Swiftly  just raised a $10 million Series A round led by VIA ID, Aster Capital, Renewal Funds and Wind Capital to grow its software-as-a-service business for cities’ transportation agencies. lt works by helping cities manage their transit systems and identify points in the schedule or route that negatively impact service efficiency and reliability.

Swiftly also offers real-time passenger info that will “predict when the bus will arrive in a way that is much more accurate than the current system,” Swiftly co-founder and CEO Jonny Simkin. In fact, Simkin says Swiftly is up to 30% more accurate than current systems.

“It’s one thing to tell someone their bus is 10 minutes delayed, but if we can get to the root of the problem, it’s better for the city and stimulates the economy,” he said.

That’s where Swifty’s data platform comes in to gather insights and analyze historical data to rethink route planning and where to place stops. In one city, these insights led the customer to implement processes to change lights to green when a bus is running behind schedule.

Swiftly currently works with more than 50 cities and 2,500 transit professionals throughout the country. That comes out to powering more than 1.2 billion passenger trips per year. If you’ve never heard of Swiftly, you’re not alone. And that’s by design.

Swiftly is meant to be behind-the-scenes software that enables local transportation agencies to better manage their fleets and offerings to their respective riders. Swiftly’s customer is generally either a transit agency, a city or department of transportation.

“They buy our platform because they want to improve the passenger experience, and improve service reliability and efficiency,” Simkin said.

For the passenger, they experience Swiftly when they open Google Maps and look for transit routes or when they open a city’s specific transit service. One of Swiftly’s customers is the Santa Clara Valley Transportation Authority in San Jose, Calif. Its CIO, Gary Miskell, says Swiftly is one of the authority’s early innovation partners.

“With Swiftly’s innovative product development, VTA has been able to improve our real time information accuracy and provide cutting edge data to our planning and operations staff thus improving our transit system performance,” Miskell said in a statement.

With the funding, the plan is to expand to several hundred cities in the U.S. and worldwide.

“Public transit is very important to our communities and cities and it’s something that needs to be more efficient,” Simkin said. “Public transit is this extensive piece of the community and there to serve everyone, but often times those tools fall short.”

Dozens of start-ups have emerged over the past few years boldly announcing we have the technology; flying cars are here (or almost). Serious money is being thrown at electric and hybrid aviation, and credible backers are not lacking. Even the incumbent aircraft manufacturers are backing start-ups and launching their own in-house development programs. At the same time, the detractors say yes, maybe one day we’ll fly electric, but not anytime soon, mostly due to limitations of current battery performance.

Over the past 30 years I’ve experienced some fundamental industry transformations as a banker, investor and entrepreneur. I’ve seen technology innovation fundamentally transform massive industries such as telecommunications, computing and energy.

Today, I am seeing the signs of such a transformation in aviation. This article looks at the background to electric aviation, the challenges it faces today, and some indications about where attractive investment opportunities are likely to emerge.

1884: Electric Airships

It is well known that the electric car made a brief appearance at the beginning of the 20th century, only to be overwhelmed by the superior performance range of gasoline-powered vehicles.

Less known is the fact that the first powered flights were electrically powered and with Vertical Take-Off and Landing (eVTOL) capability The first powered aircraft, the dirigible “La France,” flew an 8 km trip around Chalais Meudon in 1884, using bespoke electric motors powered by a zinc-chlorine battery with an energy density of around 30 Wh/kg. Despite a series of successful flights, the aircraft’s range was too limited by its batteries to be further developed, and the glory days of the Zeppelin era were powered by diesel. Gasoline and other oil derivatives have reigned over aviation ever since.

Source: Public Domain

Why? Because fossil fuels simply pack in so much more energy than batteries for a given weight and aircraft range is highly sensitive to the energy density of its propulsive fuel, as described by the Breguet range equation. Electric “fuel” is further disadvantaged compared to conventional fuels because batteries do not lose weight as they discharge, further reducing range compared to combustible fuels.

