Mechanical Orchard has raised $24 million from Emergence Capital at a $95 million valuation after reaching $10 million in revenue and profitability in just over a year.
“That was the epiphany for me to do something that I’ve wanted to do for 25 years: apply a rigorous form of reverse engineering to these very old legacy systems,” Mee toldTheir solution, which rebuilt those systems in cloud-based applications and then managed and updated them for the government groups, turned into its own standalone business, called Ratio PBC. But Mee saw an opportunity to offer the same replication process to other sectors like banking and retail.
Compared to AI model makers reaching multi-billion-dollar valuations on comparable revenue, Mechanical Orchard’s funding appears modest. One explanation: while it’s taking advantage of AI advances, it’s not building its own models, which are far costlier to produce and come with much more hype, said Emergence investor Jake Saper. Another: while Mee insisted Mechanical Orchard won’t be a software services business like Pivotal, there are still humans prominently involved.
“No line of code gets written that hasn’t been tested,” Mee said. “I don’t believe there is a silver bullet. Software engineering got you into this problem over 50 years, and software engineering and computer science will get you out. But it’s not a push-button kind of thing.”
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