Data Startup Labelbox Reaches Toward $1 Billion Valuation With SoftBank Funding
With funding for data startups in a frenzy, data annotation company Labelbox found itself fielding offers to take on ever bigger sums from private market investors at the end of 2021. One venture capitalist offered to lead the investment on a $200 million check. In the end, it partnered with a famed writer of big checks, SoftBank, but opted to take only about half the capital.
Labelbox announced on Thursday that it had closed a $110 million Series D funding round led by SoftBank’s Vision Fund II. It also picked two strategic new investors: Snowpoint Ventures, to help it sell to the government, and Databricks Ventures, to strengthen a partnership with the high-flying data management firm that is widely expected to IPO this year. Follow-on investment came from Andreessen Horowitz, Eduardo Saverin’s B Capital Group and the Ark Invest asset manager Cathie Wood. SoftBank’s Robert Kaplan, who had first invested in Labelbox while at B Capital, joins as a board observer. Cofounder and CEO Manu Sharma declined to disclose an exact valuation, but said the new funding made Labelbox “basically a unicorn,” putting it at the precipice of the $1 billion mark.
Started in 2018 by Sharma, Brian Rieger and Dan Rasmuson (who is no longer with the company), Labelbox is attempting to come from behind versus its peers, many of which were founded years earlier and some of which have already become unicorns. Sharma and Rieger met while studying to obtain aerospace engineering degrees at Embry-Riddle Aeronautical University, a school one hour out of Cape Canaveral known for producing many of the airplane pilots in the United States. The two aviation enthusiasts made a go at launching a space hardware company after graduation, but the venture fizzled out. In 2017, both began new jobs that used artificial intelligence to more efficiently process data. “We were only there a short time because we saw that there was a completely new paradigm [for AI]. All the things they taught us from school, it’s happening now.” says Sharma, who recently moved alongside Rieger to the outskirts of Miami—more for aviation than for the web3 scene, they say.
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