1973: Electric Airplanes

It was not until the first oil crisis that electric powered aircraft made its reappearance: in October 1973 the first electric airplane (fixed-wings) flight took place in Austria based on a repurposed glider and was powered by VARTA nickel-cadmium batteries and a Bosch electric motor (borrowed from a forklift). The flight lasted for 14 minutes and achieved an altitude of 360 meters. As the oil crisis abated, so did interest in electric aviation. Only half dozen or so electric airplane projects had flown by the end of the last century.

Source: HB-Flugtechnik

In more recent times, an important catalyst for the revival of electric aviation has been NASA’s Centennial Challenges program, a series of innovation prizes launched to mark the Centennial of the Wright Brother’s first powered airplane flight in 1903. In particular, the Green Flight Challenge, designed to push the limits of energy efficiency of flight and which featured the largest cash prize ever awarded in aviation history (total purse of $1.65 million, sponsored by Google), drew 14 entrants. The challenge was to fly 200 miles in less than 2 hours using less than a gallon of fuel (or energy equivalent) per passenger. In 2011, the contest was won by the Slovenian Pipistrel flying an all-electric airplane, using lithium polymer cells with an energy density of 173 Whr/kg. Pipistrel remains one of market leaders for electric light aircraft and is currently developing an eVTOL (as a partner of the UBER Elevate initiative).

Source: Pipistrel

The Green Flight Challenge illustrated that electric aviation had come of age; and that battery technology and electrical propulsion systems had become sufficiently performant, at least for small electric aircraft.

2009–11: Electric Helicopters

Vertical take-off and landing aircraft are more demanding on power sources than conventional aircraft, which benefit more from the forces of lift to stay aloft. It was not until 2009 that a fully electric helicopter was developed and flown in 2011 by Pascal Chrétien and Solution F in France, as a demonstrator. The aircraft was powered by Kokam lithium cobalt pouch cells which had an energy density of 160 Wh/kg. So even for helicopters, battery technology had reached a degree of maturity sufficient at least for short flights.

Source: Solution F

Flying Cars, electric and hybrid airplanes

These clear demonstrations of the capabilities of electric propulsion and battery performance heralded a new era in aviation and drew entrepreneurs, capital and new ideas to the sector, many driven by a “clean tech” ethos. For example, Joby Aviation (“…advancing the transition to sustainable aviation”) was founded in 2009, Kitty Hawk in 2010 (“…we will improve our urban and natural environments with efficient and reliable mobility”), Volocopter in 2012 (“a green helicopter”), and Zunum in 2013 (“…get anywhere fast, and leave behind a healthy planet”).

Some of the incumbent manufacturers took notice of the potential of electrification around this time as well. Sikorsky (now part of Lockheed Martin) attempted to retrofit an existing product, replacing the thermal engine with an electric motors and batteries. And at the end of 2010, a “skunkworks” project was initiated at AgustaWestland in Italy (now Leonardo) to develop a fully electric tiltrotor eVTOL as a technology demonstrator. After test flights in 2011, the aircraft was revealed to the public in 2013. Airbus developed a 2 seater all electric demostrator (the “E-Fan”) which flew in 2014.

During this period played a key role in promoting the idea of electric and distributed propulsion, releasing several conceptual designs and funding a sub-scale tilt-wing hybrid demonstrator (“Greased Lightning”) which flew in 2015.

Drones

And another force came into play during this period: drones. As consumer drones increased in capability with better batteries and higher payloads, the commercial potential became apparent. New markets in aerial photography and surveying, inspection, agriculture, and security have been evolving quickly, and market overlap with helicopters is already apparent. Off-the-shelf drone technology also allows the rapid prototyping of new eVTOL concepts, and the push for delivery drones is forcing regulatory bodies to put in place air traffic management systems — which will be essential for the eventual deployment of “flying cars”.

UBER Elevate

Perhaps the biggest catalyst for electric aviation has come from the UBER Elevate initiative. Launched by the publication of a White Paper in 2016, UBER proposed to develop an ecosystem for urban air mobility as an extension of its existing “on-demand” ground mobility services. Subsequent conferences and industry gatherings have fleshed out a full vision of the ecosystem and design requirements (eVTOL common reference models) have been published. UBER has engaged closely with aircraft manufacturers (including EMBRAER, BELL, BOEING/Aurora, Pipistrel and KAREM) and the cities of Los Angeles and Dallas-Fort Worth, with the aim of launching commercial operations in 2023. UBER’s vehicle requirements will only accommodate fully electric aircraft and vertiport specifications do not allow for combustible fuel.

