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A.I. startups are reeling in hundreds of millions to help computers better understand humans

February 16, 2022, 5:18 PM UTC

Last week, I made a mistake. My friends and I were driving down the road after a second day of skiing. I was on the phone with the car rental agency, trying to extend our reservation for one day.

Then I used the word “absolutely.” I immediately regretted it. I mean—that is truly one of the worst things you could ever say to a bot on the other end of the phone. They can comprehend words like “car” or “no”—but throw in any sort of fancy vernacular and you might as well hang up. I was on hold for another (approximately) 20 minutes shortly after the automated voice on the other end spiraled into confusion.

Here’s what I’m getting at: The more human our computers become, the more time we get back in our lives.

Call center automation is a more obvious example of where artificial intelligence is transforming our day-to-day. Or your banking app, where you can request euros get mailed to you in a chatbot with Bank of America’s Erica. There’s also things like shelf space analysis, crypto portfolio curation, and harvesting crops.

When it comes to language itself, it’s the understanding that is critical. It’s how words are put together—and, when speaking, the cadence—that becomes necessary for comprehension. And that’s why, while Duolingo has helped me be able to come up with basic sentences, it can still be hard to understand what others are saying, even if you know the vocabulary.

That’s where NLP comes in, or natural language processing. Companies are honing in their algorithms so that their computers better recognize things like prepositions or phrases and better understand what a human is typing or saying.

There’s a lot of money pouring in to make this sort of thing happen, particularly at giants like Google, Microsoft, or Meta. But it’s hard to keep track of all the startup activity, too. Just this morning, speech analytics platform Uniphore, which offers virtual assistant and call center tools, announced it had raised $400 million in funding led by NEA, now valuing the company at $2.5 billion. Cohere, a startup led by former Google Brain team member Aidan Gomez, raised $125 million, led by Tiger Global, as my colleague Jonathan Vanian broke the news of on Tuesday. Gomez was one one of the Google staffers that developed the concept of transformers, which use neural networks to teach computers language skill. He intends to sell his technology to smaller businesses in specialized markets like health care that bigger companies like Google or Microsoft may not be focused on, as well as tackle things like analyzing the social media conversation about some given topic.

It’s worth pointing out that companies (and their well-funded backers) are the ones investing the most dollars in A.I. innovation right now. The problem there is that, as we’ve all seen, the ethical implications of burgeoning, powerful technologies are sometimes put on the backburner.

It’s for this very reason that the former CEO of Google, Eric Schmidt, said this morning he was launching a $125 million philanthropic fund: to look into how things like bias or geopolitical conflict play out in the technology. For example, research shows that A.I. has perpetuated racial bias in access to health care. 

“I don’t think we understood the impact of society from social media — both the positive and the negative. And A.I. has the potential to have both a greater positive and negative impact, because of its ability to understand and target and change people’s behavior, belief systems,” Schmidt told the Financial Times.

I feel as if we’ve all learned at this point how powerful technology should be paired alongside thoughtful consideration of the implications of using it. Sure, there will always be some form of trial and error. But there’s also a lot you can hash out in advance.

Here’s something to think about in advance of calling a car rental agency: Don’t use the word “absolutely” while talking to a bot.

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See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com

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VENTURE DEALS

- Flutterwave, a San Francisco and Lagos, Nigeria-based payments startup, raised $250 million in funding led by B Capital Group and was joined by investors including Alta Park Capital, Whale Rock Capital, and Lux Capital.

- Kallyope, a New York-based biotechnology company focused on developing therapeutics involving the gut-brain axis, raised $236 million in Series D funding. Mubadala Investment Company and The Column Group co-led the round.

- Epirus, a Redondo Beach, Calif.-based solid-state, software-defined directed energy systems developer, raised $200 million in Series C funding led by T. Rowe Price Associates and was joined by investors including 8VC, Bedrock, Broom Ventures, EPIQ Capital Group, Gaingels, General Dynamics Land Systems, I Squared Capital, Moore Strategic Ventures, Parkwood, Piedmont Capital Investments, Red Cell Partners, and StepStone Group.

