In this edition of Localogy’s Local Radar, we examine newly funded startups Fuse, Sequen, and Atomic, along with continued momentum from Harvey, as they tackle lending, ranking algorithms, and supply chain optimization
1. Fuse
Loan origination systems (LOS) are known as the backbone of the lending industry. They serve as a system of record for vendors – managing the loan life cycle from application to underwriting to approval and disbursement. They’re basically ERP systems for lending. But like many elements of legacy industries, LOS is ripe for disruption… especially disruption that’s propelled by AI. This is the opportunity that Fuse is jumping on. Its founders previously ran an automotive lending startup when the lightbulb moment came. The LOS systems they were using were archaic and needed a refresh. So they stopped what they were doing and pivoted to a company that could lead that LOS disruption. Their software will serve credit unions directly and go up against incumbent software providers in the space, including nCino and MeridianLink. The company just raised $25 million to do so, in a funding round that included Primary Venture Partners, NextView Ventures, and Commerce Ventures.
2. Sequen
One of the things that drives the online economy is ranking algorithms. They sit at the heart of apps like TikTok, deciding what content you see and when. And given all of the digital signals processed to refine these algorithms, they’re a natural place for AI disruption. That’s what Sequen is doing. Led by founders who developed ranking algorithms at Etsy and other online marketplaces, the company is applying AI to productize ranking algorithms as a service – call it RAaaS. The idea is to bring this advanced capability to the rest of the market rather than being locked up in homegrown systems of tech’s biggest players. The company looks at its tech like a large language model, but more like a “large event model.” Just as LLMs train themselves on text, a LEM trains itself on online user behavior. This serves as the foundation for its intelligent ranking algorithms, which can then be applied to any product that requires companies to serve specific content to users in targeted ways. To be fair, this is what Meta uses, and is propelling its ad business today, but the point remains that Sequen wants to bring such capabilities to the rest of the market. That makes it a broad addressable market that applies to everything from ad targeting to recommendation engines. All the above recently attracted venture dollars – to the tune of $16 million in Series A funding. Investors include White Star Capital and Threshold Ventures and Greycroft.
3. Atomic
One of the cliche but critical axioms in business and tech circles is ‘necessity is the mother of invention.’ That’s the case for Atomic, which was inspired by the Model 3 supply-chain issues that almost killed Tesla in 2018. The company was founded by former Tesla execs Michael Rossiter and Neal Suidan to optimize supply chains with AI. The company was incubated within DVx ventures, an accelerator run by former Tesla president Jon McNiell, which also recently led a $3 million seed round in Atomic. With all that Tesla DNA – and an AI-propelled mission to streamline supply chains – the company is primed to upend legacy platforms. It specifically does this with Agentic AI tools to help manufacturing operations plan inventory in more intelligent and automated ways. For one recent customer, the company was able to cut inventory in half, while keeping its existing in-stock rate. For large scale manufacturing or retail operations, cutting down these inventory costs can be a massive boon to cash flow. And the larger the operation, the more pronounced these economic advantages. In the aggregate, Atomic’s customers span CPG, food & beverage and apparel verticals. And it says it has helped these customers cut inventory costs by 20 percent to 50 percent. The sweet spot, says Atomic, is any company that makes or sells physical goods. That’s a pretty big pie.
Honorable Mention: Harvey
AI-powered legal software provider Harvey has appeared in this Local Radar series a few times – a testament to its rapid growth and continuous big-money funding rounds. Now it’s back for more. Last week, it announced that it closed yet another funding round – this time receiving $200 million at an $11 billion post-money valuation. This represents the third round of participation from Sequoia, along with other top-names like Andreessen Horowitz, Coatue, Conviction Partners, Elad Gil, Evantic, and Kleiner Perkins. Total funding to date for Harvey now stands at $1 billion, while its valuation has grown 3.5x in just a year.
