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Aflorithmic nabs $1.3M for AI-driven personalized audio-as-a-service

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London and Barcelona based audio-as-a-service SaaS startup Aflorithmic has scooped up $1.3 million in seed funding from Crowd Media Holdings, an Australia-based company focused on influencer-based ‘social commerce’ and marketing.

It’s taking a 10% stake in Aflorithmic, per a press release, where it says the strategic investment is aimed at enabling it to offer FaceTime conversations with celebrities through “best-in-class voice cloning technology”.

Two year old Aflorithmic may not have chosen a name that trips off the tongue but it’s all about speech and audio. It’s built a platform that offers fully automated, scalable audio production by using AI-driven synthetic media, (“ethical”) voice cloning, and audio mastering — which can be delivered to people’s ears via websites, mobile apps, smart speakers and so on via its APIs.

“Text in beautiful audio out” is its pithy slogan. Prior to the seed round it says it had taken in more than $887k in external capital, including via an oversubscribed pre-seed/FFF/angel round after bootstrapping for the first 10 months.

Sample clips on its website illustrate the personalization element with synthesized (robot-voiced) voice overs greeting a named customer before plunging into the detail of whatever content it’s been programmed to deliver.

Some of Aflorithmic’s current (proof of concept/pilot) customers are using its tools to create audio books for kids, for personalized narration of wellness/nutrition programs and even a robot butler concierge service for hotel guests. Its business thesis is that demand for audio far outstrips the ability of studio-produced human-spoken voiceovers to deliver.

Hence it reckons synthesized media will be needed to plug the demand gap — serving up infinite permutations of a voice track, each one personalized to a particular customer of the brand or enterprise. For now it’s working on around 10 projects with early beta customers, focused on the edtech, martech and health & fitness sectors.

At the same time, the popularity of podcasts and live-voice streaming shows no sign of abating — speaking to the staying power of audio in a video-heavy era.

Aflorithmic’s new investor, Crowd Media Holdings, has rather more ambitious designs on what its tools can help it do — and talks about ‘completely reshaping the way consumers engage in ecommerce’.

The specific driver for its investment in Aflorithmic (aka ALFR) is a plan to blend synthesized voice with video to let fans engage in “immersive” video chats with simulated versions of their favorite celebrities.

Taking a stake in the audio startup to partner on that project helps it de-risk that plan, it said.

“ALFR brings the audio tech that will replicate a celebrity’s accent, tone and mannerisms as if the celebrity were on the other end of a call,” Crowd Media writes, noting that “the actual content” the (future) cloned celebrity will sweetly whisper to your face will be “driven by” its own AI-driven chatbot technology — based on drawing on a knowledge base of answers built up from responding to more than 180M user-submitted questions (“via text-only mediums”).

Turning all that text into soothing synthesized voice is where Aflorithmic comes in. While the video piece of the cloned celebrity plan entails 3D imaging — with the tech for that being provided by three other synthetic media firms (UK-based Forever Holdings, digital human makers Zoe01 and Uneeq).

More broadly, Crowd Media says it will be integrating Aflorithmic’s technology into other of its social commerce applications, including its AI-driven chatbot (CM8) — which is targeted at customer service use cases across sectors like marketing, education, and health sectors.

For its part, Aflorithmic says it will be using the new funding for R&D for its API audio-production engine, voice cloning, and talent acquisition.

It offers its API-based audio-as-a-service to a range of customers — noting use-cases such as “hyper-personalized newsletters and podcasts” and voice cloning for marketing applications.

It also touts a “vast” voice library for customers to choose a robot speaker. But it also lets them record a snippet of their own voice to create personalized audio content through its voice cloning AI.

“Users can compose professional-quality pieces including music and complex audio engineering, then deliver the final product to any device or platform such as websites, mobile apps, or smart speakers — all without any previous production experience,” it writes.

Commenting on the funding in a statement, Timo Kunz, co-founder, and CEO at Aflorithmic, said: “We are excited to learn from Crowd’s experience in empowering companies to reach mass markets, and are pleased to accompany them as they define the future of social commerce. We believe audio creation as we know it is making way for automated, scalable, dynamic audio experiences — and companies like ours are at the forefront.”