- Genesis, a London-based low-code software platform for capital markets, raised $200 million in Series C funding led by Tiger Global and was joined by investors including Insight partners, Accel, GV (formerly Google Ventures), Illuminate Financial, Tribeca Early Stage Partners, and Salesforce Ventures.

- Ro, a New York-based direct-to-patient health care company, raised $150 million in funding led by ShawSpring Partners and was joined by investors including General Catalyst, FirstMark Capital, TQ Ventures, SignalFire, BoxGroup, The Chernin Group, Initialized Capital, Altimeter Capital, Baupost Group, and Seven Seven Six.

- WSC Sports, a Givatayim, Israel-based AI sports video technology company, raised $100 million in Series D funding led by ION Crossover Partners and was joined by investors including Intel Capital, O.G. Tech, and Detroit Venture Partners.

- Homebound, a Santa Rosa, Calif.-based home building services company, raised $75 million in Series C funding led by Khosla Ventures and was joined by investors including Google Ventures, Forerunner, Thrive, and Fifth Wall

- Walking Fish Therapeutics, a San Francisco-based cell therapy developer, raised $73 million in Series A funding. Northpond Ventures and First Spark Ventures co-led the round and were joined by investors including Terra Magnum Capital Partners.

- Sharegain, a London-based SLaaS (Securities Lending as a Service) solution company, raised $64 million in funding led by WestCap.

- Terray Therapeutics, a Pasdena, Calif.-based drug discovery platform, raised $60 million in Series A funding led by Madrona Venture Group and was joined by investors including Two Sigma Ventures, Digitalis Ventures, KdT Ventures, Goldcrest Capital, XTX Ventures, Sahsen Ventures, Greentrail Capital, and Alexandria Venture Investments

- Companion Spine, a New York and Bordeaux, France-based spine condition diagnosis and surgical treatment company, raised $55 million in Series A funding led by Viscogliosi Brothers.

- PlayPlay, a Paris-based online video creation platform for in-house enterprise teams, raised $55 million inSeries B funding led by Insight Partners and was joined by Balderton Capital

- Antora Energy, a Sunnyvale, Calif.-based thermal battery developer, raised $50 million in funding. Breakthrough Energy Ventures and Lowercarbon Capital co-led the round and were joined by investors including Shell Ventures, BHP Ventures, Grok Ventures, Trust Ventures, Overture VC, Impact Science Ventures, and Fifty Years.

- Tropic, a New York-based SaaS software procurement platform, raised $40 million in Series B funding led by Insight Partners

- Cann, a Venice City, Calif.-based cannabis-infused beverage company, raised $27 million in Series A funding from investors including Imaginary Ventures, Nina Dobrev, Adam DeVine, Zoey Deutch, Jordan Cooper, Sara Foster, and Rosario Dawson

- Hyphen, a San Jose, Calif.-based food technology developer that uses software and robotics to improve efficiency and consistency in commercial kitchens, raised $24 million in Series A funding led by Tiger Global and was joined by investors including Toast co-founder Steve Fredette, Apollo Global Management CEO Marc Rowan, and former Chief Culinary Officer of The Cheesecake Factory Donald Moore.

- Heygo, a London-based live-streaming platform for guided tours, raised $20 million in Series A funding led by Northzone and was joined by investors including Lightspeed Venture Partners, Point 9 Capital, TQ Ventures, and Ascension.

- Reebelo, a Singapore-based refurbished electronic marketplace, raised $20 million in Series A funding. Cathay Innovation and June Fund co-led the round and were joined by investors including FJ Labs, KREAM, Moore Strategic Ventures, French Partners, Gandel Invest, Antler, and Maximilian Bittner.