The promise of a huge market facilitated by UBER has drawn dozens of new entrants into the market since 2016. The website evtol.news keeps a running tab of eVTOL projects and start-ups — there are 167 of them listed as of May 14 2019, and many innovative designs are emerging.

Source: Neoptera

Big Questions remain

Above all, it’s about the performance of batteries. If it took engineers over one hundred years to progress from 30 Wh/kg to 160 Wh/kg, how long is it going to take to make the next leap? Aviation fuel (Jet-A) has an energy density of 11,000 Wh/kg!

The answer is that such a leap might not be necessary. Electric motors are inherently more efficient than thermal engines, by as much as a factor of 2. Moreover, electric propulsion scales linearly, enabling distributed propulsion. Distributed propulsion allows better airframe designs with superior lift/drag ratios than conventionally designed aircraft.

Hybrid designs, especially where a generator is used to power distributed electric motors, can allow aircraft to benefit from some of the advantages of distributed propulsion, and obtain longer ranges or higher payloads without having to wait for battery technology to improve. Zunum in the US and Voltaero in France are taking this approach.

But limitations in battery performance is unlikely to put much of a brake on this new sector for the simple reason that most flights are relatively short. Many routes (especially short helicopter hops, like Nice to Monaco) are well within the range of existing technology. Many more routes will soon be in range as improvements are beginning to be commercialized.

Source: OpenFlights / hasty data 2015

UBER Elevate specification calls for 300Wh/kg for aircraft put into commercial service in 2023, and it has assured its aircraft partners that it is working with battery partners to ensure this can be achieved. With the current growth of the terrestrial EV market, there is no lack of focus on improving batteries. Additionally, new chemistries, such as solid-state lithium (Bolloré, SAFT and others), lithium metal (Pellion Technologies for example) and lithium sulphur (Oxis Energy) are beginning to be commercialized. Oxis Energy recently announced a 450 Wh/kg cell, and funding for a factory to build them in Brazil. Even though battery technology remains in flux and certification challenges remain, it is unlikely that batteries will constrain the development of at least short-haul electric flight.

Other Forces at play

What’s really driving electric aviation and the market for “flying cars” and electric airplanes?

1) Environmental concerns. The initial impetus for electric aviation came from the “Green Flight Challenge.” Although the industry incumbents try to make light of it and claim that aviation accounts for merely 2% of global greenhouse gas (GHG) emissions, most observers agree that it’s one of the fastest growing sources of GHG. Many suspect that the 2% figure is a very significant under-estimate, especially if the warming effect of contrails are taken into account. The carbon footprint of commercial aviation has long been a pet-peeve of environmentalists and some have even vowed to stop flying completely, or at least severely limit it. A “shame of flying” or flygskam has entered into the public consciousness in Sweden to the point that domestic air travel demand declined in 2018, with a commensurate increase in demand of intercity train travel. Governments are beginning to respond to these concerns; the Norwegian government has mandated all-electric domestic flights by 2040. Environmental concerns may also become a key driver for the deployment at scale of cargo and delivery drones.

Source: Roland Berger

2) The flying car fantasy. No one likes getting stuck in traffic and if a similarly priced alternative is available, as promised by the likes of UBER, what is there not to like?

3) The promise of “distributed aviation” and regional air taxi services. The mega-hub system is designed to serve the operational efficiency of airlines flying large fossil fueled aircraft. Many people (in mature developed economies) live within a few miles of a local airfield, and their final destination is within a few miles of a local airfield. Regional aviation has been constrained by high costs and noise. If both of these constraints are removed, a renaissance in regional aviation may ensue.

