There's been a lot of buzz about generative AI and its impact on business, but if you look behind the hype and high-profile deals like last week's OpenAI-PwC deal, you'll see that the world is already years into using customer-facing no-code AI tools to extract information and do work faster.
Now, one of the earliest entrants in the space, contracting specialist Sirion Labs, is acquiring Eigen Technologies, an enterprise AI pioneer focused on analyzing documents to extract insights and data in industries including insurance, finance and law.
The deal highlights not only the opportunity that comes with growing demand for AI in the B2B market, but also a broader trend in enterprise IT: companies are now opting for simpler one-stop shops for their IT needs rather than multiple point solutions, leading to consolidation between companies building the latter.
Eigen and Sirion haven't disclosed financial terms of the deal, but they have some relevant background information that tells part of the story.
London-based Eigen was led and co-founded by Dr Lewis Liu, a PhD at Oxford University who studied both art and physics. As a student, Liu invented a new X-ray laser, and some of that math was reapplied to the algorithms Eigen built to extract and understand natural language.
What Eigen has been working on for years could be described as generative AI, but that's not the term the company uses. The startup's no-code tool summarizes and extracts meaning from long, unstructured, and complex documents, and Eigen built its own dataset and intelligence engine behind it. The company's product is non-technical and doesn't require a data scientist to implement or use, with typical use cases including basic search, insights, summarization, and compliance purposes.
Eigen has raised just over $80 million to date, with its last publicly disclosed valuation coming in 2019 when it raised $37 million at a price of $170 million. Investors include Goldman Sachs (as a strategic backer) and Dawn Capital.
Liu said that prior to the deal, Eigen “had multiple proposals on the table, including term sheets to continue funding the business.” This could mean Eigen was feeling the pressure — it was nearing the end of its financing run and had to make a choice. But Eigen has a pretty deep client list (it works with big banks and big corporations) and had other acquisition proposals on the table, as well as funding proposals.
Still, in a tough market for startups, funding terms may be even tougher for AI startups at this point, and Sirion appears to be at the top of the list of options.
Liu said the two companies have already partnered on business deals due to differences in how companies buy IT, and that the two appear to have a “shared vision.” Liu will become the company's chief AI officer and lead the new London office.
Sirion, on the other hand, was founded in India and focuses on applying AI to contracts, specifically contract lifecycle management. Its tool is also genAI-esque and, like Eigen, can use conversational queries to search and extract information. On top of that, it also offers AI to parse contracts to ensure users have a clear understanding of the terms, calculate contract totals, and identify potential loopholes. The company is currently building customizations and “small language models” and is also integrating with companies building larger foundational LLM models to enhance its tool.
Sirion’s last round, Series D, was initially funded at $85 million but ultimately closed at $110 million, with backers including Peak XV (formerly Sequoia India) and Tiger Global.
TechCrunch has confirmed that Sirion's current valuation is around $1 billion, a figure the company has not previously disclosed, and that the bulk of its Series D funding is still in the bank. The company says it works with over 250 large enterprises and manages more than 7 million contracts worth $800 billion.
Sirion isn't profitable yet, but it has another year or two of headroom left, depending on the company's ambitions and appetite for acquisitions, which it is considering anyway. CEO and founder Ajay Agrawal said in an interview that the company's primary focus is “technology-led” expansion, not customer acquisition.
“We're going to see a rise in consolidation over the next 18 to 24 months.” [in our space]”And frankly, there's a broad area of AI … that we're going to talk about,” he said.
Meanwhile, we will see upstream M&A in this space as well. A potential buyer could be one of the big record player system providers: SAP is with Icertis, Salesforce is with Ironclad, Oracle is with Sirion. We will see more such partnerships, some of which may ultimately turn into M&A as part of a broader consolidation trend. Watch this space.