While deep learning has demonstrated its ability to understand unstructured data in recent years, data tooling has yet to catch up. Despite the emergence of new tools, implementing and deploying an effective AI solution in an organization’s data stack remains extremely expensive and complex.
Building in-house AI solutions necessitates significant investment and requires multifunctional teams. As a result, only large enterprises with ample resources can successfully develop proprietary functionalities and components to process unstructured data and then distil business insights or deliver AI applications.
Kelvin Lee, CEO and Co-Founder of Alta discusses how alternative investment has grown in Southeast Asia
To help solve this, Instill AI just recently received $3.6M in a seed round, led by venture capital firm RTP Global and supported by Lunar Ventures and returning investor Hive Ventures. The funding is aimed at helping the startup build on its mission to help organizations extract untapped value from unstructured data, by making AI more accessible to companies of all sizes.
To learn more about the future of the funding landscape in the region, as well as the focus on the venture capital world, we spoke to Yan Lee, Founder and Managing Partner, Hive Ventures. Here’s what he had to share.
Congrats on your latest investment in InstillAI. Could you elaborate on the potential of the company and how you see them growing?
Thank you. This is our second investment in the company with the first as a lead investor in the Pre Seed round. As a VC, we have always believed in the company’s mission of making AI more accessible to everyone. Despite remarkable advances in AI over the past few years, there are still significant barriers preventing many individuals and businesses from enjoying the benefits of AI. One major barrier is the difficulty in collecting, processing, and harnessing the value of unstructured data, including Video and text. Especially in an age where Generative AI in the form of ChatGPT (text) and Midjourney, Stable Diffusion (images) have taken center stage even with the masses, the ability to maintain a strong data pipeline in the process will set top players apart from the rest in terms of efficiency.
Instill AI addresses this issue by providing tools that streamline the process of extracting value from unstructured data, benefiting all-size organizations. Their user-friendly platform and pre-built templates make it easier for users to develop AI models without extensive technical skills.
As more companies learn about the benefits of AI, especially with all the chatter around ChatGPT and Stable Diffusion, they will start to look for solutions that can help them leverage this technology. This will increase demand for platforms like Instill AI, which offer accessible and user-friendly tools for developing and deploying AI models.
What are some of the criteria you look at when making investments?
We seek outstanding teams with a passion and unique perspective to solve big problems. Instill AI was founded by seasoned entrepreneurs in the space of Data Engineering and Vision AI. Their experience and expertise have proven to be essential in building a business in the space, and democratizing AI for next generation businesses and consumers.
What industries do you believe will show growth over the next 12-24 months in Southeast Asia?
With many AI technologies realizing in just the first two months of 2023, the AI sector will definitely see a rise in development, implementation and competition. With the industry already valuing at US$328.34 billion, its potential for tremendous growth and ability to revolutionize existing industries proves AI will become one of the driving factors of economic growth. The AI industry is already realising its growth with various AI technologies announced globally that are slowly integrating their way into the daily lives of corporate functions and the general populace.
Specifically, applications into Digital Transformation to uplift efficiencies and growth opportunities for the manufacturing, finance, logistics and retail sectors should see continuous growth as ASEAN seeks to come back stronger after the pandemic. Technologies that increase operational efficiencies, better predict business trends and anomalies as well as automate processes will start seeing greater adoption across the region.
While blockchain had a rough 2022, with cryptocurrency plummeting some 60%, cryptocurrency is believed to be able to make a comeback with the maturing technology and the companies envisioning the benefits. We also anticipate a growth in Non-Fungible Tokens (NFTs) expanding beyond the primary function as a tool for acquiring ownership of a digital object on the blockchain. NFTs may become more personalized and nuanced where they would represent the tangible certificates and documents, intangible units or physical cash generating assets. It could also be used as an advanced form of digital identification through forms such as Soul Bound Tokens (SBTs).
What is your investment outlook for 2023?
We are starting to see the bottom of startup funding activity and velocity around the world, and we believe the space will start to see a rebound in the second quarter of the year. While most startups will still find it challenging to raise capital, VC funds around the world are still at historical high levels of dry powder, seeking investments into businesses that can weather the harsh climate. We look forward to the coming months as we start to see the light at the end of the tunnel.
What’s next for Hive Ventures?
We are actively engaging in conversations with ecosystem partners across Asia, from Japan to Southeast Asia, to expand our footprint to other markets and support startups in the space with our experience and methodologies. Simultaneously, we are also looking at new ways to strengthen our offering and support to startups. By building a stronger infrastructure of support to help founders catapult their ventures towards strong growth, we hope to co-create a strong playbook for success with our founders and the startup ecosystem across Asia.