4) Cargo drones are paving the way for eVTOLs. Easily accepted by society initially for the enhanced delivery of emergency medical services and transport of medical samples, it will be a small step to introduce air ambulances, especially if they are quieter and less costly than existing helicopters. Similar acceptability will be found for fire-fighting. As functional drones are normalized, last mile delivery is likely to become more acceptable, especially if lower carbon footprints can be demonstrated.

Turbulence

Let’s assume that incremental improvement in batteries is sufficient to economically serve short urban/suburban and even regional routes.

What could still prevent this market from emerging at scale anytime soon?

1. Noise — all of the new market entrants are promising quieter aircraft, sometimes much more quiet than existing ones. If this benefit does not materialize, public acceptance for new airport facilities and increased usage of existing ones may prove to be very difficult.

2. Costs — as with noise, everyone is promising a big reduction in costs, especially in operating and maintenance costs. While it’s clear that “electric” fuel is usually less expensive than the hydrocarbon equivalent, it may not be the case in all refueling locations. Also, battery life for this new application remains uncertain, and they may need to be replaced more often than anticipated.

3. Infrastructure — many new infrastructure elements need to be put into place for this industry to emerge, including the obvious “vertiports” for flying taxis, but also the electrical charging infrastructure. According to some estimates, even a modest recharging facility at an airport will require a doubling of existing electrical power availability. Existing air traffic management systems will need to be upgraded or supplemented to accommodate increase traffic, and traffic flying in new corridors. Who will pay for these infrastructure elements remains to be seen.

4. Certification — it goes without saying that safety is of paramount importance. Commercial air transport has an exemplary safety record, and it’s highly unlikely that standards or passenger expectation will be lowered. Certification bodies face major challenges to evaluate and certify new technologies, and are likely, given recent events surrounding the 737MAX, to be overly cautious.

5. Pilots — a renaissance in regional aviation and the emergence of ultra-short-haul eVTOLs will require a significant increase in licensed pilots. Certification agencies also need to adapt licensing to accommodate the new technologies of eVTOLs and electric propulsion. Autonomous systems can overcome this constraint, if and when certification and regulatory authorities agree.

Paradigm shift or not, the race is on to build and deploy these new electric aircraft. Long term success will depend on how well and how quickly market participants navigate through these areas of turbulence.

For investors, deciding where to place bets is challenging. Let’s first consider who makes money in aviation today; the most profitable links in the air transport industry value chain are the ticket sellers and the computer reservation systems. This throws an interesting light on UBER’s positioning in the industry. Other attractive segments include all freight forwarders, navigation and other services provided to the airlines.

To what degree this value chain holds in the transition to an electrified industry remains to be seen, and a big question hanging over the sector is: who is going to take the risk to purchase, finance, insure, and operate these new aircraft?

Attractive investment themes in electric aviation

Aster has been investing in early and growth stage innovators driving industry transformations for the past 20 years. We’ve developed a number of investment themes in electric aviation and urban air mobility which leverage and complement our existing investing activity in mobility, energy and industry. Our main themes in aviation include:

· Ticket sales and computer reservation systems. There is already a brisk business in fractional ownership and reselling capacity on private aircraft, including helicopters.

· The supply chain of the new aircraft manufacturers — batteries, battery management systems, electrical control systems, motors; avionics, sensors, navigation aids, autonomous pilot systems. High fidelity design tools for electric propulsion.

· Infrastructure and services — including vertiports, warehouses for delivery drones, air traffic management systems, battery charging, maintenance.

· Cargo and delivery drones — buoyant existing market for equipment and services, fewer regulatory constraints.

· Aircraft manufacturers — rigorous assessment of management and technical teams required, as well as technical review of design concept and execution capability. Entry barriers seem deceptively low; many start-ups will hit the wall as they attempt to undergo certification of their aircraft.

Paradigm Shift?

We most probably are in the midst of a paradigm shift: the underlying assumptions about the air transport industry may no longer hold. Market entrants arriving with new technologies present both challenges and opportunities for the incumbents. Airport planners and civil aviation authorities need to consider that growth may also come from regional airports rather than just mega-hubs. Cities and regions need to consider the benefits and risks of introducing urban air mobility and cargo drones. For the old guard a paradigm shift represents both threats and opportunities: existing airlines may be surprised by how quickly new entrants begin to erode the edges of their already fragile businesses.

