At Greycroft, we aim to bring things of real wonder into the world by partnering with exceptional entrepreneurs. Today, we are excited to announce our continued commitment to Contextual AI. We’ve backed founders Douwe Kiela and Amanpreet Singh since their seed financing in April 2023. Today, we are excited to share that Greycroft is leading the Company’s $80M Series A, and I will be joining Contextual AI's board.
Transforming the Enterprise with Generative AI
Contextual AI’s mission is to change the way the world works through artificial intelligence. Their full-stack turnkey solution solves real world use cases for customers and represents a massive opportunity. Applicable across a wide array of workflows, whether enhancing productivity, creating a new software stack or automating knowledge work, we believe the Company’s market opportunity spans all of enterprise software.
Many companies have tried to piece together solutions using off-the-shelf retrievers and language models but often fall short, unable to achieve the accuracy needed for real-world performance. Contextual AI addresses this challenge with its RAG (Retrieval-Augmented Generation) 2.0 technology, an end-to-end system designed to reduce hallucinations (high-confidence wrong answers), enhance attribution (knowing why a model says what it says), and improve overall accuracy. RAG 2.0 enables enterprises to automate tasks, allowing employees to free up time to do more impactful work.
The Power of RAG 2.0 Technology
Douwe Kiela, a pioneer in this field, led the development of RAG during his tenure at Facebook AI Research (FAIR), assembling and guiding the research team behind this groundbreaking technology. Now an industry standard, RAG is used extensively to enhance the efficiency and effectiveness of language models on enterprise data.
In March, Contextual AI announced RAG 2.0, their state-of-the-art technology that optimizes the language model and the retriever as a single system to produce robust and reliable AI for enterprise-grade performance. The Company’s approach focuses on two key principles:
Building systems over models: At Contextual AI, the core language model is just part of a larger system designed to meet customer needs. End-to-end optimized systems with simpler models often outperform better models in poorly integrated systems. The key to enterprise solutions is effective model contextualization.
Specialization over AGI: Contextual AI understands enterprise problems are specific and well-defined, requiring specialized solutions. In these cases, specialized systems consistently outperform one-size-fits all generalist ones.
Contextual AI delivers precise, accurate, and consistent outcomes that generalist AI solutions often cannot match. Compared to off-the-shelf solutions, Contextual has shown improvements of up to 4x in accuracy compared to the baseline, and the end-to-end system has enabled AI that is truly production-grade.
Customers of the Contextual AI Platform
Contextual AI is working with Fortune 500 customers, initially targeting some of the highest-value and most complex applications: technical support for hardware engineers, complex research for investment managers, and information discovery and synthesis for wealth advisors.
Qualcomm (NASDAQ: QCOM) uses the Contextual AI Platform to manage tens of thousands of technical documents and respond to customer queries and issues, significantly improving efficiency and the product quality for millions of end consumers.
HSBC (NYSE: HSBC) leverages Contextual AI to enhance investment research insights for retail and private banking managers, valuing not only the Company’s cutting-edge technology, but also its robust security and compliance capabilities.
The Future of Enterprise AI
When we first invested in Contextual AI, we recognized the potential for RAG technology to revolutionize enterprise AI. More importantly, we were impressed by Douwe and Aman and their combination of research expertise and commercial know-how. They continue to attract top talent, growing the team to over 50 employees with leading experts that are both AI-native and enterprise-native, including some of the most prominent large language model pioneers.
We look forward to continuing our collaboration with Douwe, Aman, and the entire Contextual AI team as they meet the growing demand for generative AI in enterprises worldwide. Read more from the Contextual team.
Disclaimer: This publication was prepared solely for informational purposes and should not be viewed as a current or past recommendation or a solicitation of an offer to buy or sell any securities or to adopt any investment strategy. The information included herein is based on the opinions of the authors and nothing shall, or is intended to, constitute investment, financial, legal, accounting, or tax advice by the authors or Greycroft. This publication contains forward-looking statements, which are based on beliefs, assumptions and expectations that may change as a result of many possible events or other factors. Such statements involve known and unknown risks, uncertainties and undue reliance should not be placed thereon. The information in this document has been developed internally and/or obtained from sources believed to be reliable; however, Greycroft does not assume any responsibility for the accuracy or completeness of such information. Greycroft does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by Greycroft, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Greycroft is available at https://www.greycroft.com/investments/.
