Rossum, a cognitive capture software startup out of the Czech Republic, just closed a remarkable Series A round of $100 million to ramp up what it’s calling a cloud-based universal document gateway. To our knowledge this is the largest single investment ever into a capture software startup.
Founded just five years ago by three university students, the company began by offering AI-powered data extraction services in the cloud for common transactional documents such as invoices. That – as Deep Analysis readers will know – quickly became a crowded field with aggressive competitors like Hyperscience and Anyline. Rossum has wisely expanded its offering beyond the single element of data extraction, and now plans to sell an end-to-end solution for all B2B document transfers.
With apologies to the founders of Rossum, this is not a new concept. Around 2006, Captaris (now part of OpenText) launched the Universal Document Interchange platform to chase the same business problem and made several acquisitions to build out the platform. And circa 2010, Kofax and Ariba teamed up to add paper-based documents and data into the Ariba e-commerce platform. Esker has offered a B2B document exchange service for many years. These and other similar offerings included some machine learning to reduce human tasks.
None of these previous attempts at a universal document gateway has attracted this level of investment nor achieved anywhere near the type of commercial success that a $100M Series A would expect. What could be so different about Rossum to attract such a high investment?
The founders claim to have invented text analytic algorithms that “rival Facebook”. Maybe. However we regularly speak to other talented AI innovators who demonstrate similarly impressive AI in their products and also have customer references to prove it. Looking deeper, it appears Rossum has leveraged the recent advancements in deep learning that we have covered here. Again, that is hardly unique. See our recent reports on Indico, Eigen, Rule14, and Haystac.
It’s also possible that the $100 million round was influenced more by the current competitive investment environment than by the actual business plan. Eigen, another cognitive capture startup with a similar platform and vision for a ubiquitous unstructured data exchange, has attracted nearly $80 million to date.
As document process automation experts, we have long advocated for an industry standard to exchange business documents and thus eliminate the expensive, time-wasting friction inherent in today’s typical B2B document communications. It’s a bit like the Holy Grail. Perhaps the team at Rossum has finally cracked the code.
We look forward to closely tracking Rossum’s progress over the next year to see how this works out. Will they succeed in finally boiling the ocean where others have failed, or will they end up focused on a narrower (but potentially more valuable) vertical industry solution?