For the second year in a row, Aster was thrilled to be sponsor of the VC Night, the official Viva Technology launch party set in Montorgueil Street on May 15th. From 7pm until late, Aster welcomed international startups attending VivaTech in a casual atmosphere at Le Lézard Café.
See a few pictures below.

Discover the pictures of the event:

After the success of the first edition in Munich in December 2018, Aster was thrilled to organize the 2nd Industrial Tech Talk along with Speedinvest. The event took place in our offices in Paris on Tuesday, April 9, 2019, and welcomed 4 amazing speakers (Maher Chebbo, Annie Saillard, David Vauthrin and Simone Pugliese) to discuss the critical topic of scalability for industrial startups. 

To watch the replay:

After the success of its launch, Aster Fab – the consulting firm created by Aster dedicated to innovation strategies – organized the first edition of the “Fab Insights” events. This new format decodes current market dynamics thanks to keynotes by Aster’s team members and exchanges with the audience. On the menu last week: predictive analytics and digital engineering. See a few pictures below.

Discover the pictures of the event:

While the annual growth of e-commerce is expected to reach 11.7% by 2025[1] with the result that the number of parcels shipped in Europe will double, urban logistics has to juggle with ever more constraints: legal constraints on the one hand, with many European cities setting access restrictions on their city centers to diesel vehicles; and economic constraints on the other hand. For example, the closure of Foodora’s meal delivery company business in France has highlighted the fragility of platform models for last-mile delivery because they do not allow the pooling of flows (for those most interested in this subject, I recommend reading this McKinsey analysis: The urban delivery bet: USD 5 billion in venture capital at risk.

In this context, can trains, subways, tramways and the Paris RER, for instance, which criss-cross large cities daily with a low carbon footprint[2] answer the current challenges of urban logistics?

While the potential of co-modality may be emphasized by Jerome Libeskind who quotes some examples in his work Urban logistics in Japan, this expert reserves his opinion on the ability of rail transport to provide a solution to urban logistics: “Rail mode, which is very rigid and often saturated, will not bear up to the competition […] in the face of highways made “clean” again and which bring flexibility of use”[3].

For our part, we wish to point out the intrinsic strengths of rail mode and the resulting opportunities in this growing market.

Stations are natural hubs within urban areas

Places of transit par excellence, the world’s largest stations every day see hundreds of thousands of people pass: between 500,000 and 700,000 people per day pass through Paris Gare du Nord, London Waterloo, Hamburg Hauptbahnhof, etc., while the figure for Tokyo’s Shinjuku Station is said to be more than 3,000,000[4].

“The station of the future […] will connect people, commercial flows and data all at the same time”. This is the conviction of Patrick Ropert, as the former CEO of SNCF Gares & Connexions explains in his book Citybooster[5] published in 2017. For this reason, picking up parcels at a collection point in a station looks to be an interesting compromise between economic efficiency and fluidity of the customer journey. The experiences of self-service pick-up lockers in rail stations, such as those operated by the La Poste Group company, Pickup, and Amazon Locker, are promising.

Digital tools are an opportunity for the train to be put (back) into the urban supply chain

Let’s stimulate our imagination by analyzing some start-up models that could be taken and applied to our subject:

• E-merchant X uses the Byrd (D) platform to manage its shipments. The Byrd algorithm — depending on package size and destination — determines the most suitable partner carrier.
• Then there is suburban train operator Y which can perform real-time tracking and predict numbers in its trains thanks to the Opencapacity(UK) platform. The latter merges data from ticketing, surveillance cameras and weight sensors and extrapolates them with artificial intelligence. The operator sells seats available at off-peak times to its network of parcel carriers.
• Carrier Z receives the transport order from e-merchant X. Thanks to its Wise (US) routing optimization software, it decides to consolidate its flows on the day via rail mode and organizes the last-miles with its network of cyclists equipped with K’ryole (FR).

