Metropolis, the AI vision startup, has announced the acquisition of Oosto, a prominent player in AI-driven computer vision and security solutions, for $125 million. Oosto, formerly known as AnyVision Tech, has been instrumental in advancing urban management, public safety, and automation through its innovative applications. Despite its significant contributions to AI technology, the sale price represents a fraction of its peak valuation of $380 million. The acquisition marks a strategic expansion for Metropolis, aiming to leverage Oosto’s cutting-edge technology to enhance its offerings.
Oosto has been a key figure in the AI vision space, with a history enriched by substantial investments and strategic partnerships. In 2021, the company raised $235 million in a funding round led by SoftBank and Eldridge. This financial boost not only propelled Oosto's growth but also facilitated its rebranding from AnyVision to Oosto. The rebranding followed the establishment of a research partnership with Carnegie Mellon University, aimed at furthering advancements in AI technology.
However, Oosto's journey has not been without controversy. The company faced accusations of using its technology for surveillance purposes, specifically in collecting large amounts of data. Allegations surfaced regarding the Israeli government's use of Oosto's technology to conduct surveillance on Palestinians. Despite these challenges, Oosto maintained a peak valuation of $380 million and raised a total of $380 million from investors over the years.
The sale to Metropolis reflects Oosto's recent difficulties, including layoffs and the loss of Microsoft as a key strategic investor. The valuation at the time of sale is significantly lower than its previous peak, signaling a downturn in the company's financial trajectory. This acquisition highlights Metropolis's strategic intent to integrate Oosto's sophisticated AI vision technology into its existing portfolio.
"Tech-wise this acquisition makes the perfect sense," – Avihai Michaeli, an investment banking advisor based in Tel Aviv.
Oosto's strategic partnerships have played a crucial role in its development. The collaboration with Carnegie Mellon University underscored its commitment to innovation and research in AI technology. Additionally, Microsoft, once a key strategic investor, contributed to Oosto's growth until their partnership ended amid the company's struggles.
The acquisition by Metropolis presents opportunities for both companies. For Metropolis, acquiring Oosto means access to cutting-edge AI vision technology and potential expansion into new markets. For Oosto, becoming part of Metropolis offers a chance for revitalization and stability under new ownership.
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