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Scaleout Systems takes data security and privacy to the next level with federated machine learning

November 24, 2023

As artificial intelligence (AI) rapidly evolves, the need for improved data security and personal privacy is more urgent than ever. Scaleout Systems, an innovative AI company, addresses this critical challenge and has successfully completed a significant seed funding round. This financing is intended to accelerate the company's development of its unique technology based on federated machine learning, enabling AI to reach its full potential without compromising user data privacy and integrity.

This key funding, amounting to 1.5 million EUR, has attracted a strong group of investors, including Navigare Ventures owned by Wallenberg Investments AB, SEB:s Utvecklingsstiftelse, Almi Invest and Uppsala University Invest; a combination of actors investing in research-intensive startups with the potential to strengthen Sweden's competitiveness as an export nation in the long term.

Andreas Hellander, CEO of Scaleout Systems, explains: "This seed round is a important step for us. We secure resources not only to continue improving our technology but also to expand our market presence. Our goal is to continue to be at the forefront of AI development, especially in federated machine learning."

With its groundbreaking technology, Scaleout Systems enables machine learning in cases where it is complicated, illegal, or inappropriate to transfer the data sources an AI model needs for training. Their solution is effective regardless of the type of training data, whether it's private user data from mobiles, diagnostic cancer images from hospitals, or sensor data from autonomous vehicles.

Ebba Kraemer, former product strategist at Google and now commercial manager at Scaleout Systems, comments on the market: “We see an increased need among companies to enable AI on decentralized data sources. A primary driving force is the large amount of data collected locally, “on-edge”, in areas such as industrial IoT and autonomous vehicles. At the same time, it has become increasingly important to focus on personal privacy and data security, as individuals live more connected lives and the risks and regulations in data handling increase."

With its ability to combine security and scalability with advanced AI technology, Scaleout Systems positions itself at the forefront of next-generation AI solutions, where users can benefit from machine learning without compromising data security and personal privacy.

Salla Franzén from Navigare Ventures emphasizes the strategic relevance: “Scaleout’s framework for federated machine learning is an important key to being able to do AI "for real", and the team's solid research background, technical knowledge, and business plan make us at Navigare Ventures happy to invest in them. We look forward to helping various industrial sectors and research groups solve an important part of scalable, future-proof AI.”

In this significant phase, we are pleased to welcome new investors Navigare Ventures owned by Wallenberg Investments AB, SEB:s Utvecklingsstiftelse, and Mikael Johnsson. Their trust and support are highly appreciated. We are also grateful for the ongoing support and collaboration with our existing investors Almi Invest, Uppsala University Invest, Beijerstiftelsen, Michael Lantz, and Fredrik Wallsten.