A clever mix of Internet of Things, artificial intelligence and digital platform will allow operators to share their available transport capacity and the delivery status of packages in near-real-time. Customers will then have an ecological, capacitive and inexpensive mode of transport if they make use of the spaces available in off-peak hours. Resolution of the economic and operational equation will undoubtedly greatly depend on how the modal disruption and last-mile are organized. Rail station layout will be fundamental in this respect as will finding the right combination with “soft” transport modes. In these areas, the creativity of start-ups and the proactivity of our cities do not mean there won’t be surprises in store.

The train, new e-commerce platform?

Beyond the possibility of conveying parcels by rail, these means of transport could themselves become places of life in which purchase and collection actions are an integral part of the passenger experience.

Last November, the Telegraph reported that deliveries of Amazon packages would be possible on board the trains being proposed by Bombardier and Hitachi for the London-Birmingham line. According to the article, passengers could, for example, order a pair of sneakers on board the train and have them delivered right to their seat at the train’s next in-station stop. True bill or fake news in the context of a close struggle between bidding manufacturers for this huge tender?

In an “economy in which attention is the scarcest commodity and the most precious source of value”[6], the idea of encouraging consumers to shop while on their journeys is gaining ground. Start-ups are positioning themselves to capture and monetize some of the attention available from passengers during a flight, an Uber ride or a train journey. While Skydeals (FR) has been exploring the lie of the land with airlines for a few months, Enroute (IL) has just started an experiment with Deutsche Bahn with an original model: passengers who agree to do their shopping on board a train get a free journey!

Thus it may be seen that the rail passenger transport system, with its structuring axes, its stations and its thousands of potential consumers using the network, in a way focuses on the major issues of urban logistics: ordering, routing and withdrawal. To take it out of its marginal role, all that remains to be done is to convert stations into multimodal platforms. 

[1] Grand View Research, September 2017

[2] https://www.oui.sncf/aide/calcul-des-emissions-de-co2-sur-votre-trajet-en-train

[3] What future for urban rail freight? Blog Logicités, Sept 2018

[4] https://www.worldatlas.com/articles/7-of-the-busiest-train-stations-in-the-world.html

[5] Citybooster, Patrick Ropert, 2017

[6] The economy of attention, the new horizon of capitalism? Under the auspices of Yves Citton, Edition La Découverte, 2014

Thanks to a shared vision of entrepreneurship and innovation, Sowefund, a crowdfunding platform, and Aster, a venture capital firm specializing in the digital transformation, have announced the launch of the Aster^crowd program. This unique program for financing and supporting start-up companies selected by Aster, through joint investments with the Sowefund crowdfunding community, is intended to revitalize the financing of innovation in France and offer everyone the opportunity to become a business angel alongside an investment fund.

A shared desire: to professionalize and democratize investment on behalf of entrepreneurs

Through this partnership, Aster and Sowefund will offer financing to selected companies through an investment and support from an investment fund combined with additional contributions from the crowdfunding community of the Sowefund platform.

The selected companies may therefore receive customized support as well as an additional source of financing along with that provided by Aster, all while offering individuals the possibility of supporting the real economy alongside a management company.

Since its creation in 2014, Sowefund has always sought to offer individuals the chance to invest alongside investment professionals in young, innovative French start-up firms with strong growth potential. This partnership now enables Sowefund to offer different investment opportunities, at more advanced stages of maturity, and thereby provide new opportunities to the 45,000 members of its platform.

As a leader in French innovation capital, Aster has backed more than 60 entrepreneurial teams in their efforts to transform the mobility, energy and industry sectors. With the launch of the Aster^crowd program, the management company now adds crowdfunding to its quiver of support for start-ups. Meanwhile, for the first time Aster also lends its expertise in identifying young companies with growth potential for a community of individuals who can thereby become genuine business angels.

After the first episode “SW is eating the world”, the second opus “AI transforms all sectors” is now out. But let’s not stop to this noisy tagline. AI does not transform all companies. And AI does not transform all sectors as fast as one could think. The main reason behind that is simple: deploying artificial intelligence is resource intensive and challenging for most businesses. Specifically, companies have a hard time attracting and recruiting talents in data-science. Lack of speed, lack of budget… startups look much more attractive to many young graduates. Large corporates such as Air France or Renault make a try to spread AI within their organizations by launching some agile and well-funded internal entities (aka. digital factories), mimicking the start-up codes. One thing is for sure, for those who can’t afford to create such entities, meaning most SMEs and plenty of large corporates that are lagging behind, hiring experienced data-science profiles is a nightmare. And transforming their organization with AI seems a distant dream.

