Arize AI Raises $38-Million Series B
The news is that Arize AI, a Foundation Capital portfolio company, has raised a $38 million Series B, led by TCV. It’s the largest round ever raised by an AI observability platform. I’m thrilled for the Arize team and also very proud to say that Foundation wrote the first check into the company, back in 2020. When we led the initial investment into the company, it was a time of great uncertainty — the pandemic just beginning and many investors were taking cover — but we were undaunted with regards to Arize because of our conviction in two things: the machine learning and data infrastructure market and the Arize founders’ vision.
We’ve been investing in ML/AI for the past decade. Our longstanding thesis at Foundation Capital is that enterprises will be driven to integrate automation into nearly every business function. Most of these efforts are devoted to the first two stages of the machine learning workflow: data preparation and model building. But AI is only as good as the data it’s given and the models human beings create, which means it’s just as prone to making mistakes as anything else human-made is. It’s not a “set it and forget it” technology, especially when deployed in production across an enterprise, but it’s been treated that way, with engineers lacking observability into AI/ML in process and dealing with issues after the fact. As an investor in DataBricks and Eightfold, this was a problem of which I was sharply aware.
Meanwhile, Arize’s cofounders Jason Lopatecki and Aparna Dhinakaran recognized the problem while at TubeMogul and Uber, respectively. As innate problem-solvers, they each independently started exploring a solution to the challenges of working with AI/ML at scale. As a team, they’ve brought laser-focus to those challenges and to the Arize solution: a vertical observability platform that allows engineers and enterprises to watch AI processes, address issues in real time, and give feedback on AI/ML performance. Arize is the missing piece to making ML usable at scale in large businesses.
Speaking of observability, I’ve been privy to Arize’s development since before its inception. I’ve known Jason since 2010, when I invested in TubeMogul, a video-advertising software company, which he cofounded with Brett Wilson. When he told me he wanted to start another company, I worked with him to hone the concept, helped him recruit Aparna and other founding engineers, and then made the first investment in March of 2020. So it’s hard for me to put into words the pride and excitement I feel for what the team has accomplished.
CTOs at Fortune 500 enterprises all feel the pain and acknowledge the problem that Arize AI solves for. Which is why companies that include Uber, Spotify, Adobe, Ebay, Etsy, Instacart, Chime, Neustar, Nextdoor, New York Life, Stitch Fix, and more already use Arize AI to track hundreds of billions of predictions each month. Engineering teams now have a streamlined troubleshooting solution where they can also find analytics for model performance management, drift detection, data quality checks, and model validation. In just two years since its initial launch, the company has become a breakout in the AI/ML landscape, with a product that is far ahead of the competition, best-in-class AI companies as customers, and a significant head start on becoming the leader in its category.
Congratulations to Jason, Aparna, and the entire Arize team on this milestone. I speak for all of my partners at Foundation Capital when I say, we can’t wait to see what comes next!