments on request.

OPEA’s other endeavors are a bit up in the air at the moment. But Haddad floated the potential of open model development along the lines of Meta’s expanding Llama family and Databricks’ DBRX. Toward that end, in the OPEA repo, Intel has already contributed reference implementations for a generative-AI-powered chatbot, document summarizer and code generator optimized for its Xeon 6 and Gaudi 2 hardware.

Now, OPEA’s members are very clearly invested (and self-interested, for that matter) in building tooling for enterprise generative AI. Cloudera recently launched partnerships to create what it’s pitching as an “AI ecosystem” in the cloud. Domino offers a suite of apps for building and auditing business-forward generative AI. And VMware — oriented toward the infrastructure side of enterprise AI — last August rolled out new “private AI” compute products.

The question is whether these vendors will actually work together to build cross-compatible AI tools under OPEA.

There’s an obvious benefit to doing so. Customers will happily draw on multiple vendors depending on their needs, resources and budgets. But history has shown that it’s all too easy to become inclined toward vendor lock-in. Let’s hope that’s not the ultimate outcome here.

With Easel, ex-Snap researchers are building the next-generation Bitmoji thanks to AI

Image Credits: Easel

Easel is a new startup that sits at the intersection of the generative AI and social trends, founded by two former employees at Snap. The company has been working on an app that lets you create images of yourself and your friends doing cool things directly from your favorite iMessage conversations.

There’s a reason why I mentioned that the co-founders previously worked at Snap before founding Easel. While Snap may never reach the scale of Instagram or TikTok, it has arguably been the most innovative social company since social apps started taking over smartphone home screens.

Before Apple made augmented reality and virtual reality cool again, Snap blazed the AR trail with lenses. Even if you never really used Snapchat, chances are you’ve played around with goofy lenses on your phone or using someone else’s phone. The feature has had a massive cultural impact.

Similarly, before Meta tried to make virtual avatars cool again with massive investments in Horizon Worlds and the company’s Reality Labs division, Snap made a curious move when it acquired Bitmoji back in 2016. At the time, people thought the ability to create a virtual avatar and use it to communicate with your friends was just a fad. Now, with Memojis in iMessage and FaceTime, and Meta avatars also popping up in Meta’s apps, virtual avatars have become a fun, innovative way to express yourself.

“I was at Snap for five years. Before that, I was at Stanford. I moved down to LA to join Snap in Bobby Murphy’s research team, where we kind of worked on a range of futuristic things,” Easel co-founder and CEO Rajan Vaish told TechCrunch in an exclusive interview. He co-founded Easel with Sven Kratz, who was a senior research engineer at Snap.

But this team was dissolved in 2022 as part of Snap’s various rounds of layoffs. The duo used the opportunity to bounce back and keep innovating — but outside of Snap.

AI as a personal communication vector

Easel is using generative AI to let users create Bitmoji-style stickers of themselves drinking coffee, chilling at the beach, riding a bicycle — anything you want as long as it can be described and generated by an AI model.

When you first start using Easel, you capture a few seconds of your face so that the company can create a personal AI model and use it to generate stickers. Easel is currently using Stable Diffusion‘s technology to create images. The fact that you can generate images with your own face in them is both a bit uncanny but also much more engaging than an average AI-generated image.

“Once you give your photos, we start training on our servers. And then we create an AI avatar model for you. We now know what your face looks like, how your hair looks like, etc.,” Vaish said.

But Easel isn’t just an image generation product. It’s a multiplayer experience that lives in your conversations. The startup has opted to integrate Easel into the native iOS Messages app so that you don’t have to move to a new platform, and create a new social graph, just to swap funny personal stickers.

Instead, sending an Easel sticker works just like sending an image via iMessage. On the receiving end, when you tap on the image, it opens up Easel on top of your conversation. This way, your friends can also install Easel and remix your stickers. This is one of the key features behind Bitmoji, too, as you can create scenes with both you and your friend in the stickers, amping up the virality.