Things could change: computing performances continue to increase as fast as costs drop, AI continues to be a field where the open source is never that far from the state of the art, and AI requires less and less training. These three factors have enabled the development of platforms that facilitate or even automate the creation of machine learning applications. A kind of AI to create AI applications. The so-called Automated Machine Learning (or autoML) platforms aim at enabling data-scientists or even any engineer to build and use AI models.

To understand how AI automation can be enabled, one needs to go back to the basics and understand how AI applications are usually created:

• Step 1. Design and Discovery: identify a business opportunity, estimate the value creation potential, and estimate the feasibility based on the data-sets that are available.
• Step 2. Development of ML Models: clean the data-sets, annotate them if needed, define the output of your application, find the right models and algorithms to estimate the output with the best accuracy.
• Step 3. Deployment of ML Models: create a prototype that turn your algorithm into a usable application, test it, integrate it into the workflows of your customers or employees, and change behavior.

Finding, testing, and training a lot of algorithms at Step 2 is time-consuming. And finding the right one with a limited number of iterations is the privilege of a few experts. The promise of autoML is to automate or accelerate these repetitive, costly, low added value tasks. It is enabled thanks to a significant increase in computing capabilities and in the availability of algorithms. Additionally, having a unique tool covering the last two steps reduces time-consuming data manipulation.

DataRobot, a US-based company that recently raised an impressive $100m Series D Round, or H20.ai, are the first leaders in this new category of autoML tools. And the autoML trend is not expected to vanish as fast as it came. Three reasons, and three recommended readings:

• Billions have been invested in start-ups developing specific chips for AI computing in 2017 and 2018, without mentioning the endeavors of cloud giants to build their own chip, such as Google with its TPU. Moore’s Law is outdated, but the computing capabilities to tackle AI challenges are still progressing at a very high pace. AutoML platforms that test and learn different algorithms will get faster as hardware performances increase.[1]
• The AI Community is mostly built around open-source frameworks provided by tech giants such as Google and its TensorFlow framework. Open-source framework attract contributions or research papers from the community that fasten the development of the framework and thus increase user adoption, enabling a virtuous cycle. Auto ML platforms will benefit from the wide availability of this intense research activity.[2]
• Transfer Learning technologies reduces data requirements. Models that have been trained on extensive data-sets for a specific task might be suitable, as a starting point, for another problem. Models that have been trained for visual recognition are sensitive to shapes, edges, etc. They are thus an interesting common ground for any visual recognition application. By reducing the need to tag important data-sets, Transfer Learning lowers the barriers for any autoML platform.[3]

As the market gets larger, subcategories are thus emerging: some platforms focus on learning from specific data types (Clarifai, images), some focus on one specific sectors (Owkin, medical sector).

We do expect the creation of industry specific platforms, that would stand out from others in their ability to deploy the freshly created AI applications in bad connectivity environments, “on the edge”, to enable the creation of applications from smaller datasets, and to avoid the black-box effect by pinpointing the root-causes of a prediction. One thing is for sure: if these platforms might be of great help to accelerate the job of data-scientists, the simple user-interface of these tools should also widen the target group of users to business analysts and any “dataholic” engineer, solving in some cases the tricky hiring challenge of many companies.

[1] More info here from Patrick Shafto, Associate Professor @ Rutgers University Newark: https://blog.hardwareclub.co/theres-an-investment-frenzy-over-ai-chip-startups-d9b5ea42b5c4

[2] More info here from Patrick Shafto, Associate Professor @ Rutgers University Newark: https://theconversation.com/why-big-tech-companies-are-open-sourcing-their-ai-systems-54437

[3] More info here from the Integrate.ai blog: https://medium.com/the-official-integrate-ai-blog/transfer-learning-explained-7d275c1e34e2