DataRobot, Now a Unicorn, Raises Close To $200M for Machine Learning: Sources
[Update: On Sept. 17, DataRobot announced it had raised $206 million in a Series E round led by Sapphire Ventures. It brings the Boston company’s total amount raised to $431 million.]
DataRobot has raised a Series E funding round in the ballpark of $200 million to advance its automated machine learning and artificial intelligence software, according to sources with knowledge of the investment.
The cash infusion comes less than a year after the startup closed its $100 million Series D round led by Palo Alto, CA-based venture firms Meritech Capital and Sapphire Ventures.
DataRobot’s latest round was again led by Sapphire, one source said, and it pushes the company into “unicorn” territory with a valuation of more than $1 billion, the sources said. Sapphire executives could not be reached for comment.
The round holds DataRobot’s spot as one of the Boston area’s biggest enterprise AI bets, as the company has now raised north of $400 million in venture capital.
And that number could soon grow even larger. One of the sources said additional funding is expected to come in and could push the total raised for the latest round to $250 million.
In a statement emailed to Xconomy, the company said, “DataRobot continues to experience significant growth, which is attracting an increased level of interest in the company. If and when we raise funding, we will make a formal announcement.”
News of the funding trickled out last week with a report by a blog associated with the Prime Unicorn Index, an investment index of American “unicorn” companies that is run by Louisiana-based research firm Lagniappe Labs. The blog post reported the Series E round would bring in $220 million for DataRobot.
DataRobot was founded in 2012 by a couple of data scientists who quit their jobs at property casualty insurer Travelers. DataRobot CEO Jeremy Achin was then the insurer’s director of research and modeling, and his DataRobot co-founder Tom de Godoy, now the company’s CTO, was a senior director of research and modeling for the insurance firm.
The machine learning platform DataRobot developed aims to automate much of the valuable data science functions that enterprises are eager to leverage, such as predictive modeling. For example, in banking, the software can be used to automatically assess credit default risk and track fraudulent transactions. In healthcare, it can be used to estimate hospital readmission risk and model hospital capacity, the company says.
Coming by money to expand the data science company hasn’t been much of an issue. DataRobot raised $21 million in its Series A round in 2014, $33 million in its Series B in 2016, $67 million in its Series C in 2017, and the $100 million in last year’s Series D round. After that most recent round, DataRobot said it had raised $225 million in total, including about $3 million in seed investments.
After the last funding round, Achin told Xconomy the strategy behind adding the big pile of cash to its coffers was to maintain its competitiveness as more companies crowd into the enterprise machine learning sector.
“People started chasing,” Achin said last November.
“We need to go faster,” he continued. “What we are sure about is spending on the higher side. Missing that way is a lot safer than spending not enough, given where we are in the market. The worst thing is to take it easy and competitors start to catch up.”