Jun. 20, 2018
Sumitomo Corporation Invests Venture Capital in US-based Falkonry, Inc.To promote sophistication of manufacturing operations using AI technology
Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President and Chief Executive Officer: Masayuki Hyodo), through Presidio Ventures, Inc. (Head Office: California, USA), a venture capital firm run by Sumitomo Corporation of Americas, has underwritten the third-party allocation of shares of Falkonry, Inc. (Head Office: California, USA; “Falkonry”), which offers services to revolutionize manufacturing operations using artificial intelligence (AI) technology, which called operational machine learning.
In recent years, the advancement of digital technologies such as the Internet of Things, big data and AI has prompted various business sectors to pursue ICT-driven operational innovation, new business development and a shift to new business models (digital transformation). In manufacturing processes, in particular, data obtained from industrial machinery and products are expected to propel the sophistication of machine defect prediction and product quality control. The global market of predictive maintenance systems for industrial machinery is estimated to grow from approximately $1.4 billion in 2016 to roughly $4.9 billion in 2021. However, issues such as data scientist* and analytical expertise shortages as well as complex system integration tasks remain critical challenges.
Falkonry’s solution is AI that can analyze and learn time series data, such as on the temperature and vibrations of industrial machinery, detect at an early stage abnormal signals that would previously have been overlooked, and identify the data that would significantly affect the occurrence of an abnormality. A notable advantage of the company’s solution is that the introduction of AI has empowered on-site engineers to carry out processes ranging from predictive maintenance of industrial equipment and facilities to pre-shipment detection of defective products and identification of causes of defects, besides short time frame of 3 weeks to receive actionable results vs months.
Sumitomo Corporation will help promote the application of Falkonry’s technology to existing businesses and plans to expand sales of the company’s solutions in the Japanese market through its group company SCSK in the future. In line with the Medium-Term Management Plan 2020 launched in April 2018, it aims to reinforce its company-wide capabilities to provide ICT functions and accelerate the group-wide initiatives for digital transformation. We continue to actively pursue venture capital investments in companies that possess leading-edge ICT technologies, helping to bring their digital technologies into the existing business infrastructure and build up expertise in the respective industry fields. We are thereby meeting evolving needs and contributing to creating a more affluent society and making everyday life more convenient.
* An expert who has special skills in analyzing accumulated data to develop insights that can be applied to business operations
Falkonry is the leading provider of operational machine learning for Global 2000 companies who are looking to achieve significant improvements in the throughput, quality and yield of their industrial operations. Falkonry’s ready-to-use machine learning system, Falkonry LRS, enables operations teams to discover patterns hidden in their existing operations data, apply predictive analytics and receive actionable insights, all without requiring data scientists. Falkonry LRS can be used directly by industrial practitioners, like a “data scientist-in-a-box”, and can be deployed both on-premises or in the cloud.
■Sumitomo Corporation’s Material Issues
Sumitomo Corporation Group positions “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This Project especially contributes to “Establishing a Foundation for Comfortable and Enriching Lifestyles” and “Providing Diverse Accessibility.”