Enterprise software producer ServiceNow agreed yesterday to acquire Element AI, a Canada-based artificial intelligence technology provider backed by corporates Tencent, Intel, Microsoft, McKinsey & Company, Hanwha and Nvidia.
The companies did not disclose the size of the deal but multiple sources told TechCrunch that ServiceNow is paying about $500m, a slight reduction on the $600m to $700m valuation at which Element reportedly last raised money.
Founded in 2016, Element has developed AI software products that make in-depth research and text processing more efficient. ServiceNow intends to use the technology to make its workflow software platform more intelligent.
Vijay Narayanan, chief AI officer for ServiceNow, said: “AI technology is evolving rapidly as companies race to digitally transform 20th century processes and business models. ServiceNow is leading this once-in-a-generation opportunity to make work, work better for people.
“With Element AI’s powerful capabilities and world class talent, ServiceNow will empower employees and customers to focus on areas where only humans excel – creative thinking, customer interactions and unpredictable work. That is a smarter way to workflow.”
Hanwha Asset Management, a subsidiary of diversified conglomerate Hanwha, joined consulting firm McKinsey in Element’s last round, a $151m series B in September 2019 that pushed its overall funding to $257m.
The round also featured Caisse de dépôt et placement du Québec, Gouvernement du Québec, BDC Capital, Real Ventures and DCVC, the venture capital firm otherwise known as Data Collective which had led the company’s $102m series A round in 2017.
Internet group Tencent and financial services firm National Bank of Canada both backed the 2017 round, as did Hanwha Investment, M12 (then Microsoft Ventures), Intel Capital, Nvidia GPU Ventures, on behalf of Hanwha, software provider Microsoft and chipmakers Intel and Nvidia.
BDC Capital parent Business Development Bank of Canada, Real Ventures and Fidelity Investments Canada, a subsidiary of investment and financial services group Fidelity, filled out the round along with unnamed sovereign wealth funds.
