Hello there,
While PreSeed Now is primarily about startups that are currently raising pre-seed funding, sometimes I’ll cover those that have recently raised.
There are plenty of seed- and later-stage investors already subscribed to this newsletter (hello!), so it’s useful for them to see what’s coming down the pipe. But it’s also useful for those in the pre-seed space (including founders) to see what’s getting investment, and who’s investing.
Sometimes I might interview a startup but they close their round before I have a chance to publish. That’s the case with today’s startup - Enzai. Scroll down to read all about them.
Enzai are addressing an important area, the regulation A.I. companies will need to comply with as governments around the world get their acts together about keeping tabs on tech. More broadly, I think there’s an opportunity for ‘compliance in a box’ startups. The complex mesh of laws covering tech startups is only going to get harder to navigate, so offerings that make that easy will be increasingly appealing.
Meanwhile, in an upcoming issue I’d love to feature your thoughts on how the emerging crisis in tech on the public markets we’re currently seeing will affect pre-seed.
Late-stage hyper-investors Tiger Global and SoftBank’s losses in the news this week feel like a sobering moment. But several tech giants of today were started during past downturns, so I’m not at all concerned I’ll run out of things to cover at the raw, early-stage end of startup building. Hit reply to this email to drop me a line with your thoughts.
— Martin
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💸 Recently raised
I’ll sometimes flag up interesting recently completed rounds, such as this one…
MyMynd has today announced a £650,000 pre-seed round. This workplace mental health and wellbeing platform is already being used by the NHS. Triple Point Ventures has put money in, alongside angels such as Andrew Nadin, Southeastern Grocer’s Chief Customer and Digital Officer; Maurice Abboudi, serial hospitality entrepreneur and investor on BBC 2’s ‘My Million Pound Menu’; and Will Jones, founder of online bookshop Wordery.
Enzai wants to help the A.I. industry embrace regulation
I recently stumbled upon a horrifying article from Nature about how A.I. designed to develop new medicines could just as easily be used to create deadlier chemical weapons. That’s just one example of why the ethics of A.I. go hand-in-hand with its development. From racist chatbots to police facial recognition misidentifying suspects, how we implement A.I. is just as important as whether we build it in the first place.
Some lawmakers recognise this - and so do some entrepreneurs. Last year, European Commission proposals for regulating A.I. caught the attention of a lawyer called Ryan Donnelly. Having spent years advising on GDPR issues, he realised that similar rules around building and implementing A.I. could become a huge weight on businesses in the future. Having had a years-long yearning to launch his own tech startup, Donnelly’s stars had at last aligned and he began work on what would become Enzai.
Enzai currently describes itself to customers as “a lifecycle management system for A.I.”, betting that this is exactly what will be incredibly useful to all kinds of businesses as A.I. regulation eventually rolls out around the world. Even before that happens, Enzai’s founders think development teams could benefit from better documentation for their A.I. projects.
Keeping tabs on A.I. as it’s developed
Donnelly and his co-founder, software developer and serial entrepreneur Jack Carlisle, are currently building Enzai from their base in Belfast. It combines automated data collection with information entered by humans to create standardised reports for different audiences. This could include regulators, but could also help A.I. development teams share details of what they’re building with less technical members of staff.
“We're trying to document the entire lifecycle from start to finish,” says Donnelly. “Everything from the very first time anyone ever mentions A.I. in a room and someone thinks ‘right, we've got to sit down and maybe devise a bit of a product charter here and work out what we're actually trying to achieve with this product.’”
Donnelly says there's value in documenting every part of the A.I. development lifecycle. “The data, and going into detail on how your data sets are constructed and prepared… the weight that is applied to features by the model, what type of model you’re using, what system are you running it on, which versions of the library are you using—which is becoming weirdly important with so many different updates—and then.. where are you deploying this, what does that deployment environment look like? Is it realistic to use a deployment environment like that…? All these kinds of different considerations that are at the moment happening very much at the code level.”
