The latest wave of AI hype has given rise to a new crop of startup stars hoping to spin their algorithms into gold.
While most will fail, a pioneer from a previous wave of AI fanfare has just demonstrated that it is possible to build a sustainable AI-driven business that delivers concrete help to clients.
Launchmetrics announced last month that a majority of its shares will be acquired by Lectra, a French company with an international reach that provides a range of advanced software and data analytics tools to large companies in the fashion, automotive, and furniture markets. Lectra has an agreement to potentially acquire the remaining shares over the next few years for a valuation that could reach $240 million – about 5 times Launchmetrics’ ARR.
In an era when GenAI startups like Mistral AI are raising Series A rounds of $415 million, that sale price may fail to quicken heartbeats. Still, Launchmetrics offers some important lessons for a younger crop of AI founders about how to go beyond promise or potential and build an actual business.
Launchmetrics did this by relentlessly focusing on its core markets of fashion, beauty, and luxury. It grew through a series of acquisitions and then took the risky step of rebuilding its entire platform architecture to leverage the assets it absorbed through these deals to turbo-charge its AI platform.
By maintaining a narrow focus rather than chasing opportunities in unrelated verticals, Launchmetrics developed a practical use of AI that has become an indispensable tool for the biggest companies in those sectors. That specialization will remain at the heart of Launchmetrics as it enters this new phase, according to CEO Michael Jaïs.
“Because the DNA of the company is focusing on fashion and beauty we've got a real track record,” he said. “Not only do we sell to the industry, but we are really part of this industry.”
A Tale Of Two Startups
Launchmetrics is best known for its Brand Performance Cloud. The platform combines machine learning and deep learning algorithms with natural language processing and computer vision to help customers extract information and measure things that once seemed unmeasurable. Clients can use it to manage virtual and physical events, track the performance of a piece of content, and optimize their PR and marketing campaigns.
The platform allows brands to ask and get answers to questions like: How much media value did Kylie Jenner generate when she wore a brand in an Instagram post?
Being able to make sense of such information proved to be an immensely complex task. The AI has to be trained to recognize and understand the people and products in an image or text – both print and digital. Years of technical refinements and training have led to the company’s Media Impact Value (MIV) algorithm.
Those capabilities have attracted an A-list customer base that includes such names as Louis Vitton, Dior, and Gucci.
While Lauchmetrics is a big name in fashion, beauty, and luxury circles, it’s received less attention over the years from the tech media in France. In part, that’s probably because the company is officially based in New York with a large office also in London, and as such it often isn't seen as a big French tech story.
Still, the company has the bulk of its employees in Paris, Jaïs lives in Cannes, and its roots in France are long. And while fashion and beauty may feel specialized, it also represents one of France's most important economic sectors.
Launchmetrics traces its history back to 2 companies founded almost 20 years ago.