Knife Capital Returns To Back South Africa’s DataProphet In $10M Series A
DataProphet, a South African company that offers AI software as a service to the manufacturing industry, has announced the closing of its $10 million Series A financing.
The Series A round was won by Knife Capital. The South African VC company made its initial investment in DataProphet in the beginning of 2018 through its KNF Ventures Section 12J fundraising vehicle. IDC of South Africa and Norican, a major supplier of equipment for metal surface preparation and finishing, are additional investors in the round.
In a statement, DataProphet claims that the injected funds will enable the company to make more investments in its industrial AI product line while enabling focused growth in particular geographical areas and manufacturing industry sectors.
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“This is where we’ll be applying a lot of this fund: to support international sales,” said CEO Frans Cronje. “And they’ll support functions needed in markets away from the major engineering hub, South Africa. So part of the investment will be used to develop a European sales office and subsequently a U.S.-based sales office to support customers and partners abroad.”
Why The Investor Invested
“Accelerating the international expansion of DataProphet, given the leading nature of its technology, is exactly the mandate of our new Fund — and it couldn’t be more fitting for our first investment to be a follow-on investment from our existing cohort,” Keet van Zyl, co-founder and partner at Knife Capital, said on the investment.
This is the first investment made by Knife Fund III, a $50 million fund formed last year to assist the international expansion of its portfolio companies.
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A Look At What DataProphet Does
Founded in 2017 by Frans Cronje and Daniel Schwartzkopff, the company provides prescriptive advice and suggested changes to manufacturers’ recipes to avoid making the defects that cause their products to be scrapped or reworked. The company said its flagship AI solution, PRESCRIBE, has helped its clients experience a significant and practical impact on the factory floor, reducing the cost of non-quality by an average of 40%.
Manufacturers use DataProphet at different points on their digitization journeys; data collation and centralization are crucial to kickstart them. The first product in DataProphet’s stack, CONNECT, enables manufacturers to augment their data infrastructure and bring data from where they’ve been using it for compliance in the manufacturing space to a point where they can use it for optimization. The company currently ingests about 100 million unique data points daily on its platform. With this data, PRESCRIBE can make informed decisions to reduce defects, scrap, or non-quality processes and improve manufacturers’ yield.
Cronje says DataProphet employs a hands-on approach, where it continuously monitors data streams and pushes advice and feedback to the operating floor, ensuring that its clients follow them. And in cases where clients don’t follow the advice DataProphet provides, the company engages with the customer to understand their concerns.
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“Usually, when we talk about reducing defects, scrap or rework by an average, we do a reduction of about 40% when the customer follows our advice,” said Cronje, who has a degree in management consultancy and statistics. “It’s a wonderful application of AI and manufacturing because it’s a deep application of the theory to realize practical, meaningful impact for our customers and their yield.”
The 50-person team primarily serves clients in the automotive, semiconductor, rubber, and foundry industries, with solutions deployed in manufacturing plants in Japan, China, India, Europe, South Africa, the United States, and South America. Braincube and Seebo are two of its international, rather than local, competitors.
“I think the way we differentiate ourselves is that we approach this from a holistic factory control where implementing our PRESCRIBE solution can enable a customer to realize this full site optimization,” commented Cronje on DataProphet’s unique selling proposition. “And there’s a second aspect: The solution we’ve got to enable customers to realize yield is an end-to-end prescriptive solution. What I mean by that is that it has the capacity to integrate some of the lowest data levels in factories. And we don’t see that in our competitors.” The chief executive also mentioned that, unlike other players, DataProphet doesn’t depend on its clients to have employees with data science capabilities, which defeats the purpose of providing an AI-as-a-service platform that thrives on organizing data infrastructure itself.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh