Mostly AI Raises $25 Million for Synthetic Data Commercialization

MOSTLY AI Secures $25 Million in Series B Funding

Austrian startup MOSTLY AI, specializing in synthetic data, has announced the successful completion of a $25 million Series B funding round. The investment was spearheaded by Molten Ventures, a UK-based venture capital firm, with additional participation from Citi Ventures, a new investor.

Expanding Reach and Capabilities

Existing investors, 42CAP from Munich and Earlybird from Berlin – who previously led MOSTLY AI’s $5 million Series A round in 2020 – also contributed to this latest funding round. The company intends to utilize these funds to enhance its product offerings, expand its team, and broaden its customer base across both Europe and the United States.

The Power of Synthetic Data

Synthetic data, while artificially generated, isn’t random. MOSTLY AI leverages artificial intelligence to create datasets that closely mirror the characteristics of a client’s original databases.

These datasets possess the same level of detail as real customer data, but crucially, they exclude any personally identifiable information. This approach addresses growing privacy concerns and regulatory requirements.

Driven by Regulation and Innovation

Founded in Vienna in 2017, MOSTLY AI benefited from the implementation of the General Data Protection Regulation (GDPR) in the EU a year later. The increasing demand for privacy-focused solutions, coupled with the advancement of machine learning, has fueled significant growth in the synthetic data market.

Industry analysts at Gartner predict that by 2024, a substantial 60% of the data utilized for AI and analytics development will be synthetically generated.

Targeting Key Industries

MOSTLY AI primarily serves large organizations in highly regulated sectors, including:

• Fortune 100 banks
• Insurance companies
• Telecommunications providers

Healthcare is also emerging as a significant area of demand for synthetic tabular data.

Exploring New Applications

While historically focused on the aforementioned sectors, MOSTLY AI is actively exploring opportunities within healthcare, initiating pilot projects this year. The company envisions a future where synthetic data is accessible to a wider range of organizations and industries.

Currently, larger enterprises possess the necessary resources and expertise to effectively utilize synthetic data. To meet their stringent requirements, MOSTLY AI has achieved ISO certifications.

A Focus on Commercialization and Value

According to Tobias Hann, CEO of MOSTLY AI, the company is dedicated not only to the technical aspects of its technology but also to its commercial viability and the tangible benefits it delivers to clients.

Christoph Hornung, investment director at Molten Ventures, highlighted MOSTLY AI’s leadership in the synthetic data space, citing its strong customer deployments and deep expertise.

Beyond Compliance: Competitive Advantage

Compliance with privacy regulations like GDPR and CCPA is a major driver of demand for synthetic data. However, it’s not the sole factor.

In Europe, a broader cultural emphasis on privacy contributes to demand, while in the U.S., the focus is also on fostering innovation. Use cases include advanced analytics, fraud detection, and predictive modeling, all conducted without compromising user privacy.

Hann emphasizes that companies are increasingly recognizing the value of privacy and the competitive advantage it can provide.

Expanding the Team and Looking Ahead

To capitalize on growing demand, particularly in the U.S., MOSTLY AI is actively expanding its team in New York City, Vienna, and through remote positions. The company plans to increase its headcount from 35 to 65 by the end of the year.

Hann anticipates 2022 as a pivotal year for synthetic data adoption, predicting a “really strong decade” ahead. This growth will be supported by the increasing importance of responsible AI, including concepts like fairness and explainability.

Versatility Beyond Machine Learning

Beyond machine learning applications, MOSTLY AI recognizes the potential of synthetic data in software testing. To cater to this broader audience, the company released version 2.0 of its platform, making synthetic data accessible to both data scientists and software engineers.

MOSTLY AI 2.0 offers flexible deployment options, including on-premise or private cloud, and adapts to diverse data structures.

Strategic Partnerships and Long-Term Vision

Hann describes MOSTLY AI as a B2B software infrastructure company, and the company sought investors who shared this understanding. Molten Ventures’ status as a publicly listed VC, offering long-term commitment, was particularly appealing.

The involvement of Citi Ventures, the venture arm of Citigroup, provides valuable network and relationship opportunities within the U.S. market.

Competitive Landscape

With its new funding and expanded U.S. presence, MOSTLY AI is well-positioned to compete with other players in the synthetic data space, including Tonic.ai, Gretel AI, Hazy, and companies specializing in specific verticals.

Hann acknowledges the growing number of competitors, viewing it as a positive sign of the market’s increasing interest and potential.