20 October 2017
Investing in Invenia
We are pleased to announce our largest investment ever in Invenia. We lead the first institutional round in the company and joined the board. We’re most pleased to be partnering with Arena (lead by Feroz Dewan, former head of equity investing at Tiger Global), Raptor (lead by Jim Pallotta, former Vice Chairman of Tudor Investment Corporation) and Social Capital.
By way of background, the company builds models that predict the demand and supply of electricity. They collected troves of proprietary data — on grid operations, energy usage, weather, etc. — and modeled the physical flows of power so that they can build the best predictive models for energy usage in the world.
Invenia doesn’t have a sales or marketing function. The company makes money by getting paid for its predictions that improve the ability for the Independent System Operators (ISOs) of the electricity grid to avoid blackouts, or producing so much energy that we end up sinking it into the ocean. There’s a lot of detail here but essentially the company participates as a virtual utility in various electrical grids (e.g. Texas (ERCOT), North East (PJM) and California (CISO)) and gets paid for making accurate predictions by the ISOs of those grids.
This is indicative of what’s next for Zetta: partnering with more companies that solve large, societal problems with machine learning technology. We have a general, moral imperative to maintain the quality of life for people all around the world. This is difficult to satisfy as populations increase and resources decrease. However, machine learning technologies are particularly good at solving complex optimization problems. We admit that there’s a lot of risk in solving societal problems such as optimizing energy distribution, healthcare systems or food production with probabilistic methods. However, advances in machine learning technology are such that it’s possible and companies like Invenia go beyond probabilistic (machine learning) methods to ensure explicit, utilitarian consideration of trade-offs. We’ll write more about the risk curve of adopting AI applications and going beyond probabilistic methods soon.
Invenia is a world-class team based in Cambridge and Winnipeg. Christian (CTO) studied machine and biological learning, and quantum computation under the great Professor David MacKay while Matt (CEO) studied how utilities work among the many power companies in Manitoba. Matt’s co-founders were the brilliant physicist Cozmin Udedec and machine learning researcher David Duvenaud. Christian and his Cambridge-based team are also lucky enough to work with Professor Zoubin Ghahramani.
Incidentally, we are actively working with a number of companies in Canada and England because we’ve found phenomenal people researching and implementing machine learning technologies in both places. Please do get in touch if you’re working on a great idea there and would like to partner with the first firm in the world to completely focus on your field.
We can’t wait to see Invenia dramatically increase efficiency on the power grid, reducing CO2 emissions to create a better atmosphere for us all.