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Canada’s Element AI Raises $151M Series B As Country’s Startup Scene Heats Up

Montreal-based Element AI, which develops artificial intelligence-powered software solutions, announced this morning it has raised US$151.4 million in a massive Series B round.

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Founded in 2016 by a team of six partners including serial entrepreneurs Jean-François (JF) Gagné and A.M. Turing Award winner Yoshua Bengio, Element AI is described by lead investor Caisse de dépôt et placement du Québec (CDPQ) as “a company with a commercial focus that anticipates and creates AI products to address clients’ needs.”

In its own words, Element AI “turns research and industry expertise into software solutions that exponentially learn and improve” and are adapted to specific industries with a primary focus on the financial services and supply chain sectors. Its offering, which includes advisory services, AI-enablement tools and products, aims to help large organizations “operationalize AI and create real business impact.” Customers include LG and National Bank, among others.

The round is notable for several reasons. For one, it marks the second mega venture financing raised by a Canadian startup this month. On Sept. 4, we reported on Canada-based legal tech startup Clio raising a massive $250 million Series D round from TCV and JMI Equity. It’s also a really large Series B, another example of how companies are raising more and more at the so-called “early-stage,” a trend we’ve been following.

Besides CDPQ, new investors in Element AI’s latest round include McKinsey & Company and Gouvernement du Québec. The round also included participation from returning Series A investors, including DCVC (Data Collective), Hanwha Asset Management, BDC Capital, Real Ventures and others. The new financing brings the company’s total venture funding raised so far to roughly $258 million. DCVC led Element AI’s $102 million Series A in June 2017.

In a press release, Element AI CEO Gagné said his company has been able to “operationalize” AI.

“Few companies have been successful at taking proofs-of-concepts out of the lab, imbedding them strategically in their operations, and delivering actual business impact,” he said.

Element AI co-founders

In its press release, Element AI said the company will use the new capital “to fuel global product and services development” while “accelerating the commercialization of AI.” Element AI declined to provide any growth metrics when I asked, but told me that it currently has just under 500 employees across its Montreal headquarters and offices in Toronto; London, Seoul, South Korea, and Singapore.

In general, the AI scene in Canada seems to be heating up. CDPQ invested in the company as part of its recently-formed “CDPQ-AI Fund” aimed at helping speed up the commercialization of AI solutions in Quebec.

The news also comes nine months after McKinsey’s advanced analytics and AI arm, QuantumBlack, launched its first Canadian office in Montreal. The consulting firm acquired QuantumBlack in 2015 and said the company will “spearhead the collaboration” with Element AI on behalf of its firm.

Illustration: Li-Anne Dias

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