Artificial Intelligence startup H2O.ai has been witnessing an unexpected surge in interest as applications based on AI are becoming more ubiquitous. There are firms beyond tech companies that are willing to get the AI platform for their services. H2O.ai has developed an open-source framework and proprietary apps. This helps almost all kinds of businesses to develop and operate artificial intelligence-based services. The California-based startup has now raised USD 100 million in fresh series of funding. The firm is hopeful that this funding will help fuel its growth further. In this round of funding, the startup was valued at USD 1.7 billion post-money and USD 1.6 billion pre-money. The Commonwealth Bank of Australia (CBA) was leading this Series E round funding. The bank has been a customer of the firm and hopes that this backing will start a deeper partnership between the two. However, this is not the first time when a customer of the startup has led the round as a strategic backer. It was Goldman Sachs that had led its Series D funding of USD 72.5 million. This clearly shows how popular H2O.ai is getting and what all it is capable of doing. Since the Series D round, the valuation of H2O has leapfrogged. It was reportedly valued at USD 400 million at that time and now it is well above USD 1.7 billion. The AI startup has managed to raise more and USD 246 million so far. Also, it is notable that both of the last rounds were led by big banks and both of them are customers of the startup. This also speaks a lot about where H2O.ai has opportunities in the future.
The CBA is looking forward to building new services in the long run. Other firms that were part of this round of funding include Goldman Sachs, Celesta Capital, Crane Venture Partners, and Pivot Investment Partners. With the latest funding, H2O.ai plans to hire more talent who will help the company to expand its H2O.ai Hybrid Cloud platform. The startup will also try utilizing the fund for building more products. H2O.ai founder and CEO Sri Ambati have been quoted by a report as saying that around 40 percent of the total revenue that the startup generates is from the world of financial services. However, this is a very wide sector. “Retail banking, payments, credit cards, payment platforms like PayPal and MasterCard. They are all customers of H2O.ai,” Ambati said. There are also companies that are working in the equities market. He said that Franklin Templeton and MarektAxess are some of the strong customers of the startup. He added that the startup is getting customers from other verticals as well. Companies like Reckitt P&G and Unilever are some of the consumer goods companies. Other verticals like food services, logistics, and delivery are also taking the help of the startup. According to Sri Ambati, the coronavirus pandemic played a great role in the growth of H2O.ai.
“Manufacturing became a fast-growing vertical for us after the pandemic. This is because the Covid-19 pandemic disrupted the supply chains. Also, H2O.ai launched H2O AI Health to assist hospitals and health care service providers like Aetna,” he said. The startup is now working more closely with other tech companies that are interested in building more AI in their own workflows so that they can provide services in a better manner to their own customers. The open-source component offered by the startup since its early days now has more than 20,000 users. The component is simply called H2O. The reason behind this popularity, according to H2O.ai, is its flexibility. “The open-source platform that we offer gives freedom and ability to our customers so that they can develop their own AI centers according to their need We are simply like the Tenzing Sherpas of the Artificial Intelligence mountains and we are helping our customers to conquer the peaks of Artificial Intelligence.” Artificial Intelligence is considered to be the future of the world of enterprise. Over the course of time, AI can help companies to save billions of dollars. H2O.ai is not the only startup that is working on AI. However, it seems to have done its task more successfully.