VCs commit $15m to Japanese AI specialist
A group of venture capital firms, including SBI Investment, have invested $15 million in a Series B round for Cinnamon, a Japanese artificial intelligence (AI) company focused on office automation.
Sony Innovation Fund, SMBC Venture Capital, FFG Venture Business Partners, Sparx Group, and a VC fund managed by Nomura Holdings also made contributions, while a debt component was provided by Sumitomo Mitsui Banking Corporation. Other participants included Itochu Corporation, and IT services companies Netyear Group Corporation and TIS.
Cinnamon describes its core business area as "white-collar productivity improvement" and specializes in the development of AI-enabled systems that reduce the amount of human labor in repetitive paperwork. Its flagship product, Flax Scanner, is said to automate the reading and digitization of unstructured documents with a 99% accuracy rate.
The fresh capital will be used to hire new staff, especially AI technicians, and expand the customer base in markets including Japan, Vietnam, and Taiwan. Cinnamon will also invest in strengthening its existing technologies and user interface systems, pursue R&D in new products such as voice recognition, and drive an expansion in the US.
"The fact that the company has put in place a system to attract and develop talented personnel in the field of AI at its development center in Vietnam leads us to believe that the company has an even brighter future," Nomura said in a statement. "We hope that the company will develop high-precision AI products specializing in operational domains, which cannot be achieved by generic AI engines."
Automation of clerical work has proven an attractive segment of business process outsourcing (BPO) investment theses in private equity. Previous activity in this area includes J-Star exiting document scanning company Primagest to Orix Corporation and CLSA Capital Partners acquiring Outsourcing Investments, a BPO firm focused on technology-oriented staffing services.
SBI was active in this space last year with participation in a $15 million Series A for Singapore-based AntWorks. The company focuses on enterprise robotic automation equipment and cognitive machine reading engine technology that is said to be rapidly outdating an existing industry standard known as optical character recognition.
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