Articul8, an enterprise AI company spun out of Intel in early 2024, aims to capitalize on the growing demand for AI systems in regulated industries and has secured more than half of a planned $70 million funding round at a pre-money valuation of $500 million, according to its CEO.
The Series B funding round is structured in two parts, with the first being led by Spain’s Adara Ventures, Articul8 founder and CEO Arun K. Subramaniyan (pictured above, center) said in an interview. He declined to disclose the initial investment amount, but said the company expects to close the funding in the first quarter of this year.
The valuation of Articul8’s current funding round represents an approximately 5x increase from the company’s post-money Series A valuation of $100 million in January 2024. Since then, the Santa Clara-based company announced more than $90 million in total commitments (the cumulative value of all customer contracts signed) from 29 paying customers, including Hitachi Energy, AWS, Franklin Templeton and Intel.
Subramanyan told TechCrunch that Articul8 is not under pressure to raise capital and that the company’s revenue is positive after a series of big corporate deals.
“We’re not cash-strapped,” he says.
Subramanyan said the company expects to end the year with just over $57 million in annual recurring revenue, about 45% to 50% of which has already been recognized.
Rather than relying on shared, generic models, Articul8 develops specialized AI systems that operate within a customer’s unique IT environment. Rather than selling standalone models, the company packages its technology as software applications and AI agents for specific business functions, targeting regulated industries such as energy, manufacturing, aerospace, financial services, and semiconductors where accuracy, auditability, and data management are critical.
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“Our competition is almost everyone,” Subramanyan said. “But today, the main competitors are cloud service providers because they have realized that their model is all commodity, one-size-fits-all (products).”
He added that Articul8’s focus on specialized systems is appealing to customers who require predictable results and a clear audit trail, which is difficult to achieve with general-purpose models running on shared cloud platforms.
Articul8 plans to use the Series B proceeds primarily to expand research and product development, and expand its business internationally, with a focus on Europe and parts of Asia.
Adara Ventures’ participation will help accelerate European expansion plans as the European Investment Fund backs the Madrid-based VC firm’s Energy Fund, Subramanyan said. He noted that the company is also aiming to expand into markets including Japan and South Korea, where it has begun working with large enterprise customers.
India’s Aditya Birla Ventures also participated in the ongoing round, Subramaniyan said.
Articul8 works with large technology groups, including Nvidia and Google Cloud, Subramaniyan said, adding that Amazon Web Services is both a customer of the company and a partner in some deployments.
The company employs 75 people, approximately 80% focused on research and development, with teams spread across the United States, Brazil, and India.
