We just invested in Labelbox as part of their $40M series C led by B Capital, here is some of the coverage: Business Insider, VentureBeat, company’s blog post. Tau Ventures is an AI-first fund in Silicon Valley investing primarily in seed but we occasionally take later bets when we see immense promise. Previous investors in Labelbox including a16z, Gradient, FirstRound and Kleiner have also invested in this round. Labelbox is a collaborative training data platform to create and manage labeled data for computer vision applications. The company was founded in 2017 and impressed us with (1) a strong need, (2) building an engineering-focused team, and (3) creating a differentiated product.
1) The Need
We built Tau Ventures explicitly with the thesis that the democratization of AI tools will power an unprecedented number of applications. In fact, below is a slide from our own deck:
Labelbox is the crucial pickaxe, providing a way for companies to structure their data. We also see multiple winners in the near/medium term given this is not merely a growing but an exploding market.
2) The Team
Labelbox has grown exceptionally by any startup standard, from the small team from 2018 pictured below to 99 people today. We see engineering prowess in the company starting with the three cofounders. CEO Manu Sharma designed and built products at transformative companies such as Planet Labs and DroneDeploy. COO Brian Rieger began his career on the Boeing 787 Dreamliner and eventually helped put hardware on the International Space Station. We recognize significant competition in the Labelbox space but also believe the team is well placed to win deals.
3) The Product
Labelbox is a horizontal product and as such its customers are spread across many industries. Overall the company has three main cohorts — enterprise, mid-market and federal — and all customers until recently were inbound. They use a mix of different pricing strategies based on a per license fee and a usage amount based on the number of annotations of images. The usage fee allows the company to grow revenues proportionally to the customer’s use of AI. Also, Labelbox’s tech doesn’t have a human in the loop like most of its competitors. It makes them more friendly to business process outsourcing companies which can utilize their tool with their own employees. All of these factored into our appreciation of what the team is building and the future potential.
We are honored and excited to be part of Labelbox’s journey, using technology to solve a big problem. More at http://labelbox.com.
Originally published on “Data Driven Investor,” am happy to syndicate on other platforms. I am the Managing Partner and Cofounder of Tau Ventures with 20 years in Silicon Valley across corporates, own startup, and VC funds. These are purposely short articles focused on practical insights (I call it gl;dr — good length; did read). Many of my writings are at https://www.linkedin.com/in/amgarg/detail/recent-activity/posts and I would be stoked if they get people interested enough in a topic to explore in further depth. If this article had useful insights for you comment away and/or give a like on the article and on the Tau Ventures’ LinkedIn page, with due thanks for supporting our work. All opinions expressed here are my own.