tonic.ai Raises $35M Series B for Synthetic Data Generation

Synthetic Data Startup Tonic.ai Secures $35 Million Series B Funding

Software engineers frequently encounter obstacles when attempting to test their applications without utilizing genuine customer information. The creation of a representative test dataset can prove both time-intensive and difficult. Tonic.ai, a company focused on enabling engineers to generate synthetic data sets, aims to address this challenge. Today, the company announced the successful completion of a $35 million Series B funding round.

Investment Details

Insight Partners spearheaded the investment round, with additional participation from GGV Capital, Bloomberg Beta, William Smith of Octave, Heavybit, and Silicon Valley CISO Investments. According to data from Crunchbase, Tonic.ai has now raised a cumulative total of $45 million.

Tonic.ai's Core Mission

Ian Coe, CEO and co-founder of the company, articulated the company’s primary objective: to furnish developers with data that mirrors production environments, all while satisfying the requirements of governance and compliance teams. “Tonic functions as a data transformation company, employing synthetic data, differential privacy, and distributed computing techniques,” Coe explained. “We effectively de-identify sensitive data, yet retain its inherent value, allowing developers to leverage it for software development and testing.”

How the Technology Works

The company’s approach involves generating “artificial” datasets derived from actual data, ensuring a high degree of similarity to the information stored within existing databases. However, the solution extends beyond simple anonymization to meet legal and ethical standards.

It frequently necessitates managing intricate relationships spanning multiple data repositories and complex database systems. This complexity is a key differentiator.

The Complexity of Data Transformation

Coe emphasizes that replicating this process internally is challenging due to the sophisticated processes occurring behind the scenes. For instance, ensuring consistent name changes throughout the entire application production process, without any potential data breaches, requires meticulous attention to detail.

Target Audience and Competitive Landscape

Currently, Tonic.ai is primarily targeting developers as its core customer base, although the product could also benefit data scientists. Launched in 2019, the company acknowledges the presence of competitors like Gretel and Synthetaic, but believes its solutions more comprehensively address the complexities inherent in enterprise-level data challenges.

“We observe other emerging companies, but they generally don’t tackle the intricacies of enterprise data management, including the often-tedious data infrastructure work and seamless integration with CI/CD pipelines,” Coe stated. “This integration capability represents a significant advantage for Tonic.”

Growth and Hiring Plans

The company currently employs approximately 40 individuals. With the new capital infusion, Tonic.ai intends to expand its workforce to at least 100 employees by 2022. To facilitate this growth, a new head of people and talent has been appointed, with a focus on fostering a diverse employee base.

Commitment to Diversity

“Our head of talent is implementing specialized recruitment initiatives this year to proactively reach out to historically underrepresented groups,” Coe shared. “We are also utilizing recruitment services specializing in diverse hiring practices.”