Image Credits: Easel

Easel allows users to create more highly customized personal stickers than Bitmoji. Say, for example, you want a sticker that shows you’ll soon be drinking cocktails with your buddies in Paris. You could use a generic cocktail-drinking Bitmoji — but it won’t look like Paris. (And you’ve already seen this Bitmoji many times before.) Whereas, with Easel — and thanks to generative AI — you get to design the background scenes, locations and scenarios where your personal avatar appears.

Finally, Easel users can also share stickers to the app’s public feed to inspire others. This can create a sort of seasonality within the app as you might see a lot of firework stickers around July 4, for instance. It’s also a laid-back use case for Easel, as you can scroll until you find a sticker you like, tap “remix” and send a similar sticker (but with your own face) to your friends.

Easel has already secured $2.65 million in funding from Unusual Ventures, f7 Ventures and Corazon Capital, as well as various angel investors, including a few professors from Stanford University.

Now let’s see how well Easel blends into people’s conversations. “We have learned two very unique use cases. One is that there’s a big demographic that is not very comfortable sharing their faces,” said Vaish. “I’m not a selfie person and a lot of people are not. This is allowing them to share what they’re up to in a more visual format.”

“The second one is that Easel allows people to stay in the moment,” he added, pointing out that sometimes you just don’t want to take out your phone and capture the moment. But Easel still enables a form of visual communication after the fact.

Sigma is building a suite of collaborative data analytics tools

Data prep picture with data coming in from many different sources and coming out the other side as charts and applications.

Image Credits: miakievy / Getty Images

In 2014, Jason Frantz and Rob Woollen co-founded Sigma Computing, a platform that overlays data stored in data platforms such as Snowflake and Google BigQuery with a spreadsheet-like interface for data visualization and analytics. With Sigma, the two former software engineers sought to tackle what they perceived as the intractable data challenges faced by large corporations: unwieldy tooling and difficult-to-manage data stores.

In a 2023 survey from Oracle, the majority of business leaders said that they don’t believe their employer’s current approach to data and analytics is addressing their needs. Seventy-seven percent said that the dashboards and charts they get aren’t germane to decisions they need to make, and 72% admit the sheer volume of data — and their lack of trust in that data — has at times stopped them from making decisions altogether.

“After recognizing the huge advances in cloud data infrastructure during the past decade, Jason and Rob identified a gap in the market,” Sigma Computing CEO Mike Palmer told TechCrunch in an interview. “Sigma is building a data workspace for everyone — where teams can analyze data in spreadsheets, build business intelligence in the form of dashboards and reports and create data workflows and applications where data never leaves a company’s data warehouse.”

Out of the gate (in 2014), Sigma only offered a set of basic business intelligence and analytics tools to connect to a customer’s outside databases. But the firm — which Frantz and Woollen founded while entrepreneurs in residence at Sutter Hill Ventures, Woollen having come from Salesforce’s Work.com org — quickly grew from there.

Today, Sigma’s product suite consists of tools that let users analyze data “in-place” in databases containing up to billions of records. Customers can tap the platform to build dashboards, reports, workflows and apps without data leaving its source.

“We champion what we call ‘massive multiplayer business intelligence,’ a dynamic environment where professionals, regardless of their technical expertise, come together to leverage their distinct skills, all in real time, all within the same platform,” Palmer said.

Sigma Computing
Sigma offers a range of tools built for business intelligence and data analytics workloads.
Image Credits: Sigma Computing

The go-to-market strategy has turned out to be a winning one.

According to Palmer, Sigma’s revenue has grown 100% year-over-year for four straight years on the back of a ~1,000-company customer base. Those figures have investors pleased. On Thursday, Sigma closed a $200 million Series D funding round co-led by Avenir Growth Capital and Spark Capital that values the company at $1.5 billion, up 60% from its valuation in 2021 (when it raised $300 million).

Palmer believes the key to Sigma’s success in the face of stiff competition like Tableau and Microsoft’s Power BI has been a continued focus on creating data analytics tools with a low barrier to entry.

