A Boston startup focused on artificial intelligence has raised $14 million from investors to develop software used with drones, self-driving cars, and other machines.
Neurala Inc. makes software that lets machines equipped with cameras interpret images and recognize objects, partially automating tasks. For example, companies can use the software to aid in drone inspections of infrastructure such as cellphone towers, lowering the need for employees to review tape.
“So what they would see is a fast-forward to the spot where the problem is identified, and then a box drawn around the spot and a label saying this is corrosion,” Roger Matus, the company’s vice president of product, said in an interview last week.
Matus said Neurala is also working with a “brand of car that you see every day” to help develop autonomous vehicle technology, but the company is not allowed to name the automaker.
“What they’re interested in is knowing where and what the objects are in front of them,” he said. “A lot of sensors can tell you that there is an object in front of the car, but identifying exactly what that object is and where it is in real time is difficult.”
Neurala was founded in 2006, spun out of work its founders conducted as students at Boston University, where the company still maintains its offices. Technological advancements have helped the company grow in the last three years, chief executive and cofounder Max Versace said.
“Robots were still very, very expensive [in 2006]. There were no drones whatsoever,” he said. “The algorithm needed sound refinement. . . . It was a hard technology to build.”
Participating in the Techstars Boston startup accelerator program in 2013 gave the company a boost, Versace said.
Neurala has now raised $16 million. The latest round was led by Utah-based Pelion Venture Partners. Other investors included Motorola Solutions Venture Capital and Draper Associates, the firm founded by veteran Silicon Valley investor Tim Draper.
Versace said the company will use the funding to expand its 25-person team and to improve its technology. Neurala hopes its technology will eventually allow machines to become fully autonomous.
While Neurala’s customers are mostly corporate, the company has consumer ambitions. It created an app called “Selfie Dronie,” which turns a drone into a self-flying camera. Eventually, the company hopes to use its technology to power toys and household robots.
But so far, most of the Neurala’s business has been in the drone sector, and that’s what has mostly caught the attention of analysts.
“Trendsetters like Neurala are part of the reason we feel the aerospace sector is well positioned to leverage AI capabilities,” according to an August report from the technology market research firm Tractica.
Bruce Daley, the author of that report, said Neurala is one of hundreds of companies working on artificial intelligence technology. He said several companies can be successful because the demand for the technology is likely to grow across many industries.
“There’s competition and there’s numerous little companies that are chasing this enormous opportunity,” Daley said. “There are multiple companies doing what they’re doing but the market demand is going to be so large.”
Investors remain bullish on artificial intelligence. While a recent report from PricewaterhouseCoopers and CB Insights found that overall US venture investments fell off in the fourth quarter of 2016 compared with the third quarter, artificial intelligence companies actually saw greater investment. The sector saw 71 deals worth $705 million in the final months of 2016, according to the report.
Adam Vaccaro can be reached at email@example.com.