“Synthetic audio production has a seemingly endless range of functions — the potential within marketing applications alone is mindblowing,” he added. “Imagine Kim Kardashian being a personal shopper for each of her 200M followers, or Lewis Hamilton explaining why YOU personally need the new Pirelli P Zero Rosso. All of this is just around the corner with our tech.”

On the business model he also told us: “We use a SaaS model similar to Twilio or Messagebird. There is a baseline monthly subscription based on usage, i.e audio tracks played. On top of that, we charge a fixed sum for cloning a voice. However, we also offer a free tier. For larger collaborations that have a heavy R&D aspect we will negotiate a custom price.”

Alforithmic’s other two co-founders are Peadar Coyle and Björn Ühss.

The startup’s claim of “ethical” voice cloning points to the challenges inherent for all companies working on  commercial tools to power the production of synthesized media.

While a cloned celebrity might just sound like a bit of fun, there is huge potential for misuse and abuse via individual voice cloning — from phishing scams and identity theft to emotional manipulation and blackmail. Copyright is another consideration.

In an ethics section of its website Alforithmic offers a brief nod to the risks in “making personalized audio scalable”. “With great innovation comes great responsibility,” it writes, adding: “We are committed to ethical, fair, transparent AI following the UK´s and European Union’s Ethics Guidelines for Trustworthy Artificial Intelligence. All our work and voice models and algorithms are only trained on and with the full compliance and approval of the individual data owner.”

Responding to questions about how it prevents misuse of its voice cloning tech, Kunz told TechCrunch: “This is a huge point. We thought about the ethics of synthetic audio very early and security is something we take very seriously and plays a key role in our early discussions with potential customers. We treat voice data like sensitive personal information and with the same care. All customer voices we clone need to give us written consent from the original speaker and we have a close look at how they use it — especially in the early stages.

“Also, our API infrastructure is securely designed to only allow access to paying customers, who have been onboarded and vetted by our team.”

“We purposefully don’t ride the Deep Fake wave,” he added. “Not only does it have negative connotations, but it’s also not purposeful use of the technology.”

On the competitive front, the startup points to Descript, which raised a $30M round just last month — and acquired another voice cloning startup, Lyrebird, back in 2019 — although its tools cover both video and audio vs Alforithmic being more fully focused on automating the entire audio production process.

“Descript is positioning itself more as a creator tool, which is great and they are doing fantastic. However, they don’t cover the full production process from text to speech, over music and sound editing to post-production. We think automating this process is a big deal. Taking audio production to the cloud allows for economies of scale and you can create a different audio track for every listener,” said Kunz.

“While Descript focuses on a sort of ‘studio’ as a ‘Photoshop for voice’ to make editing easy, we see ourselves more as a ‘Stripe for Audio’ making it very easy for companies to integrate Audio-As-A-Service into their products through our API instead of ‘just editing’.

“If you use health apps like Peloton as an example, this would allow them to create highly personalized workouts very easily. They could bring a hyper-personalized AI Coach into the workout who would help motivate users to give more and feel like there is a personal trainer next to them that offers motivation based on their previous workout data, personal bests etc.”

“Regarding video, that was a deliberate choice,” he added. “Audio is very personal and getting the nuances right is very complex and hard. We do collaborate with more than one AI video platform though, providing the audio for them because they found out by hard how challenging synthetic audio can be.”

This report was updated with additional comment from Alforithmic

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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UK challenger bank Starling raises $376M, now valued at $1.9B

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Challenger banks continue to see huge infusions of cash from investors bullish on the opportunity for smaller and faster-moving tech-based banking startups to woo customers from their larger rivals. In the latest development, UK-based Starling announced that is has closed £272 million ($376 million at current rates), at a pre-money valuation of £1.1 billion.

This means that the round, a Series D, values the company at £1.372 billion ($1.9 billion) post-money.