“Existing business intelligence platforms were primarily designed for ‘super-analysts’ — individuals who work within lines of business and grasp the intricacies of enterprise-scale data manipulation,” Palmer said. “For most people, business intelligence was — and remains — a significant hurdle. Jason and Rob believed there was a giant market of smart people that have either been ignored by more technical tools or have been given simple tools that only allow them to ask simple questions.”

It probably doesn’t hurt that the market for business intelligence and analytics tools is huge — and growing at a very healthy pace. According to Precedence Research, a market research firm, the business intelligence sector alone will climb from $27.24 billion in 2022 to 54.9 billion by 2023.

With Sigma’s massive war chest — $581 million in venture capital — and a staff of around 450, the company plans to grow its operations in the U.S. and internationally and invest in AI, specifically integrations with generative AI platforms like OpenAI’s to let users ask questions about their company’s data.

“We believe, due to data volumes, speed of change and governance, plus security requirements, that data will increasingly be centralized in systems like Databricks and Snowflake,” Palmer said. “For competitive enterprises to work synchronously and at high velocity, you need to provide your employees with raw, live data and the tools to build and communicate together. And they need a platform that enables them to access that data with whatever skills they have.”

Snowflake Ventures, Sutter Hill Ventures, D1 Ventures, Xn Ventures and Altimeter Capital also participated in Sigma’s Series D.

Bumble buys community building app Geneva to expand further into friendships

Monitors display Bumble Inc. signage during the company's initial public offering (IPO) in front of the Nasdaq MarketSite in New York, U.S., on Thursday, Feb. 11, 2021.

Image Credits: Michael Nagle/Bloomberg / Getty Images

Dating app maker Bumble has acquired Geneva, an online platform built around forming real-world groups and clubs. The company said that the deal is designed to help it expand its focus from “one-to-one connections to groups and communities” — friendships, in other words.

Terms of the deal were not disclosed, but the announcement comes shortly after Bumble revealed that it would be pursuing acquisitions to drive growth, with CEO Lidiane Jones (who joined Bumble from Slack last year) noting on a recent earnings call that the company would consider the “value add” of an acquisition and how it might align with its own business goals.

“There’s certainly a lot of interesting technology companies across the industry that we’re constantly looking at, but we immediately look at if it actually aligns and accelerates with our long-term mission here,” Jones said on the company’s Q1 earnings call this month.

To date, Bumble has flirted with M&A sparingly, snapping up French dating app Fruitz two years ago followed last year when it doled out $10 million for Official, an app for couples.

Friends will be friends

While Bumble is best known for its dating app, the company recently indicated that friendships could be a bigger focus for the company moving forward, due in part to a broader decline in dating apps which led Bumble to lay off 30% of its workforce this year off the back of weak earnings. Bumble already has a separate friends app built around meeting people locally, and Geneva builds on that concept.

Founded out of New York in 2019, Geneva is all about meeting like-minded people in a given area, whether that’s to form running clubs or meetups to talk about the latest books. The company had raised around $36 million from notable backers, including Coatue, Instagram founders Mike Krieger and Kevin Systrom, Sequoia’s Michael Moritz and Patreon co-founder Jack Conte.

In a LinkedIn post this morning, Jones said the plan moving forward will be to “accelerate our friendship product using Geneva’s powerful technology platform.” This sounds like Geneva will ultimately be incorporated into Bumble, with Geneva ceasing to operate as a standalone platform, but when asked by TechCrunch, the company wouldn’t confirm what would happen next. In a separate post, Geneva said that it will continue to support “your existing groups,” and it is temporarily making Geneva invite-only through the transition. But it’s not clear what will happen to Geneva once the acquisition closes, which is expected in Q3 2024.

WitnessAI is building guardrails for generative AI models

Futuristic digital blockchain background. Abstract connections technology and digital network. 3d illustration of the Big data and communications technology.

Image Credits: v_alex / Getty Images

Generative AI makes stuff up. It can be biased. Sometimes it spits out toxic text. So can it be “safe”?

Rick Caccia, the CEO of WitnessAI, believes it can.

