- No previous knowledge necessary: The Heidelberg-based start-up, paretos, has developed artificial intelligence-based data science platform that enables global corporations, innovative SMEs and growing start-ups to use AI systems that were only available to tech giants until now – and without major integration costs
- The founders have registered a patent for a novel approach that allows companies to create fully automated forecasting models, analyze complex data and administer strategic decisions with the help of target KPIs
- The first three widespread use cases – Dynamic Pricing, Customer Recommendations and Warehouse Optimisation – have already attracted customers such as Accenture, Getsafe or one of the biggest parcel logistic services in Europe
- $4 million seed funding from lead investor LEA Partners and existing and new business angels will be used for team and product development
Heidelberg, September 2021 – In the digitalized business world, data, key figures and measured values are the decisive requirements for long-term success. Artificial intelligence is indispensable for processing the growing amounts of information. The vast majority of executives (84%) have also recognized that they cannot achieve business growth without scaling AI systems. However, older established data analytics tools need to be operated manually by data experts and many businesses in Germany cannot access these skills and resources – either due to cost and time constraints or because data science talent is hard to find.
Data science without access barriers
paretos closes this gap: The Heidelberg-based tech start-up makes analysis processes for companies as easily accessible and integrable as an email programme. With the help of AI-based software as a service tool, innovative SMEs, dynamic start-ups and large corporations can carry out extensive data analyses without prior knowledge or the expertise of data science specialists. To this end, the young company was able to close seed financing of $4 million at the beginning of September. The main contributor is B2B tech investor, LEA Ventures, who also specialize in AI companies. “For most companies, AI is still an abstract concept. It often takes a lot of time and expert knowledge to introduce solutions but we were very impressed by the customer feedback and how easy it is to deploy paretos – a no-brainer for customer,” says Nils Seele of LEA Partners. “We are excited to be part of the data science democratization. Together with a strong angel consortium, we want to support Thorsten and Fabian in their vision to become the number one in Prediction & Optimisation as a service.”
The paretos principle
Based on existing company data, paretos analyzes optimization potentials and visualizes correlations in a user-friendly dashboard, so that everyone can obtain in-depth insights even without data expertize. Thanks to a modern user interface, all information can be managed quickly and easily and the automated optimization approach identifies completely new solutions faster and more efficiently than familiar analysis tools or manually calculated scenarios. This not only saves company time, but also costs.
“With our innovative approach, we want to enable teams and organizations to independently manage dynamic and complex problems,” explains co-founder and CEO, Thorsten Heilig. “Our goal is to democratize the entire data science process so that every company can evaluate its data as easily as possible and make strategically targeted business decisions.”
To that end, the founders are also involved in educational outreach: It is possible for any company to educate themselves on the benefits of AI for business optimization using their free webinars and product demonstrations, or they can learn how neural networks work and how barriers can be removed or avoided to attain different goals using YouTube videos.
Innovative optimization algorithm
At the heart of the software is the “Socrates” optimization algorithm that was especially developed for dealing with highly complex models. It is based on several years of research at the Munich University of Applied Sciences and is recognized and validated worldwide by, among others, the renowned Massachusetts Institute of Technology (MIT). Developed further by paretos, its performance outpaces even state-of-the-art algorithms from tech giants like Facebook.
“The challenge for the algorithm is the number of possible criteria and their interactions: To optimize complex business processes, thousands of scenarios have to be created and analyzed,” explains co-founder and CTO, Fabian Rang. “Only through high-performance machine learning are companies able to make the truly best decision for themselves and their situation.”
Complete process automation
Targeted optimization by the paretos algorithm makes companies more efficient and competitive. Among other things, the underlying software is capable of fully automating three of the most complex challenges in the business and marketing context:
- Targeting customers using personalized product recommendations, cross-selling options and impact analysis (Customer Recommendations)
- Dynamic pricing of products and services in response to market changes (Dynamic Pricing)
- Efficient inventory management to optimize logistics processes in real time (Warehouse Optimization)
The global AI market is estimated to reach $99.94 billion by 2023. With the help of its seed financing, paretos is able to position itself as one of the first German companies to establish itself in this rapidly growing industry environment. Analysts also forecast an increasing openness across all industries to use AI systems and machine learning algorithms as a relevant tool for business development. “Decision augmentation”, where humans and machines work together using their respective strengths to achieve a common goal, is the most crucial and relevant development in this digital age. In order to position oneself for the future, it is essential for intelligent technologies to make a decisive contribution for the optimization of innovation processes and, ultimately, to corporate success.
paretos was founded in mid-2020 by Fabian Rang (machine learning & AI expert) and Thorsten Heilig (digital entrepreneur, former COO moovel/REACH NOW). Their mission: data science to go. Using the latest machine learning methods, the Heidelberg-based start-up supports companies to exploit business and marketing potential in the best possible way without having to rely on data science expertize.
Since its launch in early 2021, successful medium-sized companies and multinational stock-listed corporations, such as Accenture, have begun relying on the paretos platform. The goal of the founding team is to become the number one in Prediction & Optimization as a service for global corporations, innovative SMEs and fast growing start-ups.
About LEA Partners
LEA Partners is an entrepreneurial-minded multi-stage private equity firm investing in growth technology companies that are driving transformative change in their industries. Founded in 2002, LEA Partners has advised on the investment in more than 40 companies. Operating out of Karlsruhe, one of Europe’s largest technology clusters, its mission is to fund and support ambitious founders and executives by leveraging them with practical, hands-on growth expertise to achieve market leadership.