article8An enterprise AI company spun off from Intel in early 2024 has secured more than half of a planned $70 million funding round at a $500 million pre-money valuation, according to its CEO, as it tries to capitalize on growing demand for AI systems in regulated industries.
The Series B funding round is structured in two tranches, with the first led by Spain’s Adara Ventures, co-led by Arun K., founder and CEO of Articul8. Subramanian (pictured above, centre) said in an interview. He declined to disclose the size of the initial tranche, but said the company expects to close the round in the first quarter of this year.
Articul8’s valuation for its current funding round represents an almost five-fold increase from the company’s $100 million post-money Series A valuation in January 2024. Since then, the Santa Clara-based company said it has surpassed $90 million in total contract value – the cumulative value of all signed customer contracts – from 29 paying customers, including Hitachi Energy, AWS, Franklin Templeton and Intel.
Subramanian told TechCrunch that Article8 was not under pressure to raise capital, describing the company as revenue-positive after a series of large venture contracts.
“We are not short of cash,” he said.
The company expects to end the year with annual recurring revenue of more than $57 million, Subramanian said, of which about 45% to 50% is already recognized.
Articul8 develops specialized AI systems that work within customers’ own IT environments rather than relying on shared, general-purpose models. Rather than selling standalone models, the company packages its technology as software applications and AI agents tailored to specific business functions, targeting regulated industries such as energy, manufacturing, aerospace, financial services and semiconductors, where accuracy, auditability and data control are critical.
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“Our competition is with almost everyone,” Subramanian said. “But today, the major competitors are cloud service providers, because they’ve realized that their model, as a general-purpose (offering), is all commodities.”
He said Articul8’s focus on specialized systems attracts customers who need predictable results and clear audit trails, something that is hard to achieve with general-purpose models running on shared cloud platforms.
Articul8 plans to use the Series B proceeds primarily to expand research and product development and grow its operations internationally, focusing on Europe and parts of Asia.
Subramanian said Adara Ventures’ participation will help accelerate European expansion plans, as the European Investment Fund backs the Madrid-based VC firm’s energy fund. He said the company is also looking to expand into markets including Japan and South Korea, where it has started working with large enterprise customers.
Subramanian said India’s Aditya Birla Ventures also participated in the current round.
Subramanian said Articul8 works with big tech groups including Nvidia and Google Cloud, adding that Amazon Web Services is both a customer and partner for the company on some deployments.
The company employs 75 people, about 80% of whom are focused on R&D, and teams are spread across the US, Brazil and India.