Donnelly explains that the excitement of building a cutting edge A.I. product can mean algorithms aren’t as well documented as they should be. And coming from a legal background, he knows the importance of being able to translate complex specialist knowledge into a more accessible format. Experts who could offer valuable input into an A.I.'s development can end up excluded if they don’t come from a data science or machine learning background and thus find the algorithms and data sets impenetrable.
While it might be nice to think that a documentation product for A.I. could be entirely automated, Donnelly says the involvement of human input isn’t simply a workaround for failings in automation - it’s an essential part of the system. “Anyone that tells you that they can automate all these problems away has clearly never spent much time studying ethical issues and how to address them, because that's just not going to work.”
While Enzai will be available as a cloud platform, Donnelly says an on-premises installation option will be important too. “We’re conscious that we will be storing some incredibly valuable IP in our systems, [so] security is going to be at the forefront… we're going to get all the certifications that we need, and make sure that we build our product in a really robust and secure way.”
Building the market
Rather than wait for regulation from governments to kick in, Enzai is starting out by targeting heavily regulated industries that could benefit from better documentation right now.
Donnelly gives the example of financial services. “Challenger banks [operate] in a very regulated industry... where the big incumbents have been in place for many, many years. They're trying to show they can be a similar quality to those existing banks to try and get their own banking licences to be able to do it. They've got a real driver to make sure that they're cleaner than clean, and they're the most forward thinking about these kinds of regulations and the risks involved. Things like that reflect very well on them. So we think they're going to be our first customer base.”
Enzai isn’t alone in addressing the field of A.I. safety and ethics. Donnelly sees Silicon Valley-based Credo AI, which bills itself as “an end-to-end governance platform for managing compliance and measuring risk for your A.I. deployments at scale”, as his closest competition. Although Credo AI has already raised a $5.5m Seed round, this is very much an emerging field with plenty of space for multiple players addressing different aspects markets and approaches.
“A place that makes you happy”
A.I. is a particular strength among UK startups at the moment, with a particular focus on London and the South East, so why is Enzai based in Belfast? Donnelly, who originally hails from Northern Ireland, says it was a conscious decision. He and Carlisle were both based in London but decided to head across the Irish sea to launch their company.
Aside from the obvious ‘you could run a startup from anywhere with modern tech so you might as well do it somewhere cheaper than London’ angle, Donnelly says Belfast is really starting to prove itself as a home for startups. He says Overwatch Research’s recent exit has generated a lot of buzz in the city, while Ormeau Baths has proven itself a useful hub for the startup community in recent years.
It’s too soon to say whether Enzai will see any advantage from Northern Ireland’s unique position within the UK in relation to access to the EU market post-Brexit (especially now), but Donnelly says it’s ultimately about being in the right place for your own circumstances.
“My advice to other people is go to a place that makes you happy, because if you feel happy and content you're more likely to build a better company.”
In five years’ time…
Enzai is currently taking part in the Ignite NI accelerator programme, and Donnelly says the company has just completed a pre-seed round as it prepares to bring its product to market. He sees a clear path to the company becoming an indispensable part of A.I. development.
“In five years’ time, I very much see us being the go-to regulatory tool for all artificial intelligence startup applications. If you ever need any sort of regulatory assistance with your A.I. product, we’ll be the first port of call… I see this as being an exponentially big market. And the reason for that is that artificial intelligence is, as of today, the worst it's ever going to be. It's only going to get better. It’s going to be better tomorrow. It's going to be better next week. It’s going to be better next month and next year.
“The amount that all these complex algorithms are already filtered into our lives without us even really knowing it is staggering, and they're only going to get more powerful. And with that, the risks attached to those systems are only going to increase.”
Over the past two decades, the world embraced social media without enough thought to how it could be misused, and the unintended consequences it could unleash. Governments around the world are only just starting to address those ill effects through legislation now, when plenty of damage has already been done. If startups like Enzai get their way, we might just avoid a similar situation with A.I.
That’s all for now
PreSeed Now will be back on Tuesday with another fascinating startup. Know a team building something great? Put me in touch. Just drop me a line: martin@preseednow.com
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