Artificial intelligence startup in Raleigh has the smarts to be a billion dollar company – WRAL Tech Wire

Editors note: This article is part of a multimedia series called Tomorrows Unicorns: A look inside Raleighs $1B startup pipeline, produced in conjunction withInnovate Raleigh. The series aims to spotlight some of the regions homegrown startups tipped to hit the $1-billion valuation mark, thus becoming a so-called unicorn in the language of investors, in the not-so-distant future.

RALEIGH Three years after ex-Epic Games CEO Michael Capps first launched Diveplane, a company aimed at keeping the humanity in artificial intelligence (AI), its notched a series of big wins.

In just the last year, the Raleigh-based startup landed partnerships with healthcare giants like Duke Health, and the UKs NHS Foundation Trust and BREATHE, a health data research hub.

It also closed on $3 million in new funding, bringing its total raised to around $10 million to date. Its even attracted star-studded investors, including US womens soccer stars Megan Rapinoe and Mia Hamm.

Meanwhile, Capps hinted other big deals could be in the works.

I cant speak to it yet, but were partnered with some cool organizations, he told WRAL TechWire in a Zoom call. Were lucky to sort of punch above our weight class in the industry, so Ill just leave it at that.

We had a long path of building software, he added, but now that weve started commercializing, were seeing much better uptake. Were at that wonderful phase where companies are now calling us.

While he wouldnt disclose annual revenue figures, he said: We expect to grow 3X in the next couple of months.

Could his firm be on track to becoming a $1-billion enterprise, otherwise known as a unicorn in venture capital circles?

He didnt rule it out: We have significant growth potential.

Its fastest-growing product, GEMINAI, creates a synthetic twin data set that enables sharing and analysis of highly sensitive data while protecting an individuals privacy. The new data is accurate and statistically equivalent, but omits any personal identifiers, like name or date of birth.

The uptick comes as data breaches are on the rise.

Healthcare breaches, alone, have nearly doubled since 2018 and continued to climb through the first half of 2021, according to areportby Critical Insight, a Seattle-based healthcare-focused cybersecurity firm.

Meanwhile, more than 93% of healthcare organizations experienced a data breach in the past three years (Herjavec Group).

And its costs big money.

The healthcare industry lost an estimated $25 billion to ransomware attacks in 2019 (SafeAtLast).

Data privacy affects us all, and were really seeing a shift in the market, Capps said. Its no longer enough to simply mask or anonymize. Organizations must go further to protect the most intimate of data sets, and thats what were amazing at.

Diveplanes Michael Capps and his fiance, Elizabeth Chance.

Diveplanes AI technology spun out of Hazardous Software, a company founded in 2007 by Chris Hazard, Diveplanes co-founder and chief technology officer.

Hazard holds a PhD in computer science from NC State, and worked as a software architect at Motorola and Kiva Systems.

Capps, meanwhile, is a fixture on the local Triangle startup scene. Born in Raleigh, he began his career with post-graduate degrees at UNC-Chapel Hill, MIT and the Naval Postgraduate School. Later, he spent nearly a decade as president of Epic Games, creators of mega-hit Fornite, and one of the regions early breakout unicorns, a company valued at more than $1 billion. (Today, Epic Games is estimated to be worth just shy of $30 billion.)

As his LinkedIn profile notes, his tenure included a hundred game-of-the-year awards, dozens of conference keynotes, a lifetime achievement award, and a successful free-speech defense of video games in the U.S. Supreme Court.

By 2013, Capps decided his time was up. But it didnt take long for him to sniff out his next venture.

He met Hazard through a mutual acquaintance on Raleighs startup scene, and shared the same thoughts on the future of AI and the ethical use of data.

By 2018, Diveplane was born. Among its missions: makingblack box AI,any artificial intelligence systemwhose inputs and operations are not visible to the user, easier to interpret and understand.

Big picture, we want to keep human decision-making in automated systems, Capps said. When [Hazard] finally told me about [his declassified work], I was like, You have explainable machine learning. Weve got to put this in front of everyone.

Diveplane has built what it calls the worlds first human-understandable machine-learning platform. As it boasts on its website, its tools are trainable, interpretable, and auditable.

Apart from GEMINAI, it has other products like SONAR, an anomaly detection tool to identify fraud, and ALLUVIAN, an analysis tool for the real estate market.

The name Diveplane is derived from the parts on a submarine that make it dive and surface. (Capps once taught at a Naval post-graduate school, and Hazard also worked for the Department of Defense.)

Its also metaphorically significant. AI is about searching up and down, high and low, Capps told TechWires late Alan Maurer back in 2018.

Diveplane CEO Michael Capps with his kids

Diveplane is now at an inflection point. At last count, it has 14 patents approved and another 40 patents pending. Its scaling across multiple verticals, including finance, healthcare, and defense. Another big raise is also likely on the cards, probably in the next few months.

Still, he described enterprise sales as slow and painful.

Government, intelligence officials, healthcare and finance leaders, theyre not fast to trust. [Were] like a locksmith. [Theyve got to] trust us with the jewels.

But he remains confident.If the National Security Agency is using it, and Duke is using it, its a lot easier to convince MasterCard to use it. Once we convince them, or whoever, it all falls.

Before the pandemic, Diveplane had offices in North Raleigh. But now theyre all working remotely. The team now stands at 22, and is looking to add a senior engineer and developer to its rolls.

Above all, Capps said making big profits comes secondary to his main objective: social impact.

Capps said hed eventually like to opensource Diveplanes technology.

Some of our tools, if they were free and we can afford unlimited compute, I would love to give them all away. I cant afford to do either of them; but as soon as I can, I will. Thats the goal.

NOTE: A LinkedIn Live chat with the founders is scheduled for today at 12pm. Check WRAL TechWires LinkedIn page for the live stream.

This editorial package was produced with funding support from Innovate Raleigh and other partners. WRAL TechWire retains full editorial control of all content.

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Artificial intelligence startup in Raleigh has the smarts to be a billion dollar company - WRAL Tech Wire