Irish tech titan lines up stake in Slovak AI firm

Irish tech titan lines up stake in Slovak AI firm
Irish tech titan Pat Phelan
By Jason Corcoran in Dublin June 18, 2018

Irish tech titan Pat Phelan is lining up a punt in YouFirst, an innovative Slovak startup that utilises artificial intelligence (AI) to track facial expressions of television viewers.

Phelan, who sold his e-commerce ID and fraud protection start-up Trustev in a $44mn deal two years ago, is already advising YouFirst and said he is likely to take a stake.

YouFirst uses emotional AI software that not only tracks the facial expressions of viewers watching a video from the comfort of their homes but also their emotions.

“This technology is amazing and can look at 800 data points,” Phelan told bne IntelliNews in an interview at the recent  MoneyConf fintech summit in Dublin. “I am working with them, I have brought in some customers, I am in an advisory role and I will probably do an investment.”

Viewer responses are recorded through their webcams – with their consent – while they watch a video. The recorded responses are streamed to YouFirst’s cloud servers where they are securely processed. The results are aggregated and reported on the YouFirst dashboard in near real time.

The software tracks 68 key-points of the face, mainly around the eyes, nose, and mouth. For a more robust solution, the AI is also able to detect wrinkles and shades in the nasolabial, forehead, and other regions. Based on these input data, the software can detect the probability of each emotional facial expression, such as anger, disgust, fear, happiness, sadness, surprise or neutral on a scale from 0 to 1.

Founded in 2014 by a diverse team of IT, psychology and marketing specialists, YouFirst operates in Europe, Russia and Latin America from its Slovak base. Clients include drink giant Heineken, mobile network Orange, Czech TV and banks in Eastern Europe.

The company was co-founded by Lujza Bubanova, who used to run start-up weekends and hackathons in Slovakia.

On one such weekend, Bubanova met with three programmers who were working with a machine learning algorithm based on century-old research of human emotions.

“They were playing around with this algorithm and had no idea what to do with it,” said Bubanova. “So, I found an angel investor, a CEO, and that’s how we founded the company.”

The most popular application for the software is pre-testing for TV commercials while Phelan has trialled out the technology using a video to promote Sisu Aesthetic Clinic, a doctor-led chain of aesthetic beauty clinics.

“Lujza sent me the link to the 30-sec video and I shared it with 300 people who watched it,” said Phelan. “The results came back and they were horrific – people were puzzled, angry and people were happy when they were supposed to be sad. This was all instant, so it’s brought me to the point where I will probably do an investment."

Phelan, who was speaking at the recent MoneyConf conference where he met Bubanova a year ago, has form in picking start-up winners and was the one judge who backed Revolut in a start-up battle at WebSummit in Dublin three years ago. In April, it emerged challenger lender Revolut is heading towards a $1.4bn valuation following an investment from a firm founded by Russian venture capitalist Yuri Milner.

“I was the judge, and I remember having to fight to get them to win,” said Phelan. “I love their model but there are others coming through now like Curve, Starling Bank, Metro and M26 in Germany.

“If you look at their model, they are not really disintermediating banking – they are disintermediating pieces of banking. I still use Visa and Chase for my banking but I can have a Curve card, which can immediately do a conversion at a mid-market rate. So these are all pieces that are coming together.”

Phelan, who sits on the board of Transunion after it acquired Trustev, works with an array of Fintech players helping to provide them with a holistic approach to fraud and identity management.

Phelan and a partner recently closed Nohovation, a €25m investment fund to help Irish companies scale globally.

“We couldn’t find enough opportunities even though we looked at 114 start-ups,” he explained. “There is probably a dearth of Irish early-stage start-ups and that can happen when there is a booming economy when you have people who are very comfortable in jobs and there are not as many start-ups.”

Even though Dublin is awash with tech multinationals such as Facebook, Google, Amazon and Twitter, the city still only has a burgeoning startup scene.

However, Phelan doesn’t think the Irish government’s policy of relocating foreign start-ups from mainly Russia, Ukraine, Belarus and Central and Eastern Europe is working.

Enterprise Ireland, the government agency, has provided “waves” of Russian-speaking firms with support to secure funding, visas and accommodation as well as mentoring after they decide to move to the Irish capital.

“I don’t think it works long-term,” said Phelan. “I think I know a lot of them, and I would love to see their proven business model. If they are looking outside Ireland to bring start-ups in, there is obviously not enough start-ups in Ireland and I would try to figure out how to get scaling start-ups.

“If I bring a three-man team from Russia and I give them a €50,000 grant, in reality, it’s tourism for entrepreneurship. If you were looking at for a pure investment logic, stay in Russia and I will give you 50 grand and it will last longer and you will have a better opportunity of them scaling there. In Ireland, that 50 grand won’t go far.”

Rather than just “a scattergun approach,” Phelan believes the Irish government should focus on bringing Foreign Direct Investment (FDI) into the country and maintain Dublin’s status as the European HQ for US tech giants and a growing base for fintech disruptors.  

“Moving three people from Leningrad to Dublin is a dramatic life experience and it probably means if they were good enough they would have been funded there,” he said. “It’s more of an experience for these guys buts some may stay and end up getting jobs in the sector.”

 

 

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