Alongside our friends at Hoxton Ventures, we are privileged to co-lead the Series A for Behavox, a London-based company that is building the next-generation compliance surveillance platform for banks, hedge funds, traders, brokers, and other financial institutions utilizing NLP, voice analytics, and advanced neural networks.
We have always taken an uncorrelated view of the world at Promus Ventures in our investing approach. We like to keep our thesis simple (People. Product. Potential.) and look for teams that run through walls to build companies that solve significant pain points that most often founders have experienced personally. Our investments into NLP (natural language processing) startups such as Kensho and StatMuse, as well as other AI investments, including CrowdFlower, have also shown us the power of software to provide detailed machine-learning insights into data-centric verticals utilizing this technology.
Having worked many moons ago at Masters Capital (hedge fund) as well as M&A at Merrill Lynch, I have witnessed firsthand many areas where employees knowingly (and unknowingly) can run adrift of rules and regulations that govern their behavior. There is a vast amount of voice and activity data that is generated today from financial industry compliance departments and this will only continue to exponentially increase. The Behavox team has built a machine-learning platform that is able to sort and sift through aggregated data ponds to distinguish normal from nefarious conversations and actions in real time.
The timing of Hoxton Ventures’ and Promus Ventures’ investment into Behavox only days after the Brexit vote is also worth a comment. The fog of the Brexit decision is still upon us, and it is rather early to be opining on how everything will ultimately play out. There is much to be worked out in the coming years. The ability to scale a fast-growing startup with exceptional talent in any market is of vital concern to any successful company, and we don’t expect to see a mass exodus of front- and back-end developers out of London anytime soon. Although it appears there will be more friction in bringing talent into Britain, many of Promus Ventures’ US-based startups employ satellite teams in Europe and other places quite effectively.
Much ink has already been spilled on how Berlin, Dublin, Amsterdam, Frankfurt, or Paris (pick your spot) will emerge as the new HQ for European startups. While others wax poetic about the soon fall of London as a startup hub, we politely (in our best British accent) disagree. While we advise all startup teams to wisely evaluate the best place to run their company, we are not of the view that new and/or established London startups, many of which have local investing VCs, are just going to get up and leave because of what may result from Brexit. The London community has worked hard over the last decade to create the strongest startup network in Europe filled with technical talent, able founders, savvy tech-buying consumers, and (importantly) institutional capital that isn’t leaving anytime soon. We think highly of the aforementioned cities as well, and are not disparaging these networks in any way (great startups will continue to be built in these cities also), but we just believe London will remain the European center of startup investing in the foreseeable future.
We are excited to help the talented Behavox team build their company as well as scale into the US and introduce them to potential large customers who are pleading for a compliance solution that Behavox has already architected. The team’s platform is a global product — the winds of regulation are still blowing strong across borders and we don’t see this abating any time soon. Hoxton Ventures and Promus Ventures have been lucky enough to have previously invested in successful AI/Machine Learning teams, and this experience gives us both further excitement to help Behavox sell its products across the world.
Recipients of this post are not to construe it as investment, legal, or tax advice, and it is not intended to provide the basis for any evaluation of an investment in any fund. Prospective investors should consult with their own legal, investment, tax, accounting, and other advisors to determine the potential benefits, burdens, and risks associated with making an investment in any fund.
