RALEIGHDiveplane, co-founded by former Epic Games CEO Michael Capps, has hit an inflection point.

In just the last year, the Raleigh-based startup, founded in 2018, landed partnerships with healthcare giants like Duke Health, and the UK’s NHS Foundation Trust and BREATHE, a health data research hub.

It also closed on $3 million in new funding, bringing its total raised to around $10 million to date. It’s even attracted star-studded investors, including US women’s soccer stars Megan Rapinoe and Mia Hamm.

Artificial intelligence startup in Raleigh has the smarts to be a billion dollar company

WRAL TechWire’s Chantal Allam recently had the chance to get an update. Here’s what he had to say:

TechWire: You were the president of Epic Games, based in Cary, North Carolina from 2002-2012. Then in 2018, you co-founded Diveplane with Dr. Chris Hazard. Tell me about it.

Michael: The next problem I thought I could maybe do something about was AI — super intelligence blackbox AI, and how people are misusing AI to solve problems because they don’t really understand what’s going on inside. I just didn’t know how to get started. Then it turned out that my great friend Dr. Chris Hazard had been working on classified technology in the machine learning space for years, I just didn’t know. When he finally told me, I was like, “You have explainable machine learning. We’ve got to take this and put it in front of everyone.” And that’s sort of the story.

TechWire: Diveplane has raised around $10 million so far. You have some celebrity investors, like American professional soccer player Megan Rapinoe and basketball player Sue Bird. How’s that?

Michael: I was on an early advisory board at Carbon 3D, one of the first unicorns from around here that’s based in Chapel Hill. It’s me, Steve Nelson (Carbon’s cofounder) and Mia Hamm (retired professional soccer player). Mia was there for her shoe knowledge, and I was there for my knowledge of technology licensing. A lot of the women’s team invested in Carbon and did quite well. And he’s like, “Here’s the next great thing in Raleigh.” So they ended up investing in Diveplane as well. We’ve got a few other soccer players in there. Becky Sauerbrunn, the amazing defender. So yeah, it’s kind of cool.

TechWire: Do you think Diveplane is on track to hit Pendo status, which achieved $1-billon value in 2020? Could Diveplane become the next Pendo?

Michael: We’re similar in some ways. We’re all SaaS (software as a service) revenue, so it gives us the ability to scale very quickly. We’re sort of just at this point where you can’t tell if it’s linear growth or exponential. It’s slow to get enterprises to trust you with the jewels. It’s like hiring a locksmith. We’re trying to help them bring privacy and safety to their data. I do see a similar scaling where there’s a network effect of trust in our space. If the National Security Agency is using it, and Duke is using it, it’s a lot easier to convince MasterCard to use it. Once we convince them, or whoever, it all falls. So, yeah, I’d like to think that we’ve got some significant growth potential.

TechWire: What’s your rate of growth?

Michael: We expect 3X in the next couple of months.  We had a long path of building software. But now that we’ve started commercializing Gemini, that’s a very fast time to value product. We’re seeing much better uptake. We’re at that wonderful phase where companies are now calling us. They’ve heard about us. They want to use it and they’re willing to pay us to test it, which is a great step in a company’s lifecycle.

TechWire: What’s Diveplane’s mission?

Michael: Big picture, we want to keep human decision-making in automated systems. We call it, keeping the humanity in AI.

The problem is you don’t know what you’re building with most machine learning systems. You don’t want necessarily to just take the data, shove it in and automate.

We should build machine learning just like software. The first system we built was this big machine-learning, explainable platform. Then on top of that, we’ve built anomaly detection engines for finding interesting things and data. Then we built Gemini, which is our fastest-growing product. It’s a data synthesis and privacy tool. While those things sound very different — privacy, finding anomalies and explainability — they’re all built upon this explainable core. We can say, ‘We’ve created a private set of records for you that are fully synthetic. You can look at it and see how the true process works. That’s part of what trust is — being able to ask it questions and have it be understandable by human people.

Diveplane CEO Michael Capps with his kids

TechWire: Your platforms deals with “synthetic data.” What is synthetic data, and how is it able to protect people’s privacy?

Michael: We build a synthetic dataset twin. Start with, say medical records, and create a new fake set of medical records. The knowledge is the same, but the data is not. There are no personal identifiers – nobody’s name or age. But they’re averaged into this new data set, and you don’t have any leakage of private data between the two. That’s what we’re amazing at. We help share data internally in a company, or across country barriers, or to other companies. We can take that set, analyze it, and hand over that research to the government or pharmaceutical companies trying to do research.

TechWire: How do you see Duke Health benefiting from your platform?