“Securing AI models is a real problem, and it’s one that’s especially shiny for AI researchers, but it’s different from securing use,” Caccia, formerly SVP of marketing at Palo Alto Networks, told TechCrunch in an interview. “I think of it like a sports car: having a more powerful engine — i.e., model — doesn’t buy you anything unless you have good brakes and steering, too. The controls are just as important for fast driving as the engine.”

There’s certainly demand for such controls among the enterprise, which — while cautiously optimistic about generative AI’s productivity-boosting potential — has concerns about the tech’s limitations.

Fifty-one percent of CEOs are hiring for generative AI-related roles that didn’t exist until this year, an IBM poll finds. Yet only 9% of companies say that they’re prepared to manage threats — including threats pertaining to privacy and intellectual property — arising from their use of generative AI, per a Riskonnect survey.

WitnessAI’s platform intercepts activity between employees and the custom generative AI models that their employer is using — not models gated behind an API like OpenAI’s GPT-4, but more along the lines of Meta’s Llama 3 — and applies risk-mitigating policies and safeguards.

“One of the promises of enterprise AI is that it unlocks and democratizes enterprise data to the employees so that they can do their jobs better. But unlocking all that sensitive data too well –– or having it leak or get stolen — is a problem.”

WitnessAI sells access to several modules, each focused on tackling a different form of generative AI risk. One lets organizations implement rules to prevent staffers from particular teams from using generative AI-powered tools in ways they’re not supposed to (e.g., like asking about pre-release earnings reports or pasting internal codebases). Another redacts proprietary and sensitive info from the prompts sent to models and implements techniques to shield models against attacks that might force them to go off-script.

“We think the best way to help enterprises is to define the problem in a way that makes sense — for example, safe adoption of AI — and then sell a solution that addresses the problem,” Caccia said. “The CISO wants to protect the business, and WitnessAI helps them do that by ensuring data protection, preventing prompt injection and enforcing identity-based policies. The chief privacy officer wants to ensure that existing — and incoming — regulations are being followed, and we give them visibility and a way to report on activity and risk.”

But there’s one tricky thing about WitnessAI from a privacy perspective: All data passes through its platform before reaching a model. The company is transparent about this, even offering tools to monitor which models employees access, the questions they ask the models and the responses they get. But it could create its own privacy risks.

In response to questions about WitnessAI’s privacy policy, Caccia said that the platform is “isolated” and encrypted to prevent customer secrets from spilling out into the open.

“We’ve built a millisecond-latency platform with regulatory separation built right in — a unique, isolated design to protect enterprise AI activity in a way that is fundamentally different from the usual multi-tenant software-as-a-service services,” he said. “We create a separate instance of our platform for each customer, encrypted with their keys. Their AI activity data is isolated to them — we can’t see it.”

Perhaps that will allay customers’ fears. As for workers worried about the surveillance potential of WitnessAI’s platform, it’s a tougher call.

Surveys show that people don’t generally appreciate having their workplace activity monitored, regardless of the reason, and believe it negatively impacts company morale. Nearly a third of respondents to a Forbes survey said they might consider leaving their jobs if their employer monitored their online activity and communications.

But Caccia asserts that interest in WitnessAI’s platform has been and remains strong, with a pipeline of 25 early corporate users in its proof-of-concept phase. (It won’t become generally available until Q3.) And, in a vote of confidence from VCs, WitnessAI has raised $27.5 million from Ballistic Ventures (which incubated WitnessAI) and GV, Google’s corporate venture arm.

The plan is to put the tranche of funding toward growing WitnessAI’s 18-person team to 40 by the end of the year. Growth will certainly be key to beating back WitnessAI’s rivals in the nascent space for model compliance and governance solutions, not only from tech giants like AWS, Google and Salesforce but also from startups such as CalypsoAI.

“We’ve built our plan to get well into 2026 even if we had no sales at all, but we’ve already got almost 20 times the pipeline needed to hit our sales targets this year,” Caccia said. “This is our initial funding round and public launch, but secure AI enablement and use is a new area, and all of our features are developing with this new market.”

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