With Launch of Dynam.AI, Analytics Ventures Shifts to New Model

The debut Wednesday of Dynam.AI, a San Diego startup offering its expertise in artificial intelligence, also marks a shift that has been underway for the past year or so at Analytics Ventures, a local fund that invests in tech deals.

The small venture firm, which made traditional seed investments in a number of startups, including the healthtech companies CureMetrix and CureMatch, has evolved into a venture studio, according to managing partner Andreas Roell. As a venture studio, Roell said Analytics Ventures operates as more of a startup ecosystem, with the firm’s principals starting and growing their own companies in-house and providing business services for all.

Dynam.AI, which has developed a suite of AI algorithms and related software tools for business, represents the first in what Roell indicated would be a series of home-grown companies to roll out under the new business model. If all goes as planned, Roell said Analytics Ventures would unveil five more startups in coming months. In the future, the team plans to move each new company from concept to market validation in six months.

“We’re providing the end-to-end infrastructure for building companies from scratch—everything from back office [human resources] solutions and operations, all the way into our in-house AI lab, with 15 AI scientists we’ve been able to gather from around the world,” Roell said. “Our focus, as you know, is on artificial intelligence. So all of our ventures have AI as a key component of the venture.”

Artificial intelligence is not just “a nice-to-have” feature, Roell said. “It’s really sitting at the core, crux of our business.”

In describing their studio model, Roell said Analytics Ventures has moved into a building in San Diego’s Sorrento Mesa that was once occupied by WebSideStory, the analytics company founded in 1996 by Blaise Barrelet, who also founded Analytics Ventures. (Web Side Story went public in 2004, changed its name to Visual Sciences, and was acquired by Omniture for almost $400 million in 2008.)

The investment firm has brought together many of its startups in the Sorrento Mesa building, and “our entire ecosystem is 73 people now,” Roell said.

The decision to follow a venture studio model grew out of numerous requests from companies and institutions throughout the region “to be able to take advantage of our AI,” Roell said.

Dynam.AI was a direct outgrowth of that demand. Analytics Ventures started the company about 18 months ago. Now headed by Dave Ferrell, Roell said the company offers its proprietary technology through paid engagements, which enables the Dynam.AI team to customize their algorithms for each customer’s needs. Dynam.AI also can provide its technology as a Web-based “artificial intelligence as a service.”

In a statement Wednesday, Analytics Ventures said: “Dynam.AI offers organizations the ability to solve real-world business problems in the areas of prediction, forecasting, detection, and recommendations. Common applications where these algorithms have shown superior results include pricing and inventory optimization, forecasting resource requirements or market trends, and maximizing customer conversions. Detection capabilities enable early identification of machine failures or maintenance needs, behavioral risk, non-compliance behaviors, and reinforcement learning for process control and optimization. The recommendation engine provides businesses, such as online content publishers or advertisers, a competitive advantage by optimizing content, incentives, and other user-focused offers such as maintenance plans.”

Roell, who was a digital marketing executive before joining Analytics Ventures in 2015, said he is heavily engaged on the operational side of the venture studio while another managing partner, Navid Alipour, is handling external relations. Analytic Ventures would invest, on average, about $1.5 million in seed funding in the companies that move forward, Roell said. When asked if that figure was hypothetical, he replied, “It’s hypothetical from the point of view that I’ve got budgets, and I’m trying to execute around that.”

Barrelet, who told me last year he had chronic lymphocytic leukemia, is not as involved in the effort, Roell said. Barrelet also is no longer identified as the CEO of CureMatch. “He’s been working hard at getting healthy,” Roell said.

Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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