Autodesk Invests In Machine Learning Construction Video Firm Smartvid.Io

Summary

• Autodesk has participated in a $7 million financing round for construction video firm Smartvid.io.
• Smartvid.io has developed intelligent video and photo tagging software with numerous applications for construction site and industrial markets.
• The deal is a smart move by Autodesk, and is indicative of a more active approach to investing in and partnering with new technology companies.

Quick Take

CAD software developer Autodesk (NASDAQ:ADSK) has invested in a $7 million funding round for intelligent video company Smartvid.io.

Smartvid.io has applied machine learning technologies to enable construction companies to tag and monitor construction site activity automatically for security, safety, and progress completion milestones.

Autodesk’s investment is part of a recent increased trend for its activity with promising new technologies and startup companies that can affect its business operations.

Investee Company

Cambridge, Massachusetts-based Smartvid.io was founded to save construction process and risk managers time by automatically classifying construction and industrial activity from video and still photos. The system also helps organize content to help companies retain field documentation and glean insights from activities.

Management is headed by Josh Kanner, who founded the firm in 2015 and previously founded Vela Systems, a construction project software firm that he sold to Autodesk in 2012. Autodesk also invested in Vela Systems before it acquired the firm.

Below is a brief video on Smartvid.io’s system:

(Source: Smartvid.io, Inc.)

According to a report, Smartvid.io currently has approximately 10 customers, but two of those customers, Suffolk Construction and Skanska, are large construction companies.

Notably, in February 2017, Autodesk and Smartvid.io partnered to integrate Smartvid.io’s machine learning and tagging system with Autodesk’s BIM 360 Field safety software to make videos and images searchable for safety and risk management purposes.

Investment Terms and Rationale

In addition to Autodesk, investors in the current deal included Converge, Stage 1 Ventures, Launchpad Venture Group, Borealis Ventures, and Castor Ventures.

Post-money valuation was not disclosed, although given Smartvid.io’s early stage of development, it is likely under $40 million.

The support of Autodesk is an important development for Smartvid.io’s potential in the marketplace since Autodesk is a well-known and highly regarded name in project design software.

Smartvid.io CEO Kanner’s previous relationship with Autodesk by his experience in the construction software business was also a help, as he is a ‘known quantity’ to Autodesk.

So how does Autodesk stand to gain from such an investment? Corporate investors are increasingly active in startup investing to gain insight into new applications of technology, new business models, and potentially disruptive impacts on their business.

Autodesk also appears to increasing its investment activity in 2017, with four investments to-date, as the Excel spreadsheet shows below,

Autodesk_Investments.xlsx

(Source: VentureDeal)

It isn’t surprising that Autodesk continues to embrace new technologies that promise to affect the various business sectors it operates in; rather it is to management’s credit that it is working to facilitate deal flow in order to stay abreast of new opportunities.

Additionally, corporates such as Autodesk also receive ‘optionality’ in the form of potential strategic partnership opportunities and right of first refusal to acquire a promising startup if it is successful.

Attracting new technologies, engineering and business talent to corporate operations is a necessary part of remaining relevant to never-ending customer demands for increased value from the software and services they purchase.

In my view, Autodesk management is on the right track with its stepped-up technology investment and partnership activities.

I write about M&A deals, public company investments in technology startups, and IPOs. Click the Follow button next to my name at the top or bottom of this article if you want to receive future articles automatically.

Supporting Documents

1. Autodesk_Investments.xlsx
2. Autodesk_Investments.xlsx

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.