Michael: Being able to provide information about their operations without sharing private data is going to allow them to improve healthcare, research, financial outcomes, all of that. It’s also going to enable them to be revenue generating. They can sell their patient data in a way that doesn’t have any personal identifiers, so they’re comfortable in making that decision That’s huge. Imagine the health data that they have. If they put it in the hands of pharma companies who are working to develop new drugs, it makes them better. Duke has more revenue that they can use to put into the healthcare. So I’m excited about it. I think it’ll change a lot of. It’ll simplify things for them. It’ll allow movement of data where it wasn’t moving before, and it will create a revenue opportunity

TechWire: We hear about data leaks all the time these days. How crucial is it to have the technology that Diveplane has developed?

Michael: It’s wildly important. There’s this striation in the market where there are the folks that just don’t do anything. Then there are the ones that do masking, which is basically crossing out a person’s name and email address of the person. It’s not that hard to figure it out. Level three is true privacy, like we do, and it doesn’t matter who it is, I think you’re going to find you’ve got to have it.

If it’s Harris Teeter that gets hacked, it knows where you were, when and what you’d like to buy. That sort of data can be used against you in cyber scams, you name it. We’re really seeing a shift in the market. Some companies and people are willing to invest in cybersecurity in practice.

TechWire: How has it been rolling out Gemini, especially during a pandemic?

Michael: It’s never what I would have predicted, which either means I’m not very smart, or it’s impossible to predict. I’m not sure. Enterprise sales are so slow and painful.

We are working with organizations for whom trust is not simply regulated. They are really worried about trust. Remember, we’re a forefront tech. We’re for the folks who aren’t just trying to check a box. We’re for the ones who are trying to be ahead of the curve and do something better, so they are the most secure, safe and private organizations in the world. Government, intelligence community, healthcare, finance leaders, they are not fast to trust.

From another perspective, it’s grown internationally much faster than I would have thought. We’re actively working with folks in Singapore, Australia, Spain, England, US, and others. I wasn’t expecting that as a little startup that we would maybe have more sales in Europe than in the US in our first year, like how cool is that?

TechWire: You closed on $3 million in new funding in capital in January. How do you plan to use those funds?

Michael: It’s 85 percent people at this point, for sure, and some compute costs, because we do a fair amount of experimentation. A little bit of marketing and a whole lot of sales- lead generation. We have external teams, especially overseas, that are working to generate leads and bring market-qualified leads into our sales team here, places like India where we just don’t have easy entry.

I also expect to raise more hopefully by the end of the year. We’ll probably launch our fundraising in a few months. If I don’t do it in October, that means it’s February.

TechWire: How many employees do you have, and are you hiring?

Michael: Yes, absolutely. We’re at 24 right now, and then a whole lot of external salespeople.

We’re always hiring machine learning engineers and senior data scientists. We’ve got a couple positions open right now, and I’m waiting for the fundraise to make a big, big difference.

TechWire: So why pick Raleigh for Diveplane’s headquarters?

Michael: Here’s a back-handed compliment to Raleigh. As a startup, there’s not a lot of startups that are well-funded with a strong plan and technology. There’s a lot of garage startups, and there’s all the Cisco, SAS, IBM jobs you could ever want. But there’s not a lot of jobs in our space, so it’s made it a great hiring spot for us. I can offer startup equity, plus health benefits and more. We’ve been able to recruit very successfully from the big companies in town. I’d much rather be here than say Silicon Valley where every startup has $10 million, and no idea what they’re going to do with it. It’s put us in rarified air here in Raleigh.

I’m was also born in Raleigh. I’ve lived all over the world, but now I’m stuck. The gravity here is stronger than everyplace else.

TechWire: Do you see Raleigh emerging as a tech hub, maybe even one of AI?

Michael: Apple adding 1000 people for an AI center here doesn’t hurt. That’s definitely step in the right direction. It’s tough. There’s a lot of competition for that. As helpful as Raleigh has been, it’s tough to compete with the subsidies that you see in other states and cities. It’s tough to compete with Montreal that is giving 30% subsidies against employee wages.

But all that said, we have all the makings of it, amazing universities with huge computer science programs. It’s not too expensive; you’ve got all the major companies playing here now. We’ve got the Googles and Amazons and Apples, all in North Carolina. I feel good about it. I would like it to happen after we’re successful, so that I don’t have to fight everybody for my people.

TechWire: Where do you see Diveplane in five years?

Michael: Next year, we’ll be seeing a lot more research and development under the hood, and us really building up Geminai. You’ll also see some big announcements from us in data and trust. I can’t speak to it yet, but we’re partnered with some cool organizations. We’re lucky to sort of punch above our weight class in the industry, so I’ll just leave it at that.

Then the five-year plan, we’ll be much more public about our technology. I want to be able to give more of that away. I hope that we can open source what we used to make money from, all while building the next product. The goal here is to make enough money to support the business growth. That’s secondary to what we really want to do, which is to make an impact. Some of our tools, if they were free and we can afford unlimited compute, I would love to give them all away. I can’t afford to do either of them; but as soon as I can, I will. That’s the goal.