Disclosure: AFN’s parent company, AgFunder, is an investor in Ai Palette.
Food trend-spotting platform Ai Palette has raised $4.4 million in Series A funding, AFN can exclusively reveal.
Indian VC firms Exfinity Venture Partners and pi Ventures co-led the round. Existing Ai Palette backers, US-based AgFunder and Decacorn Capital, also participated alongside new investor, Singapore’s Anthill Ventures.
Ai Palette has now raised $5.5 million in total to date, following a $1.1 million seed round back in August 2019 which involved AgFunder, the Singapore government’s SG Innovate, and venture builder Entrepreneur First.
The Singapore-based startup will use the Series A funds to expand its presence outside the Asia-Pacific region and to build out its data science and engineering teams through hires.
“This helps us execute on a comprehensive product roadmap and when done right, will allow us to serve our customers in many [more] ways throughout their product innovation process,” says co-founder and CEO Somsubhra GanChoudhuri.
“Ai Palette is targeting customer bases in the US and Europe. We have been working with partners in these regions since last year and will now grow from there. Equally, we’re deepening our engagements in Southeast Asia and India and supporting customers in China and Japan,” he tells AFN.
Why AgFunder invested in Ai Palette – read the investment note here
Founded in 2018 by former Givaudan exec GanChoudhuri and ex-Visa big data expert Himanshu Upreti, Ai Palette helps companies in the food and consumer packaged goods (CPG) industries to focus their product development efforts by predicting future customer preferences as far in advance as possible.
This is achieved using artificial intelligence and predictive analytics. The platform is able to collect and scrutinize a wide array of data points from the internet, social media, and myriad other sources. Named Foresight Engine, Ai Palette’s software tracks the ‘maturity’ of a consumer trend around a given flavor or ingredient, and predicts that trend’s future trajectory.
Brands including Cargill, Danone, Dole, and Kellogg’s are using Foresight Engine to come up with new product concepts and reposition existing products for new markets. They pay a subscription which is tailored in accordance with the territories and categories that matter to them.
While Ai Palette isn’t the only startup offering trend-spotting services for the agrifood industries, it claims to stand apart from the crowd because of its “language-agnostic” capabilities. Foresight Engine is able to process data in 15 different languages — including English, Chinese, Spanish, French, and Arabic — allowing it to cover more than half of the world’s population, according to GanChoudhuri.
“From day one, we wanted Ai Palette to be relevant globally. This was clear from my time at Givaudan – my clients looked after entire regions, so they always needed to understand trends not just at the country level, but also regionally and across cultures,” he says.
“Plus, they wanted deep analysis for every category, regardless of size. So when Himanshu started designing the technology, this need to support customers broadly was a priority. His team developed a language-agnostic approach to machine learning, which means we can offer coverage globally, not just in the English-speaking world, and depth of analysis even for the smallest categories. It can also process images, which provides richer context to trend analysis.”
This proprietary natural language processing engine continues to ‘learn’ as it ingests more data, enabling it to ‘fine tune’ its recognition of languages as it goes along.
Coronavirus sparks snacking trend
The Covid-19 pandemic saw demand for Ai Palette’s solutions soar, according to GanChoudhuri – and also helped the startup to get the word out to prospective investors.
“Covid-19 actually broadened the pool of investors for us. [Those] who typically preferred in-person interaction became comfortable with video conferencing, which opened up investors who were based abroad,” he says.
This gave the team an enhanced opportunity to hone their elevator pitch, which had previously left some investors unconvinced.
“The problem of CPG product innovation is not apparent to people outside the industry, so it takes a while for them to understand the problem space. But once they get it, and understand the size of the industry and opportunity for digital transformation, they get super excited about our market potential,” GanChoudhuri says.
Inevitably, Covid-19 has also shaped Ai Palette’s research output, as clients try to make sense of evolving consumer concerns and preferences 18 months into the global crisis.
“The health-related trends as we come out of the pandemic have been fascinating. For instance, ‘healthy snacking’ is a new trend – we now snack up to six times a day,” GanChoudhuri says.
“So for CPG firms who want to innovate in this area, they need to understand what’s driving this trend. That’s a mix of convenience – we usually snack in front of screens so product format is a factor, plus we need food that has a long shelf life; nutrition, with consumers demanding clean labels, and awareness of gut health is rising; and meeting taste preferences through local flavor variants and ingredients.”
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