Founders Jorge Torres and Adam Carrigan started MindsDB in 2017.
MindsDBThough Bill Gates recently declared the current moment in technology as important as the advent of the PC, storied Silicon Valley firm Benchmark is taking a relatively cautious view of AI's gold rush for now. A “big majority” of startups pitching to partner Chetan Puttagunta claim to be working on machine learning, but, he told Forbes, most haven’t been able to differentiate themselves from their many competitors.
One rare exception: MindsDB, a San Francisco Bay Area-based startup that helps developers build AI applications even if they lack AI expertise. It announced Tuesday a $16.5 million Series A investment led by Benchmark, with Puttagunta joining its board of directors. The round comes at a valuation of $56 million, the company said.
Cofounder and CEO Jorge Torres is betting that AI’s moment to transform the business world has finally come. “I think there’s going to be a rebirth of a new generation of applications”—from email to CRMs—“designed with AI capabilities at the core,” he told Forbes.
Historically, companies have called upon their data teams to handle the time-consuming task of rigging up connections between their business data (stored in databases) and machine learning tech, say, an application that detects fraud or predicts patients’ health outcomes. MindsDB wants to inject the AI functionality directly into the database so that developers can do the work themselves. Torres launched the company in 2017 alongside Adam Carrigan, the company’s chief operating officer, who he met when they were students at the Australian National University. They initially built MindsDB as an entirely open-source project before launching paid services in late 2020. In 2021, Forbes named it to the annual AI 50 list.
While MindsDB gradually piqued developers’ interest, it wasn’t often seen as business-critical. So far, Torres says, about 20 companies are paying for its paid version. Like most other startups that begin open sourced, it now must figure out how to commercialize. Annualized revenue has not yet hit $1 million, Carrigan says.
We believe that developers will be the next machine learning engineers without calling themselves machine learning engineers.
But as new AI models flood the market—in particular, flashy tools like GPT-3 that anyone can try out—Puttagunta thinks MindsDB is well positioned to capitalize. “It was one thing when sophisticated developers were saying, ‘We need to use machine learning,’” he says. “Now, their boss and their boss’ boss are saying, ‘I saw this cool demo. Shouldn’t we be doing that?' You no longer have to convince three levels up that machine learning is a useful technology.”
All of a sudden, data teams could no longer keep up with the workload necessary to hook up different AI capabilities to their database. As Puttagunta puts it: “If you’re a large company, it's not like you can go hire a team of 1,000 data scientists tomorrow.” MindsDB, its founders think, can fill the gap by solving the bottleneck with existing staff instead. “We believe that developers will be the next machine learning engineers without calling themselves machine learning engineers,” Torres says.
Benchmark believes MindsDB stands out in the noisy AI startup space for its more than 70 integrations between an array of databases and AI—including newly announced ones to Hugging Face’s open-source library and OpenAI offerings like GPT-3 and and DALL-E. “They saw [the problem] earlier, and now the technology is just more sophisticated,” Puttagunta says, comparing MindsDB’s germinal years to the first five years of Amazon Web Services, when it quietly accumulated a product edge before cloud computing attracted fanfare.
Both sides agreed to the fundraise last November, as AI adoption in the enterprise began to have its breakout moment. The capital injection is meant to fuel commercialization efforts, Carrigan says. MindsDB currently employs 22 people and hopes to approach 40 by year’s end. It is confidentially working with some big-name customers, Carrigan claims, including a top-five bank, and one of the world’s largest electronics makers: “They may have, say, 300 machine learning engineers, but 10,000 developers. Now suddenly those developers can do machine learning, too.”
MindsDB also wants to attract as customers a new crop of smaller, AI-native startups. “Take Salesforce,” Torres said. “I don’t want to say that Salesforce will end, but I guarantee that in the next year or two, there’s going to be 100 youngsters working out of their garage with an approach to CRM that’s designed from the ground up with AI.”
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