Starling — which competes against incumbent banks, as well as other challengers like Monzo and Revolut — said it will be using the money to continue its growth. The bank is already profitable. In updated financials posted today, Starling said it generated revenue of £12 million ($16.6 million) in January of this year, up 400% compared to a year ago, with an annualized revenue run rate of £145 million. It posted operating profits for a fourth consecutive month, and net income currently exceeds £1.5 million per month.

Starling, founded in 2017, has now pased 2 million accounts, with 300,000 business accounts among them. It’s not clear how many of those accounts are active: the figures are for opened accounts, Starling said. Gross lending has passed £2 billion, with deposits at £5.4 billion.

Starling said it plans to use the funding both to expand its lending operations in the UK, to expand into other parts of Europe, and make some strategic acquisitions.

“Digital banking has reached a tipping point,” said Anne Boden, founder and CEO of Starling Bank, in a statement. “Customers now expect a fairer, smarter and more human alternative to the banks of the past and that is what we are giving them at Starling as we continue to grow and add new products and services. Our new investors will bring a wealth of experience as we enter the next stage of growth, while the continued support of our existing backers represents a huge vote of confidence.”

The round is being led by Fidelity Management & Research Company, with Qatar Investment Authority (QIA); RPMI Railpen (Railpen), the investment manager for the £31 billion Railways Pension Scheme; and global investment firm Millennium Management also participating, and it comes on the heels of us reporting in November that it was raising at least £200 million.

The funding comes at a critical time in consumer banking. The trend in the UK — the market where Starling is active — for the last several year has been a gradual shift to online and mobile banking, with those trends rapidly accelerating in the last year of lock-downs and enforced social distancing to slow down the spread of Covid-19.

Challenger (neo) banks have been some of the biggest winners of evolving consumer habits. Using rails provided as white-label services by way of APIs from banking infrastructure providers (another startup category in itself with companies like Rapyd, Plaid, Mambu, CurrencyCloud and others all involved) they will offer the same basic services such as checking and deposit, but they will typically do so with considerably  more flexibility, and additional savings and financial tips, and savings services to customers — all carried out over digital platforms.

Big, incumbent banks have scrambled to keep up with innovation, but newer generations of users are less beholden to their brands and incumbency, not least a result of the banking crisis last decade that revealed many of them to be cosiderably less competent and solid than many might have assumed.

That bigger market picture has also meant a surge of many neobanks, and so Starling competes with more than just the incumbents. Others include Monese, Revolut, Tide, Atom and Monzo — the latter a particularly acute competitor, founded by the ex-CTO of Starling.

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Deliveroo posted narrowed loss of $309M, with gross transactions surging to $5.7B in 2020, EITF shows

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The clock has officially started ticking on Deliveroo’s plans to go public in April. After announcing last week that it planned to list on the London Stock Exchange, today the on-demand food delivery company backed by Amazon and others published selected updated financials for the previous fiscal year, along with its Expected Intention to Float (EITF) — a more formal document that marks the two-week period until the company publishes its prospectus and, at the start of April, embarks on its subsequent IPO.

The bottom line is that Deliveroo is still unprofitable. It posted a 2020 underlying loss of £223.7 million ($309 million), but that figure was down by nearly £100 million from 2019, when it chalked up a loss of £317 million ($438 million). It did not disclose revenues (sometimes called turnover) in today’s statement.

The company said that it now serves some 6 million customers, with its three-sided marketplace also including more than 115,000 restaurants, takeaways and grocery stores, and 100,000 riders in 800 locations among 12 markets.

At the same time, Deliveroo showed some clear momentum in a year where many restaurants had to close their doors and shift operations to take-away models because of Covid-19.

It notes that it has been profitable on an “Adjusted EBITDA basis” over two quarters, with underlying gross profit up by 89.5% to £358 million ($495 million) compared to £189 million in 2019.

Its gross transaction volume (total amount spent by consumers ordering food) grew by 64% to £4.1 billion ($5.67 billion) with the run-rate in Q4 surging to £5 billion. This figure is unsurprising when you consider that Q4 represented the holiday period, and additionally the UK market (Deliveroo’s primary market and its home) went through not one but two different periods of being locked down in that quarter (the second of these is still in place).

