July 13, 2024
Close Up of Pen on Contract

There’s a lot of buzz about generative AI and what impact it might have on businesses. But look beyond the hype and high-profile deals like the one between OpenAI and PwC last week, and you’ll see that the world is already years into using customer-facing, no-code AI tools for extracting information and working faster.

Now, one of the early movers in this space — Sirion Labs, a specialist in contracts — is acquiring another enterprise AI pioneer, Eigen Technologies, which focuses on parsing and extracting insights and data from documents in verticals like insurance, finance and law.

The deal underscores not just the opportunity around increasing demand for AI in the B2B market, but also a wider trend in enterprise IT. Currently, companies are opting for simpler, one-stop shops rather than multiple point solutions for their IT needs, leading to consolidation among those building the latter.

Eigen and Sirion are not disclosing the financial terms of the deal, but we have some relevant context that tells some of the story.

London-based Eigen is led and co-founded by Dr. Lewis Liu, an Oxford PhD who studied both art and physics. While still a student, Liu invented a new X-ray laser, and some of that math was then reapplied to the algorithms that Eigen built to extract and understand natural language.

You could describe what Eigen has been doing for years as generative AI, although that is not the term the company uses. The startup’s no-code tools summarize and extract meaning from lengthy and, typically, unstructured and arcane documents, and Eigen built its own dataset and intelligence engine to underpin them. Its product is aimed at non-technical users — no data scientists needed to implement and use it — and typical use cases might be basic search, insights, summaries and for compliance purposes.

Eigen has raised just over $80 million to date, and its last publicly known valuation is from 2019, when it raised $37 million at a price tag of around $170 million. Its investors included Goldman Sachs (a strategic backer) and Dawn Capital.

Liu said prior to this deal, Eigen had “several offers on the table, including term sheets to continue financing the business.” That may mean Eigen was under some pressure: It could have been getting close to the end of its runway and needed to make a choice. But with a pretty impressive customer book (it works with a number of large banks and enterprise names), it had other acquisition offers on the table, as well as funding offers.

Still, it’s a tough market for startups, so funding terms might look more tricky right now even for AI startups. Sirion seemingly came out as the best of the selection.

Liu said the companies were already partnering on business deals because of how enterprises are buying IT, and the two appeared to have a “joint vision.” Liu will become the company’s chief AI officer and lead a new hub in London.

For its part, Sirion was founded in India and focuses on contracts, specifically the application of AI to contract life cycle management. Its tools are also GenAI-ish: You can use conversational queries to search and extract information, similar to Eigen. Alongside that, it also provides AI to parse contracts and make sure that users are clear on the terms, figure out total contract value, and identify any potential loopholes. It currently builds customizations and “small language models,” and also integrates with those building larger foundational LLM models to power its tools.

Sirion’s last round, a Series D, was initially $85 million, but then ultimately closed at $110 million. Its backers include Peak XV (formerly Sequoia India) and Tiger Global.

TechCrunch has confirmed that Sirion is now valued at around $1 billion, a figure that Sirion had not previously disclosed, and much of that Series D is still in the bank. The company says it works with over 250 large enterprises and manages more than 7 million contracts worth $800 billion.

Sirion is not yet profitable, and it has between one and two years of runway left, depending on how exuberant and acquisitive it’s feeling. Acquisitions are on the table, in any case. The main idea, CEO and founder Ajay Agrawal said in an interview, is that it is looking for “tech-led” additions, not customer roll-ups.

“I think the landscape over the next 18 to 24 months will be in a consolidation mindset [in our space], and frankly, there are so many lateral areas for AI … We will be talking,” he said.

On the other side, there is going to be M&A upstream in this space, too. A potential buyer might be one of the larger system of record players. SAP works with Icertis, Salesforce works with Ironclad, and Oracle works with Sirion. There will be more alliances like these, and some could eventually tip into M&A as part of that wider consolidation trend. Watch this space.

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