McKinsey acquiring Israeli AI platform Iguazio for $50 million
The global management consulting firm is making its first acquisition of an Israeli company with the aim of accelerating and scaling enterprise AI
Global management consulting firm McKinsey & Company announced on Monday that it has acquired Iguazio, a Tel-Aviv-based startup in Artificial Intelligence and Machine Learning. The companies did not reveal the cost of the acquisition, but it is estimated to be around $50 million, well below the $100 million Iguazio has raised to date.
McKinsey, which is acquiring an Israeli company for the first time, will build an AI R&D center around Iguazio, adding its entire team of 70 data and AI experts to its staff.
Iguazio has raised around $100 million to date, including from Israeli investors Pitango, JVP, and Magma VC, as well as many international corporations like Verizon Ventures, CME Group, Bosch, Samsung and Dell.
Iguazio was founded in 2014 by veteran entrepreneurs Asaf Somekh, Yaron Haviv, Yaron Segev, and Orit Nissan-Messing, who previously served in senior roles at XtremIO (acquired by EMC), XIV (acquired by IBM), Mellanox (acquired by Nvidia) and Radvision (acquired by Avaya). All four will join McKinsey.
Iguazio will serve as the foundation for a new location for QuantumBlack, McKinsey’s AI arm which it plans to grow and expand in the coming years. The Iguazio MLOps platform enables enterprises to develop, deploy and manage AI applications in an efficient, scalable and repeatable way.
McKinsey said that with Iguazio, QuantumBlack will now 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.
“After analyzing more than 1,000 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,” said Ben Ellencweig, McKinsey senior partner and QuantumBlack global leader of alliances and acquisitions. “By joining forces with Iguazio, we can now deepen the unparalleled, disruptive, end-to-end AI capabilities we offer to our clients.”
“We are committed to unlocking the full potential of AI to help clients drive sustainable, inclusive growth. Today, as 90 percent of AI projects remain in the lab, there is a big opportunity," said Alexander Sukharevsky, senior partner and global co-leader of QuantumBlack. “By combining Iguazio and QuantumBlack, we have now deepened the end-to-end offering that will allow us to embed AI in every important step of decision making in real time.”
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“We have always acted very responsibly, never went crazy with funding rounds and never reached a situation in which we had to lay off employees,” Asaf Somekh, co-founder and CEO of Iguazio, told Calcalist. “As part of the acquisition all the employees will retain their jobs. No one will be laid off and everyone will benefit as the employees will also receive compensation as part of the deal.”
