Breakthrough Aussie AI software firm banks $35m

Clear Dynamics
MAY 17 2022
Published in the Australian Financial Review

Clear Dynamics, a fast-growing Australian software firm that lets organisations use automation to build modular tech systems, that can be put together and reused like Lego bricks has closed a $35 million funding round, which it says will enable it to accelerate international expansion efforts.

The company says it has increased its customer base four-fold across Australia and the United States in the last year, as more enterprises adopt a trend towards “composable” systems, and view its software as a way to use automation to avoid the crippling cost of in-demand software developers.

Its Series B funding round was led by existing investors Colinton Capital Partners and OIF Ventures, who were joined by new investment from family offices and private investors, including all the company’s management team.

Clear Dynamics calls its product an artificial intelligence-enabled enterprise operating system – or aieos – it says uses AI to automate the software development process, allowing organisations to compose software solutions quickly, piece them together and reuse them in other areas.

CEO and founder Dan Beaty said its software learns how to develop data into software applications, but doesn’t replace human developers entirely. He makes an analogy of an investor applying machine learning to the financial markets by plugging in details important to them to an algorithmic system, and watching the software analyse developments repeatedly at scale.

“In our world our team is mainly comprised of solution architects and solution designers, so they are creative and engage with the customer to understand how our solution would best help solve the use cases that our customers are experiencing,” Mr Beaty said.

“Then the aieos platform itself, takes those instructions and then expands that into a full application suite.”

Mr Beaty said aieos is currently being used across 10 industries including financial services, energy, government, and healthcare, by customers including Bank of Queensland, Cargill, Latitude Financial Services, Australian Unity and Radian Energy in Australia, and Scoot Education in the US.

A growing trend

Business technology analyst firm Gartner suggests Clear Dynamics is tackling an increasingly important problem to the senior technology executives who buy technology products in businesses and government departments.

While just seven per cent of respondents in the 2022 Gartner CIO and Technology Executive Survey indicated that they have already invested in composable enterprise solutions, another 60 per cent said they expect to have done so by the end of three years.

In a report it said enterprises are starting to adopt composable business in both their operations and technology systems, meaning technology providers have additional opportunities at current customers and also in new market segments.

“Composability is a design approach that enables organisations to quickly assemble digital assets and build new capabilities. The goal is to make the organisation adaptable and resilient in the face of uncertainty,” Gartner research vice president Marcus Blosch said.

“Basic elements are partitioned into a system of building blocks that can easily be configured into a solution. Composability is not limited to IT systems. It has wide applicability in business as well. In fact, almost anything that must be designed and delivered can be composable.”

Clear Dynamics executive chairman Ian Basser said the company had been cashflow positive for the first five years of its existence, before sacrificing that profitability to invest in growth and product development in recent times. However, he said the company could easily rein things in and return to profitability if market conditions dictated it.

He said this growth had included going from having about 35 staff to over 180 in the past 18 months, in order to match the growing customer demand. Its early international growth has included two US and two UK clients, with the new funds being put towards trying to accelerate its progress.

“It’s a decision we have taken at the moment to invest in expansion, but we’ve got at least two years plus of runway to actually try and take ourselves to the next level,” Mr Basser said.