James F. Kenefick — Azafran Capital INSIGHTS

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INSIGHTS issue TWO The Deep Dive on Deep Tech When technologists and scientists work together on a corporate goal, the result is deep tech.” BBVA Compass Report

issue two FOCUS Azafran Capital focuses its efforts and investments at the intersection of Deep Tech and End to End Technologies - it is at this juncture we focus Issue Two of INSIGHTS.

Technology has become ubiquitous, it is everywhere – almost every startup now coins itself as a tech startup. But in truth, a company selling a traditional product or service and applying existing technology (Uber) is not the same as one creating actual technology and scientific advancement with corporate implications. It is for this reason and distinction that the term “deep tech” was first coined by Swati Chartuvedi, CEO of Propel(x), in 2014 Ms. Chartuvedi pivoted about that time to projects she called deep tech as they met her evolving focus for greater social impact. Her actual definition is “companies founded on a scientific discovery or meaningful engineering innovation,” with the added dimension of helping the world in a positive way. “Deep tech companies promise solutions in a wide range of fields, using techniques such as big data, artificial intelligence or deep learning, with a more scientific approach than is typically seen in the tech companies covered by the media. They aren’t the digital companies that have grown the most in recent years (such as Facebook or Spotify), and they aren’t based on innovative business models (like Airbnb). Instead, they solve problems through meaningful scientific or technological developments.” (source: BBVA report “What is Deep Tech?”) We see additional framing and clarification in the deep tech realm starting with deep learning as an approach to machine learning and machine learning as one of the ways of AI. In addition to our goal of changing the world, the Azafran Capital team sees deep tech companies as an attractive investment opportunity. One highlight is detailed below in a feature on our investment in deep tech acoustics filtering pioneer, Yobe. Other examples of deep tech companies include Sophia Genetics with data-driven health diagnostics, DeepMind (now owned by Google), and MessageBird with an AI-driven communications platform for global companies.

Deep Tech is a scientific solution - not a platform, not an end product that consumers recognize. This is the realm of scientists and technologists, where a solution to and problem is delivered. Then, science and platform can come together with the platform as the end to end solution. For example, a healthcare device that can instruct a caregiver as to how to apply the device to help diagnose patient remotely - that’s a platform - hardware + gateway + a cloud based system, which acquires and stores the data, applying AI and Machine Learning to interpret and then deliver the prognosis for the patient.

Portfolio Focus: Yobe Deep Tech + Acoustics Filtering “The ability to consistently and reliably separate important signals from noise is not just a groundbreaking development in and of itself, but will lead to the creation of voice user interfaces that power the technology of the future.” - S. Hamid Nawab, Yobe Chief Scientist By bringing Artificial Intelligence into the world of signal processing, you are essentially introducing intelligent behavior much earlier in process. While processing signals (from a smartphone microphone, for

for example,) acquired in “noisy scenarios” of everyday life, this type of advancement in technology enables platforms to accurately separate voices of interest from background and near-field noise,

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In essence, harnessing the “DNA” of individual voices. Yobe’s solution accomplishes this primarily through the use of an Abductive Reasoning Module (artificial intelligence) that controls a battery of advanced signal processing algorithms and then uses broadcast studio methodologies for aggressive signal repair. “Our investment in Yobe reflects the Azafran vision perfectly,” notes ACP

Managing Partner, James Kenefick. “Falling square into our Acoustics Filtering investment segment [see feature on following page], Yobe can pinpoint a voice based on biometric markers, aggressively enhance the volume and then use AI to smooth it out. Yobe has all the ingredients for success, great leadership, plus great tech and vision,” adds Kenefick. Volume 1 Issue 2 - Page One

All the Way - End to End Tech End-to-end is a term used to describe products or solutions that cover every stage in a particular process, often without any need for anything to be supplied by a third party. It also embraces a philosophy that eliminates as many middle layers or steps as possible to optimize performance and efficiency in any process.

market PREDICTIONS More on 2019 and beyond from the experts: 8 Billion Digital Voice Assistants Projected By 2023

An end-to-end solution (E2ES) is a term that means that the provider of an application program, software and system will supply all the software as well as hardware requirements of the customer such that no other vendor is involved to meet the needs. E2ES includes installation, integration, and setup.

The number of digital voice assistants in use will grow to 8 billion by 2023, according to a new forecast by Juniper Research.

End-to-end solutions provide implementation while being attentive to smart and efficient ways of setting up a business. The systems are set up ensuring minimum costs, incorporating the best material and producing the best infrastructure according to the demand of business. End-to-end solution greatly reduces hassle, costs, resources and time. Project managers often prefer to use end-to-end solution services to keep pace with ever-changing infrastructure and business needs. A project is handled by only one vendor, working from beginning to completion, without the direct involvement of any other third party.

This would be an increase from an estimated 2.5 billion at the end of last year as smartphone assistants remain the largest platform by volume, due to Google Assistant and Apple Siri.

In the technology industry, end-to-end is often associated with suppliers of systems that take care of all the hardware requirements as well as the software, including installation, implementation and maintenance – which eliminates the need for third-party suppliers. An end-to-end technology solution might refer to a solution that covers everything from the client interface to data storage.

The fastest growing voice assistant categories over the next five years are projected to be smart TVs (121%), smart speakers (41%) and wearables (40%). Source: MediaPost, Chuck Martin

For example, a company offering end to end video conferencing products will provide everything including the screens and network connections, etc. In e-commerce, end-to-end processing occurs when one company provides a service to another in which it manages the sales, order tracking and delivery of a product.

On Startups vs. Larger Players: “I think a lot of larger organizations are balancing the risk by looking at what startups are doing, and instead of doing the risks themselves, they buy the technology or acquire companies. In some ways that’s a good approach, because you can evaluate the tech without developing it, and spend your resources on managing the risk,” - Charlotte Tschider, DePaul University


Azafran Perspective Question for Stephen Candelmo, Azafran Partner - What gets you up in the morning and what aspects are you most passionate about Azafran Capital’s Work?

AI impact on credit cards and banking: According to a recent study, 33 percent of customers who abandoned a business relationship did so due to lack of personalization. But artificial intelligence in banking is changing that. Deployed by major banks including HSBC and Bank of America, AI and predictive analytics make it easier for banks and loyalty program issuers to determine what rewards consumers will want at any given time and offer those rewards, along with incentives to use their card for future, similar rewards. Source: Google Alert Ai Assistant - Bankrate, Dawn Allcot

“We are now at the rapid acceleration of technology our world has experienced and a key part of that is the advancement of our connectedness. Advances in AI will transform, how we live, look, work, and communicate. At this incredible influx, to be part of that innovation, investment, supporting it, advancing it. Being part of these young companies, to play a part in their efforts to put a dent in the universe, is just an incredible opportunity. In ten years the world is going to be a very very different place - since 2008 and the winter of tech there have been such incredible advancements, social connections, moves in markets, instant news, and meaning. But there are many drawbacks, we have become more isolated and lonely at the same time. All the data that is now being collected and produced, is just staggering. We now for the first time have the basis to apply AI and machine learning, which will change everything, how we interact with doctors, who we are talking with on customer calls, how much they know about us. Voice will be THE interface though, and this is where we are focused, where we see the biggest impact opportunity.”

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Investment Segment Highlight: Acoustics Filtering Introduction below from Ushering in the Era of Speech to Meaning, Published on Medium, September 2018: “Spoken language is an extraordinary thing. Over millions of years, we have evolved the ability to formulate complex feelings and thoughts, and communicate them in all their rich nuance by simply talking to the people around us. Considering the wonderful lexical complexity of the language we use in our daily relationships makes it easy to forget a simple fact: fundamentally, we are emotional beings, and we express ourselves as such. We sigh, we grunt, we scream, we laugh. From the songs we sing to the arguments we have, from the complaint call we make to a business hotline to the one we give our relatives to announce the arrival of a newborn baby: our spoken interactions are literally loaded with emotions.” It is in this context that we see the true potential to be unlocked in what has simply been categorized as “voice.” The question now is, what is voice? Through Acoustic Filtering, scientists and technologists are measuring (through AI and machine learning) voice biometrics, pitch, temperament, and listening to the sounds of breathing - the natural state of speech. It’s about the breath as well, analyzing breath - there is a whole spectrum of voice related channels that encompass acoustics. A helpful reference we use at Azafran Capital is to imagine voice as a pyramid, with the literal word or transcription as the gateway and the base of pyramid. Second is general understanding and interpretation and the third layer is specific, contextual understanding and then the top of the pyramid is the fourth layer, unique understanding (i.e. diagnosis of ailment, depression for instance.) The chart below shows this kind of progression, developed by the DeepMind / Google lab:

IN THE KNOW Gartner: Enterprise use of AI Exploding Companies are adopting artificial intelligence (AI) like it’s going out of style, according to a new report by Gartner. The Stamford firm’s 2019 CIO Survey of more than 3,000 executives in 89 countries found that AI implementation grew a whopping 270 percent in the past four years, and 37 percent in the past year alone.

Source: DeepMind @ https://deepmind.com/

Hence our reference to acoustics and acoustics filtering as the forward interpretation, which encapsulates voice and all the nuances, emotions and the understanding highlighted in the pyramid analogy above. We have designated acoustics filtering as an investment category (see Yobe overview on first page) and expect this to be one of the most promising deep tech opportunities in the market for some time.

That’s up from 10 percent in 2015, which isn’t too surprising considering that by some estimates, the enterprise AI market will be worth $6.14 billion by 2022. According to the McKinsey Global Institute, labor market shifts will result in a 1.2 percent increase in gross domestic product growth (GDP) for the next ten years and help capture an additional 20 to 25 percent in net economic benefits — $13 trillion globally — in the next 12 years. . Source: VentureBeat, Kyle Wiggers

Quote of the Month: “If we manage to get AI to work for people and the planet, then the effects could be transformational. Right now, there’s everything to play for.” - DeepMind co-founder Mustafa Suleyman

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Feedback, going forward Thank you for the work you are doing in the world and your continued support of Azafran INSIGHTS’ monthly journey into the intersection of voice tech and AI. Our intention is to use this as a vehicle to open a dialogue with each of you, together as a group, and we strongly encourage and welcome your feedback. We’ve made feedback/comments simple, you can quickly and securely leave us a voice message by clicking here. If you are reading in print, please just visit the contact section of our website at AzafranCapitalPartners.com. In either case, just click on the “Start Recording” button and leave your thoughts and suggestions. Or you can always send us an email to insights@azafranpartners.com - thank you. We will be publishing INSIGHTS each month going forward, exploring the opportunity and intersection of voice tech and AI. We look forward to building this sector together and all the benefits for humanity that are soon coming down the road. From the Azafran team, we wish you all the best and a successful 2019.

voice-techINDUSTRY At a Glance: Top 5 Markets & Global

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