Frontline, the Irish venture capital firm’s US division, made an investment in the San Francisco AI startup, which has recently been acquired by Databricks for $1.3bn (€1.2bn).
Frontline, along with other venture firms such as DCVC, AME Cloud Ventures, Lux, Atlas, Playground Global, and Samsung Next, invested a total of $64m in the San Francisco startup. Despite being founded just two years ago and having a small team of 62 employees, the startup attracted significant investments.
MosaicML, the AI startup in question, offers software tools that aim to reduce the costs associated with AI work. Their tools enable businesses to train AI algorithms using large datasets and expensive computer chips more affordably. MosaicML generates revenue by selling these tools to companies looking to develop their own customized AI systems.
The adoption of tools such as large language systems for AI development and training is gaining popularity among major corporations. PWC, for instance, recently announced the deployment of the AI tool Harvey within its legal divisions. This tool automates legal services and processes, leveraging PWC’s own data and even predicts outcomes based on historical data.
Databricks, the acquirer of MosaicML, sells software tools for building AI systems and advocates for open-source models as alternatives to those offered by players like OpenAI and Google.
According to Databricks, the acquisition will combine their AI technology with MosaicML’s language-model platform, enabling businesses to have a “simple, fast way to retain control, security, and ownership over their valuable data without high costs”.
Frontline’s investment in MosaicML yields a substantial return following the release of its annual European Expansion Report. The report provides guidance to US companies on expanding into Europe and highlights London, Dublin, and Amsterdam as increasingly dominant locations for US firms seeking a European base. These three cities account for 90% of US tech firms’ initial European offices.
The report emphasizes the criticality of timely European expansions, citing the higher stakes due to increased capital availability and a strengthening European startup ecosystem. CEOs of high-growth US companies need to carefully consider when to expand to Europe.
The report also reveals that Europe contributes up to 40% of global revenues for “top-performing” US companies during their IPOs.
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