- Rainbow, an Ethereum wallet used for interacting with web3, DeFi and NFTs, raised $18 million in Series A funding led by Seven Seven Six

- Mundi, a New York-based financial services platform for cross-border trade, raised $16 million in Series A funding led by Union Square Ventures and was joined by investors including Upper90, FJ Labs, Base10 Partners, Exor, AndBank, Alleycorp, Operator Partners, Gilgamesh Ventures, and Monex

- Eyrus, a Washington, DC based jobsite intelligence platform for the construction and oil and gas industries, raised $12 million in Series A funding led by Spring Mountain Capital and was joined by Autodesk, Motley Fool Ventures, and Fuel Venture Capital

- Haul, a San Mateo, Calif.-based on-demand job platform for truck driving, raised $10 million led by B Capital Group and was joined by investors including Hack VC, Next Coast Ventures, Pipeline Capital Partners, RPM Ventures, and Value Chain Ventures

- Encore, a Hermosa Beach, Calif.-based interactive live performance app co-founded by Kid Cudi, raised $9 million in funding led by Battery Ventures and was joined by investors including 468 Capital, Parade Ventures, Nomad Ventures, Moving Capital, Kayak Ventures, and Gaingels.

- Kubernetes Security Operations Center, a San Francisco-based cloud security platform, raised $6 million in seed funding led by .406 Ventures and was joined by investors including Vertex Ventures US and Gula Tech Adventures.

- Passthrough, a Middletown, Del.-based data-driven automated subscription document platform for fund managers and their investors, raised $5 million in seed funding led by Positive Sum

- Trace Finance, a Brazilian fintech startup for streamlined cross-border banking for startups, raised $4.3 million in seed funding led by HOF Capital and was joined by investors including Circle Ventures, Mantis VC, and others.

- SiteKick, a Minneapolis-based AI-powered commercial real estate construction site-monitoring platform, raised $1.2 million in seed funding led by Great North Ventures and was joined by Rice Park Capital Management.

PRIVATE EQUITY

- The Sylvan Group acquired a majority stake in Juniper Biologics, Artemis Health Ventures, DX Imaging, and Juniper Therapeutics, for $140.5 million.

- Blackstone Growth invested more than $100 million in Cloudinary, a Santa Clara, Calif.-based media experience cloud company.

- Bluewave Technology Group acquired Telapprise, a San Jose, Calif.-based technology advisory and expense management firm. Financial terms were not disclosed. 

- NewRocket, a Gryphon Investors portfolio company, acquired Service Stack Technologies, a Maharashtra, India-based IT workflow consulting and delivery services company. Financial terms were not disclosed.

- Repeats Group, an Ara Partners portfolio company, acquired Anviplas, a Navarcles, Spain-based recycled LDPE producer for packaging applications. Financial terms were not disclosed.

- THCP acquired a minority stake in Gorent, an Italian rental company for eco-sustainable vehicles. Financial terms were not disclosed.

- TruArc Partners acquired New Directions Aromatics, a Toronto-based natural ingredients supplier to the cosmetics, health and beauty and personal care markets. Financial terms were not disclosed.

EXITS

- Avista Capital Partners agreed to acquire Probo Medical, a Fishers, Ind.-based ultrasound probe sales and repair services provider, from Varsity Healthcare Partners. Financial terms were not disclosed.

OTHER

- Meta Platforms completed its acquisition of Kustomer, a New York-based CRM platform developer, for approximately $1 billion.

- Fireblocks acquired First Digital, a stablecoin and digital asset payments technology platform, for $100 million, per Reuters.

FUNDS + FUNDS OF FUNDS

- HV Capital, a Munich, Germany-based venture capital firm, raised $489 million for a new continuation fund.

- Hildred Capital Management, a New York-based private equity firm, raised $362.5 million for its first institutional fund.

- Fifth Wall, a Marina Del Rey, Calif.-based venture capital firm, raised $149 million for a new fund focused on European real estate technology.

PEOPLE

- Bain Capital, a Boston-based private equity firm, hired Jennifer Davis, per Bloomberg. She was formerly with Goldman Sachs.

- Bessemer Venture Partners, a Redwood City Calif.-based venture capital firm, hired Navid Oreizy as founding partner of its growth buyout platform, BVP Forge. He was formerly with Serent Capital.

- Task Force X Capital, a Charlotte, N.C.-based venture capital firm, hired Brent Blake as a venture partner.

- Verizon Ventures, the Basking Ridge, N.J.-based corporate venture arm of Verizon, hired Alex Kaufman as principal. Formerly, he was with APA Venture Partners.

- Vestar Capital Partners, a New York-based private equity firm, promoted Kimberly Lu to vice president.

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