Paris has quickly established itself as a major European hub for AI startups, and now another deal in the works could cement that position even further.
by the pool.aia prolific Paris-based artificial intelligence company that builds tools to speed up software development is in the process of raising at least $400 million, at a $2 billion post-money valuation, sources tell TechCrunch.
Bain Capital Ventures and DST are in talks to co-lead the round right now, sources tell us. BCV is a previous backer of the company and DST is a new investor. Bain’s involvement has been reported in the past, with PitchBook noting that this is about $450 million.
Poolside made headlines last August when it became yet another AI startup in town to raise a big round. Pick up 126 million dollars from backers that included, in addition to BCV, early-stage specialists such as London’s Air Street, Abstraction and Scribble Ventures, and France’s New Wave and Frst. Bpifrance, Felicis, Point Nine and Redpoint were also in the round. None of the investors contacted would comment for this story. Poolside’s CEO did not respond to our request for comment.
Mistral and H, two foundational model companies, are among those that have also raised 9-figure seed rounds ($113 million and $220 million respectively) out of the city. The City of Light might have to be renamed the City of AI at this rate.
Looking at the bigger picture, it sometimes seems like the market has overheated, very quickly, for AI startups, which collectively raise many billions of dollars when you also include companies like Anthropic and OpenAI. Do we need another major AI company, you ask?
There are several reasons why Poolside is getting this level of funding to take its own big swing at the AI production opportunity:
– Power of the founding team and its connection to the company space. Both are steeped in the world of developer tools and DevOps. One founder, CEO Jason Warner, was GitHub’s CTO and led engineering for Heroku and Canonical. The other, CTO Eiso Kant, previously founded Athenian, which had built a suite of tools for developers to help them optimize how they build and operate. (That company was acquired by the Linux Foundation for an undisclosed amount.) Warner was also previously a VC at Redpoint and knows the value and language of VC-founder interaction.
– The problem is solved. Unlike those core LLM models that are more general in their approach, Poolside (for now at least) looks at one use case in particular: helping developers work faster. This will resonate with investors and is reminiscent of a memorable essay written by paul graham years ago about startup ideas, building tools you know you’ll need, which by default means founders and possibly other technologists should need.
Although Mistral also focuses on developers and developer tools, not to mention Microsoft’s adaptation of OpenAI for GitHub (indeed OpenAI is about its APIs being used by developers as well), there have been some notable examples of how to code is one of the more problematic blind spots (again, for now at least) for more general LLMs. Right now, there is a window of opportunity to build this, and build it better than a more generic approach.
That’s not to say Poolside isn’t thinking big, too. In a three-step plan outlined on her website, she notes that she eventually hopes to work with, after developers, anyone who wants to write code and software. and then, after that, “Generalize these capabilities beyond software to all other fields.” NBD!
– The first signs of what they built. What I haven’t seen is if the company has released a product in general availability yet, but there are some indications that they are working and in development (and maybe running in private beta?). Its computer supplier, IREN, in April mentionted that Poolside had strengthened its cloud services agreement with the company.
– Last, but certainly not least, there is monetization. As a source close to the company told me, there are many examples of AI targeting different market sectors, but not many that have clear indications – much less proof – of monetization potential. (Yes, OpenAI’s big deal with PwC could open the door to more enterprise ventures, but that could be a multi-year effort; in the meantime, it remains to be seen what the uptake in any enterprise might be .)
However, with Poolside, if you consider the opportunity and scale of building co-pilot tools for developers, it may well be one of the best and simplest places to implement AI if done right. It’s a clear, big need, and all computer programming has a syntax, so it’s not as open as many other areas where artificial intelligence is applied. Plus, it has constraints, performance indicators and benchmarks – a winning combination for investors and startups looking to build businesses.
We’ll update this post as we learn more.