It also notes that gross profit margin as a percentage of GTV has grown from 5.8% in 2018 to 8.8% in 2020, with some markets getting to 12%.

“The company remains focused on investing in driving growth in a nascent online food market,” it noted in the EITF, although I’m not sure nascent is exactly the word I’d use. Its drivers are easily the most visible of the many delivery services that exist in London. Deliveroo estimates that the restaurant and grocery sectors represent an addressable market of £1.2 trillion ($1.66 trillion) across the 12 regions where it offers services. In that figure, it says that just 3% of sales are estimated to be online, “equivalent to less than 1 out of the 21 weekly meal occasions being online.”

The company was valued at over $7 billion in it last fundraising, a $180 million round from Durable, Fidelity and others, as recently as January of this year.

It’s a huge leap that is the stuff that tech myths are made of (with untold hours of blood, sweat and tears, and a lot of luck too). I met Will Shu, the CEO and founder, when he was just really getting started at Deliveroo, and he seemed somewhat bewildered by how fast the startup was growing and where it was leading him. It’s interesting that he himself hasn’t forgotten those early days, either, which surely help keep the company focused at a time when there are a lot of opportunities, and therefore a lot of potential for focus unravelling.

“I never set out to be a founder or a CEO. I was never into start-ups, I didn’t read TechCrunch. I’m not one of those Silicon Valley types with a million ideas,” he noted in his letter published in the EITF. “I had one idea. One idea born out of personal frustration. An idea that I was fanatically obsessed with: I wanted to get great food delivered from amazing London restaurants.”

The prospectus will tell us how much the company intends to raise in its IPO so we’ll know those numbers soon. In the meantime, Deliveroo said that it plans to “invest in its long-term proposition by developing its core marketplace, enhancing its superior consumer experience, providing restaurant and grocery partners with unique tools to help them grow their businesses, and providing riders with the flexible work they value alongside security.”

It’s also going to continue building out “dark kitchens” (which it brands Editions); Signature, a white-label service for restaurants to offer delivery via their own online channels; Plus, a Prime-style loyalty subscription service; and on-demand grocery — which is also shaping up to be a huge market in Europe and the rest of the world.

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Porsche raises stake in electric car and components maker Rimac Automobili

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Rimac Automobili, the Croatian company known for its electric hypercars and battery and powertrain development, has gained yet another investment from Porsche AG.

Porsche said Monday it has invested 70 million euros ($83.3 miilion) into Rimac, a move that increases its stake from 15% to 24%.

This is the third time Porsche has invested into Rimac. The German automaker made its first investment into Rimac in 2018. Porsche increased its equity stake into Rimac in September 2019. A few months earlier, Hyundai Motor Company and Kia Motors jointly invested €80 million ($90 million at the time) into Rimac.

Rimac was founded by Mate Rimac in 2009 and is perhaps best known for its electric hypercars, such as the two-seater C Two that it debuted in 2018 at the Geneva International Motor Show. The vehicle produces an eye-popping 1,914 horsepower, has a top speed of 256 miles per hour and can accelerate from 0 to 60 mph in 1.85 seconds. Rimac plans to unveil C Two in its final form in 2021.

However, Rimac does more than produce hypercars. The company, which employs 1,000 people, also focuses on battery technology within the high-voltage segment, engineers and manufactures electric powertrains and develops digital interfaces between humans and machines.

Porsche is most interested in Rimac’s development of components, according to comments made by Lutz Meschke, the deputy chairman of Porsche AG’s executive board. Meschke noted that Rimac is “excellently positioned in prototype solutions and small series” and “is well on its way to becoming a Tier 1 supplier for Porsche and other manufacturers in the high-tech segment.”

Porsche has already placed its first orders with Rimac for the development of highly innovative series components, according to Meschke.

Despite its continued investments, Porsche said it doesn’t have a controlling stake in Rimac.

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