MLOps supplier Iguazio has been bought by McKinsey and Company to form the hub of its QuantumBlack AI practice in Israel.
Machine Learning DevOps (MLOps) refers to operationalizing ML processes in a cloud-native application world. This is a vastly complicated process because every customer’s combination of sensor feeds, log information, databases, AI pipelines and stages and component processes is different – effectively making every implementation a custom one and delaying if not even defeating business AI projects. Iguazio’s software technology makes the process faster and more dependable. That AI project completion reliability and speed is what McKinsey is buying.
McKinsey senior partner and QuantumBlack global leader of alliances and acquisitions Ben Ellencweig issued a statement: “After analyzing more than 1000 AI companies worldwide, Iguazio was identified as the best fit to help us significantly accelerate our AI offering – from the initial concept to production – in a simplified, scalable and automated manner.”
By working with Iguazio McKinsey says its QuantumBlack unit will be able to provide clients with industry-specific AI solutions that are five times more productive, eight times faster from proof-of-concept to production, and twice as reliable.
Asaf Somekh, co-founder and CEO of Iguazio, also put out a statement: “McKinsey’s experience and QuantumBlack’s technology stack and expertise, now coupled with Iguazio, is the ultimate solution for enterprises looking to scale AI initiatives in a way that directly impacts their bottom line. We’re thrilled to join the McKinsey family and embark on this next chapter for Iguazio.”
Iguazio’s 70+ staff will join QuantumBlack. No one is saying how much McKinsey – which has acquired more than 20 other businesses in the past few years – is paying for Iguazio. That biz has publicly raised $72 million in venture capital funding across, A, B and extended B-rounds. The last round took place in January 2020 and raised $24 million.
Has Iguazio been trading profitably since this funding round?
Somekh told us “Iguazio had considerable market traction, with key clients in the manufacturing, technology, transportation, financial services and other industries. No doubt, there have been challenges – with a global pandemic and then economic recession which happened in the last few years – but we were seeing great success with clients, were positioned well in the industry (in industry reports by Gartner, Forrester, GigaOm etc.), had strong partnerships with all the leading technology providers and a growing community.”
Who approached who first; McKinsey or Iguazio?
Ellencweig replied: “The relationship between Iguazio and McKinsey started over a year ago. … The natural synergy and great alignment was realized over time, both on the technology side and the talent / people. It was a natural progression of our relationship.”
How much is McKinsey paying for Iguazio?
Alexander Sukharevsky, senior partner and global co-leader of QuantumBlack, answered this question: “McKinsey is a private company and we are not able to discuss financials unfortunately. What we can say is that the entire Iguazio team will be joining QuantumBlack, McKinsey’s AI arm, and the technology will augment our offering to scale AI for enterprises globally.”
Israel’s Calcalist media site estimated the price to be $50 million, somewhat less than the total $72 million amount of Iguazio’s funding.
Sukharevsky added: “One of the main reasons behind the acquisition is the world class talent we saw at Iguazio. The entire Iguazio team will be staying on. Moreover, Iguazio will form the foundation for the fifth Global R&D Lab for QuantumBlack, right here in Tel Aviv – with other locations in London, New York, Gurgaon and São Paulo. We are excited to expand and establish this location with access to some of the world’s best tech talent.”
The extended B-round funding was led by INCapital Ventures, with participation from existing and new investors, including Samsung SDS, Kensington Capital Partners, Plaza Ventures and Silverton Capital Ventures. Dell Capital is another investor in Iguazio.
Are the Iguazio investors happy at this outcome?
Back to Somekh: “I cannot comment on behalf of our investors. You will be seeing their public statements in few hours to address this question. I do want to take the opportunity to thank them for their ongoing support and friendship.”
McKinsey is one of the top three global business consultancies – a somewhat discreet and secretive one, with more than 30,000 employees working in 60-plus countries. QuantumBlack is its data and analytics operation and nothing to do with quantum computing, a field in which other parts of McKinsey are active.
Iguazio was started up in 2014 by several co-founders: CEO Asaf Somekh, CTO Yaron Haviv, chief product officer VP architecture Aaron Segev, and VP architecture Orit Nissan-Messing. Eran Duchan lists himself on LinkedIn as a prolific code monkey and co-founder and says he is involved in R&D. Download a copy of Iguazio’s Enterprise Data Platform datasheeet here.
