Neuron Soundware, a progressive Czech start-up, has raised an additional 5.75 million Euros when Lead Ventures and Inven Capital decided to expand into industry 4.0 by investing in the company. Neuron Soundware is a leader in acoustic diagnostics of machines and plans to use the capital to expand its business activities further. Exapro has partnered with Neuron Soundware earlier this year.
MOL Group and ČEZ Group now minor stakeholders
MOL Group and ČEZ Group acquired a minority stake in Neuron Soundware through Hungarian Eximbank and investment funds. The move strengthens the positions of both Lead Ventures and Inven Capital in the start-up environment in the CEE region.
Budapest based venture capital firm Lead Ventures, together with Inven Capital, a ČEZ Group investment fund backed by Hungarian Eximbank and MOL Group, have acquired a minority stake in Neuron Soundware. J&T Ventures, a former investor, also joined the current investment.
Disrupting the preventive maintenance market
The Czech based Neuron Soundware is a market leader in industrial machine diagnostics using acoustic analysis. The company specializes in developing and marketing advanced software and hardware used for predictive maintenance. Their solutions enable optimization of operations through timely detection of failures.
The transaction has resulted in Neuron Soundware raising €5.75 million to expand its business activities further.
Pavel Konečný, the company’s CEO, said in an interview with PetaCrunch that a portion of the new funding would be used to complete a number of building blocks of their monitoring solution. These blocks could be up and running in a few weeks and will be financed via a solution as a service business model, i.e. a monthly fee will be charged per machine.
Scaling the smart monitoring of machines
The company will then focus on scalability. The goal here is to monitor large numbers of machines such as robots, turbines, pumps, compressors, engines, etc. The final aim is to expand internationally. Apart from using direct sales, the company will continue to build its partnership network, not only in Europe but also in Asia and the Middle East.
IA diagnostic technologies help early detections of machinery’s multifunction
Founded in Prague in February 2016, Neuron Soundware employs twenty experts and generated close to €500 000 in revenues last year. Its smart diagnostic solutions are based on acoustically analyzing machines and is used in various industries, including the energy sector. The solution uses artificial intelligence to identify imminent mechanical problems in machines. This allows customers to prevent breakdowns in critical manufacturing equipment.
Several large global corporations use systems supplied by Neuron Soundware in their operations. These include LG, Airbus, E.ON, Innogy, BMW and Daimler. Neuron Soundware also has a large footprint in the energy sector, with fleets of more than 20 huge combined power and heat units for various customers in the Czech Republic.
The CEO of Lead Ventures, Abel Galacz, says they are passionate about the Neuron Soundware story and its team. Although predictive maintenance has been an essential requirement for complex industrial systems for many years, practical solutions are difficult to come by. The technology developed by Neuron is a game-changer in this environment and its impact on industry efficiency across numerous verticals is substantial.
The managing director of Inven Capital, Petr Míkovec, believes Neuron is one of only a few companies using acoustic emission analysis that can compete with leading US and Israeli companies. During the short time it has been operating, it has built a massive database of unique sounds which is used to train its proprietary neural networks.
Finding inspiration in the street
Pavel Konečný’s journey into using sound and AI to detect mechanical failures of machines started when a friend of his experienced a critical car failure. He could hear strange noises coming from the engine, but when he took the car to a repair shop, mechanics couldn’t find anything wrong and send him back on the road. A few hours later, the car had a major engine problem on a highway and stopped. The story inspired Pavel to start thinking about how to use the noise to determine what the problem was.
Pavel explains that they know how compressors, electromotors, cylinders, gearboxes and pumps should sound. Although these sounds are stored in a database, this is in itself not enough. Neuron’s AI software can distinguish irregular noises from normal process hum and surrounding sounds, enabling customers to be sure that a machine will not break down unexpectedly.
A successful collaboration between investors
Inven Capital has been in business for more than four years and specializes in investing in start-ups in the smart energy sector. The company has built a reputation of being a capable and qualified investor that supports the start-up companies it invests in. The EIB (European Investment Bank) decided to form a joint investment structure with Inven Capital based on the company’s successful due diligence, the fund’s performance, the portfolio of its customers and its strong management team. EIB has undertaken to entrust €50 million in Inven Capital’s management.
A venture capital firm based in Budapest, Lead Ventures, uses its Enter Tomorrow Europe fund to invest. The fund is backed by the Hungarian Eximbank and the MOL Group. Lead Ventures has €100 million under its management and actively looks for investment opportunities in the CEE region. They focus on companies that have unique stories, coupled with global reach and outstanding growth potential.
Neuron Soundware’s current focus is on scaling successful use cases by deploying pre-trained AI algorithms to monitor huge numbers of quantities of machines like robots, pumps, engines, turbines, compressors, etc. The strategy is underpinned by provisioning of monitoring solutions that can be deployed in a few weeks and is financed via solution as a service, i.e. a monthly fee charged per machine.
A bright and global future awaiting Neuron Soundware
Neuron Soundware is currently hiring for a number of new positions for its main office in Prague to maintain international expansion. It will also build sales and support business units in Germany to improve service to local major clients, including Siemens, BMW and Airbus.
Neuron Soundware will also focus on expanding its partnership network, not only in Europe but also in Asia and the Middle East. Neuron Soundware has recently created a new business entity, NeuronSW SE, mainly due to Brexit. NeuronSW has headquarters in Prague and will eventually take over all business activities and liabilities of Neuron SW Ltd., headquartered in London.