InstaDeep’s acquisition is a classic case of an African startup gone global  • TechCrunch

This January, Germany Vaccine giant BioNTech has announced it has agreed to buy Tunisian-based AI and London-based headquarters InstaDeep for up to 2 562 million, including a 200 200 million investment.

InstaDeep deals – subject to regulatory approval and expected to close in the first half of this year – are quite impressive for a number of reasons. First, when completed (at $ 682 million, adjusted in US dollars), it will be the largest acquisition deal involving start-ups focused on Africa or Africa at the best value. Negotiate for Sendwave, DPO Group and Paystack. Second, unlike other well-known acquisitions, InstaDeep is not fintech. And thirdly, although early believers who have seen InstaDeep growth from local companies to global start-ups know that there are enough exit options, they do not think the acquisition will happen anytime soon. According to Khaled Ben Jilani, senior partner at AfricInvest, one of InstaDeep. Previous investors by phone with TechCrunch.

In 2019, InstaDeep raised $ 8.5 million in Series A for $ 30 million, according to familiar sources, a round led by AfricInvest, with the participation of New York-based Endeavor Catalyst and Big Business Angels. Widespread in the global AI industry. The investment is AfricInvest’s first venture into an AI startup, a decision based on the founders of InstaDeep selling its global vision to private equity firm Pan-African.

“InstaDeep is different from other companies in our pipeline because they really go deeper into technology compared to using technology in a specific field, which basically makes you an operator in that field. They are developing specific technologies that could affect many areas, ”Jilani noted on InstaDeep’s pioneering technology. “And it is also interesting, especially in Africa where such companies are rare. Therefore, when we had a discussion with Kevin about his vision and strategy, we immediately realized that InstaDeep could transform from an African leader in AI to a global player.

InstaDeep utilizes advanced machine learning techniques, including in-app learning enhancements in an enterprise environment that mitigates industries such as biotechnology, transportation, electronics manufacturing, and logistics. Ultimately, it helps companies streamline decision-making processes and increase efficiency.

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Karim Beguir and Zohra Slim set up a Tunisian startup in 2014 with “two laptops for $ 2,000 and lots of fun,” Beguir CEO told TechCrunch last year. The bootstrapped company – which did not receive outside funding until 2018 – relied on original AI research published by Beguir that led to the startup being discovered by specialized clients who later became partners and investors, such as DeepMind. Google and its prospective buyer, BioNTech.

Can InstaDeep’s global success be replicated in Africa?

As InstaDeep’s customer base grows, so does its team. The company has 240 employees across Tunis, London, Lagos, Dubai, Berlin, Cape Town, Paris, Boston and San Francisco. Also, InstaDeep’s ambition to become a global company has led it to relocate its headquarters from Tunis to London, which some publications have cited as its home, thus ignoring its African roots.

“InstaDeep is a global company, but in terms of origin and like the first company, there is no doubt that we are African,” Beguir told me over the phone. “One of the reasons we created InstaDeep is to show that there is real potential and opportunity for AI in Africa. So we want people to see us as an innovative business in Africa with deep technology that has reached “The universe has sent a powerful message of hope for space.” If anything, InstaDeep has shown that talented African companies can successfully serve customers around the world while building a bridge of talent that matches that growth.

On the other side of the table is a silly view that debates InstaDeep’s “Africanity.” Tunisia, due to its blocking government policy, is an unfriendly place to start or venture capital ventures – excluding InstaDeep. Tunisia ventures raised $ 17 million last year, according to VC Partech Report. That’s why most start-ups have to stay abroad to get funding. Also, InstaDeep’s influence in building AI talent on the continent is not discussed enough. Last year, the startup played a significant role in helping to design and nurture Africa’s AI ecosystem through the Deep Learning Indaba and AI Hack, hackathons and events featuring thousands of AI talent and researchers. 400 people attended. Most importantly, starting an African business that serves customers outside of the continent does not make it any less African. In fact, founders should be encouraged to create AI applications and businesses that present better exit opportunities than e-commerce, logistics and payments, areas that international companies think only when expanding into new areas.

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The impact of building InstaDeep globally – first, is that it puts the Tunisian technology ecosystem, and more broadly, the AI ​​industry in Africa is under the radar with the news of its acquisition. But it is too early to assume that because of that it will suddenly open the floodgates of investment in Tunisian technology or Africa’s AI market, which now has many industries that are hotspots for investment in the continent. Potential, especially with the use of technology in areas such as agriculture and manufacturing. Startups like Aerobotics and South Africa’s DataProphet have raised significant funds for this – however, patience will be required before any great action takes place.

To my question about whether InstaDeep is external, Begiur is optimistic that more success stories from Africa’s deep tech and AI communities will be told soon, especially when the venture capital market is booming. Turned out to be hot for AI-based innovations. When this happens, the CEO says he hopes the founders and investors reinvest in the space, something InstaDeep and AfricInvest intend to move forward.

“I believe AI is a great opportunity for Africa and I have talked about it. We always see AI as a technology and competition between developed countries. In fact, AI is critical to the success of Africa in the 21st century, and the reason is that it is the changing technology of our time. I think you will see many examples today from GPT and beyond its annoying potential, ”Beguir, who is half Tunisian and half French, continued. “But more importantly, the barriers to accessing AI are lower than the technology of the past associated with legacy companies and superpowers. “So it is a good opportunity for the continent.”

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In January last year, InstaDeep raised $ 100 million in Series B, more than 12 times what it mentioned in the previous round. This is the active interest of new investors, including Alpha Intelligence Capital, CDIB, Google and its new owners BioNTech, which launched a joint AI innovation lab in 2019 to deploy the latest advances in AI. And ML to create novel medicine for the range. Of cancer and infectious diseases. Following this investment, InstaDeep is looking at a number of acquisitions to increase its data collection capabilities to complement its AI system before BioNTech strikes with an acquisition offering that almost leaves most growth financing inaccessible. Is exposed.

“That’s crazy. Tell us honestly [InstaDeep and early investors like AfricInvest] Ben Jilani, whose company may be sitting on a conservative 10x + exit based on independent calculations, has said no. Expected to happen. InstaDeep has left a higher rating than it ordered for its B-Series, according to Beguir.

According to the acquisition statement, BioNTech and InstaDeep have already developed several AI-based applications that have been trained on public and proprietary datasets across various scientific fields. These include projects to increase neoantigen selection, sequencing optimization for BioNTech platforms, and development of early warning systems to detect and track high-risk SARS-CoV-2 variants based on their ability to escape Out of the immune system defense announced last January.

“With BioNTech, we have formed a partnership over the years and completed many successful projects together. We see great opportunities to build the next generation of immunotherapy and become leaders in biomedicine and AI. I believe this is an exciting time and we will have more to share in the coming months, “Beguir said of the acquisition without revealing any new information, adding that InstaDeep will use the funds. Its Series B will be funded to scale its teams and capabilities across Africa and globally. “It’s a continuation of what we Made in many ways.


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