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VCs See AI Software as an Intelligent Choice

5 January 2001 9:30
By Tornado Staff

With the success of knowledge management companies like Autonomy, venture capitalists are increasingly aware of investing opportunities presented by artificial intelligence software.

One new player, a London-based company called Volantia, wants to carve out a niche for itself by using artificial intelligence to help automate data entry. The company, founded by two former MIT students, last week announced it snagged €3 million in seed funding from nCoTec Ventures, a UK-based VC that invests in wireless enabling technologies.

“We wanted to simplify user-computer interaction when entering data,” said company co-founder Claudia Rodriguez. She and colleague Gerardo Lemus - who has a PHd in artificial intelligence - conducted research into this type of technology while at MIT. They later went separate ways, but came together again to found Volantia last year. Until now, Rodriguez said, the company has been self-funded.

Volantia claims it has developed a way to take semi-structured data - which can include a text or voice-based message from a variety of sources - and convert it into a format that can be automatically entered into a database. The software allows users to input the data in natural language, and it is automatically converted into an XML or another format the database can understand.

Normally, Rodriguez explained, people entering data into a database have to fill in all kinds of complicated fields so the computer can use the information. “This is unnatural for users and creates all kind of mistakes,” she said. Users will be able to send the messages from any device connected to the network. “This will make data entry faster and more productive,” Rodriguez said.

But these appear to be early days for the company, which has only 10 employees and a handful of potential customers. Indeed, the company doesn’t even want to give out details on potential applications for its product. Rodriguez said a corporate customer who has already signed on for its software insists that it and the application it plans to use not yet be disclosed. More details will be available over the next few months. Rodriguez would say, however, that the financial services industry will be a prime target for the product.

NCoTec, Volantia’s prime investor, believes the technology will have applications particularly in wireless networks. “This will give you the ability to do complex commands in a wireless environment,” noted Alisdair Warren, founder and managing director at nCoTec. Although right now the product can only interpret text messages, he thinks the most interesting application for wireless networks will be with voice recognition techniques.

London-based VC nCoTec is a relatively new player to the investing scene. The company was founded in June 2000 by Warren, an ex-Salomon Smith Barney investment banker, and his colleagues Tim Horlick and George MacRitchie. The company has raised €19 million for investment, and is in the process of putting together a €150 million fund.

“We see the strongest tech growth curve in wireless Internet users. We are seeking to identify companies whose growth in value is correlated to the growth in wireless,” Warren said.

Volantia expects to bring in revenues selling software based on the number of seats or licenses sold. But while its revenue model may approximate that of many ERP software houses, Volantia said it will seek to partner with such companies rather than compete with them, offering its product as a supplementary capability to traditional enterprise software packages. While Autonomy is certainly the best known, and probably the most successful artificial intelligence software company, Volantia claims it is not a direct competitor. Autonomy concentrates more on using intelligence techniques for data searches and classification, or what's called data mining.

A far closer match as competitor, according to Rodriguez, is Inxight, a privately held company based in Santa Clara, Calif. whose software helps automate the analysis, organization and presentation of information across the Internet and intranets.


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