Varana Capital, a Denver-based investment firm, is giving a boost to an Israeli startup that is promising to accelerate the adoption of artificial intelligence.
Varana Capital co-led a $35 million Series A financing round for NeuReality, the firm announced this week. Along with Varana, the raise was led by Samsung Ventures, Cardumen Capital, OurCrowd and XT Hi-Tech. SK Hynix, Cleveland Avenue, Korean Investment Partners, StoneBridge and Glory Ventures also participated.
NeuReality, founded in 2018 by CEO Moshe Tanach, says its hardware and software solutions lower the overall complexity, cost and power consumption of using AI. Varana was an early investor, participating in the startup's first seed round, and has been part of the startup's board of investors since its early days, the firm's co-founder Philip Broenniman said.
"[Tanach], his team and their [intellectual property] ticked all the boxes in our diligence process many times over," Broenniman said in a statement to Colorado Inno. "With the growth of AI data calls growing exponentially, the industry need for an innovative, AI-optimized system built from the ground up was clear."
NeuReality plans to use the funding to finalize its AI inferencing chip and launch it to customers in early 2023, according to Varana Capital. Inferencing chips help bolster generative AI, a process that produces images, audio, text or other outputs based on what data AI systems were trained with through machine learning.
The chips can be used to get faster results from systems such as Stable Diffusion, a deep-learning model released this year that takes in texts and generates images. The model is being used by Lensa AI, an art-generating application that thousands of users have flocked to this week. The app, created by the company Prisma Labs, takes users' selfies and generates portraits in a variety of styles with the users as the subject. As of Wednesday, Lensa AI was the top application in Apple's App Store.
According to PitchBook, the recent hype around text-to-image AI models drew enthusiasm from venture capitalists about generative AI during the third quarter of this year, during which there were several quick raises for the technology.
"Demands for AI inference are growing exponentially, and there is a global need for the NeuReality solution, which lowers the cost and power consumption of scaling these applications," said Ezra Gardner, a Varana co-founder who sits on the NeuReality board. "We are very excited to start shipping these chips next year."
Varana, founded in 2012, is dually based in Denver and Tel Aviv. It focuses primarily on early-stage startups in Israel. Last year, it joined a high-profile team of investors to co-lead a $74 million round in TriEye, an Israeli startup that creates sensing technology that assists autonomous vehicles to see better in poor conditions. Varana was joined by Samsung, Porsche and Intel for that deal, among others.
