Aleph Alpha to complete round of financing with SAP and Intel

Make two out of one – with SAP and Intel, two giant corporations are now said to have participated in the Heidelberg start-up’s latest round of financing.

Why only take one tech company as an investor when you can have both? This is a brief summary of what the latest rumors about the upcoming financing round of the Heidelberg AI startup Aleph Alpha suggest.

Internal sources initially told the Handelsblatt that the HR software company SAP was considering investing in the startup. When asked by Gründerszene, Jonas Andrulis, founder and inventor of the “Luminous” language model, did not want to comment. A little later it was said that the chip manufacturer Intel would instead express interest in a lead investment in Aleph Alpha. Insiders have now confirmed to the Handelsblatt that both mega-corporations are now entering Series B financing in parallel. According to the report, the US chip company Nvidia would also participate as a third new investor.

Overall, newcomers and existing German investors, including Earlybird and 468 Capital, are to invest a total of over 100 million euros in the AI ​​startup. The term sheet, which regulates important parts of the contract, is said to have been signed in mid-June. It also states that Intel will lead the financing round with around 25 million euros, followed by SAP, which will contribute around 10 million euros. So far, none of the companies involved have wanted to comment on this. Investor circles rated the round to the Handelsblatt as “an important signal for the German AI ecosystem”.

Startup increases valuation to 450 million

The cash injection would increase the valuation of Aleph Alpha, which has raised 28 million euros in venture capital so far, to around 450 million euros. Apart from the Cologne-based translation startup DeepL, which is said to be worth over a billion, no other AI startup from Germany has achieved a similarly high rating.

Aleph Alpha is considered an up-and-coming AI company whose voice assistant can write, understand and evaluate texts just as well as its competitor Chat GPT from Open AI. Nevertheless, their round of financing has dragged on, in contrast to the round of the French startup Mistral, which is developing a language model for the industry and was able to collect 105 million euros from well-known VCs a few weeks after it was founded. According to the report, the coordination with small investors and the extensive examination of the Intel team are said to have caused the delay.

In the future, founder and CEO Jonas Andrulis also wants to expand the industrial application area – for example to be able to solve complex tasks in factories – in order to remain competitive. In the spring, Aleph Alpha and the IT service provider Hewlett Packard Enterprise (HPE) presented a jointly developed virtual assistant for industrial production, which is intended to act like a highly specialized service technician.