German AI startup Aleph Alpha — which sells access to its large language models to enterprises and governments and is posited as the German answer to OpenAI — raked in €945k in revenue for the full calendar year of 2023. That’s double 2022’s revenues, which amounted to €426.5k.
Despite this, the revenue results were below the company’s target of €5.5m for 2023, according to financial statements obtained by German media.
The annual report also showed expenses for services rose from €4.2m in 2022 to €6m in 2023, while personnel costs increased from €2.8m to €11.2m in the same period. Losses more than doubled between 2022 to 2023, jumping from €8.3m to €18.9m. The company confirmed the figures to Sifted.
Aleph Alpha raised €460m in November 2023 in a round led by a group of seven investors including Innovation Park Artificial Intelligence (Ipai) based in Heilbronn, Bosch Ventures and SAP.
Sifted reported at the time that only €110m of the round was equity, with the rest coming in the form of a grant from the Dieter Schwarz Foundation, which the company has since confirmed.
Commenting on 2023’s losses, Aleph Alpha says it is quite normal for a company that must invest in building up its technology and team.
Impending product launch
After it was founded in 2019, Aleph Alpha quickly became the poster child for generative AI in Germany — positioning itself as a safe, transparent and trustworthy alternative to Big Tech models. Recent reports from various German media outlets, however, reveal Aleph Alpha’s customers are unsatisfied with the quality of its language model Luminous.
Aleph Alpha told Sifted that it will announce the general availability of its new generation model, as well as further enhancements to its product suite, this summer, which will support the further acceleration of its business.
It added that the new version of its model is already available as a “beta version” with selected customers, which is a standard practice to test and improve the quality before official release and that the company has already profited commercially from this in 2024.
The financial outlook for 2024 is looking more positive as Aleph Alpha has created long-term partnerships with enterprises that bring in license revenues, which is helping the company to start creating annual recurring revenue (ARR), the company says.
For example, Aleph Alpha announced a joint venture with auditing and consulting firm PwC’s German arm in June. The new entity, creance.ai, aims to support companies dealing with complex regulatory issues and provides a new route to market for GenAI companies.
Read the orginal article: https://sifted.eu/articles/aleph-alpha-restults-germany-finance-news/
