Less than six months after its launch, Toronto artificial intelligence (AI) user research startup Cycle AI has been purchased by Miami-based enterprise blockchain platform Crossmint.
Crossmint has acquired Cycle’s technology and tools as part of the all-cash deal. Cycle and Crossmint both declined to disclose the acquisition price to BetaKit. Cycle co-founder and CEO Conor Plunkett has joined Crossmint as a product manager, while Cycle co-founder and COO Elan Bibas and the company’s other three employees have not.
“This is a tough arena with great rewards. But are we the right gladiators for this fight?”
Conor Plunkett, Cycle
For Crossmint, co-founder Rodri Fernández Touza told BetaKit that the deal will help accelerate the venture-backed Web3 company’s AI roadmap and cater to customers “building at the intersection of blockchain and AI.”
For Cycle, which was founded earlier this year, it represented a way for the nascent startup to see the tech it had built live on in a new firm after its founders opted to explore other options.
“This is a tough arena with great rewards,” Plunkett told BetaKit in an exclusive interview. “But are we the right gladiators for this fight? That was the honest question … To make it big, you have to ask yourself the hard questions.”
In Cycle’s case, the answers were unclear, he said. “Are we the right team for the job? And the answer is yes, I think we definitely could have done it. Are we the best for the job? Question mark. And would we have fun along the way? Question mark.”
Cycle saw a lot of opportunity in the user feedback space, but also “fierce” competition. But while Cycle could build the tech, Plunkett said they were lacking on the sales and customer feedback experience and network side of the equation. “We realized that to sell in this space, you need a lot of industry connections, industry experience, and all that fun stuff. I think we kind of got to the point of, is our tech more useful somewhere else?”
Founded earlier this year and bootstrapped to date, Cycle was developing AI-powered tools to improve the user research process. “What we were essentially building was a new way to do feedback,” said Plunkett.
Plunkett noted that customers typically provide feedback through contact forms or support emails. When companies look to gather user feedback, he said they typically conduct 1:1 interviews with product users and ask them questions about how they use it, why they use it, what they care about, and more.
“That’s beautiful, and that works when you’re doing a startup like we were, but it doesn’t scale when you’re going to 1,000 customers, 10,000, [etc.],” said Plunkett. “So what we were trying to build in that space was a way to have the depth of that 1:1 interview, but at the scale of a Google Survey … and we thought, with AI, there was a way to do that like never before.”
RELATED: “The reality check is happening now”: AI leaders on the state of the market at Collision
According to Plunkett, Cycle succeeded in building two products designed to “tighten the loop between what customers want and what you build.” These included an interview bot to automate the feedback process from information-gathering to analysis, and an AI-powered survey offering that fulfilled similar work and marked “a step towards” its vision of a Google Survey that was as deep as a 1:1 interview.
Cycle found a good fit for its tech in Crossmint, which provides tooling for other businesses to build on the blockchain, and had been looking for ways to boost its AI capabilities amid demand from its clients. The company counts Mastercard, Red Bull, Red Bull, Phantom, and Coinbase among its 30,000-plus customers, which range from Fortune 500 firms to crypto-native companies.
“We began seeing increasing demand from current and prospective clients seeking to build at the intersection of blockchain and AI,” said Touza. “Autonomous agents already account for a significant share of on-chain transactions, and generative AI is making it harder to distinguish what’s real [versus] what’s not, driving demand for cryptography tools for verification and authenticity from publishers, brands, and consumers.”
Touza noted that historically, blockchain applications have been difficult to build, maintain, and use. Through its platform, Crossmint offers a suite of asset tokenization, wallet, identity, and payment tools designed to make it cheaper and easier for developers and companies to build blockchain-based products for a variety of use cases, including tokenizing loyalty programs and real-world assets with non-fungible tokens (NFTs), ticketing, identity verification, and more.
“Rather than having to tape together multiple vendors, and employ a large and expensive team of engineers, they can simply integrate our APIs with a few lines of code; we handle all of the complex operations behind the scenes,” said Touza.
This marks Crossmint’s second acquisition this year after its purchase of Y Combinator-backed NFT payments infrastructure startup Winter in February, and its third to date alongside Pollen.
Feature image courtesy Cycle AI.
