Houston-based Allganize, founded by Changsu Lee, is taking its $35 million in investment funding and changing the game of AI on a global scale. Photo via Getty Images

It’s taken people some time, but most of society is finally doing a collective 180-degree flip on its once guarded view of artificial intelligence in favor of being open to the idea that it can help humankind in a myriad of positive ways.

That’s why Houston-based software development company Allganize recently secured $20 million in series B funding to propel its industry-leading AI answer bot, Alli.

The All-in-One LLM Enabler Platform, which intelligently responds to customers through natural chat conversation flows, while also enabling the automation of up to 80 percent of support tickets, allows customers to get serviced faster while improving employee productivity.

With the latest $20 million investment by InterVest and Murex Partners, that brings the total funding into Allganize to $35 million. That investor confidence will ultimately help catapult the company’s AI solutions to the next level and help target its planned Japanese Stock Exchange listing by 2025.

“We will lead the expansion of corporate-specific LLM app markets and accelerate the distribution of enterprise automation AI in USA, Korea, and Japan,” says Changsu Lee, CEO of Allganize. “We are dedicated to empowering companies to develop custom LLM applications, enabling practical tasks execution and work automation.”

From programmer to prototype

Allganize’s plans to go public in 2025 stems from Lee’s early ties to Japan. While Lee is originally from Korea, he got his start in Japan, where he was able to secure his first job as a programmer at a gaming company and years later the first investment for the first company he started, ABLAR.

“I'm originally from Korea and when I got a scholarship from the Japanese government, and I went to the research laboratory of Tokyo Institute of Technology, I was not able to speak Japanese at all,” Lee tells InnovationMap. “But that one year actually changed my life. I could speak Japanese while I was there, and I was able to learn a lot of Japanese cultures, and there in the social system, I became a big fan of Japan, and then after that, so I was really looking for an opportunity to do business with Japan, or in Japan.

“I was originally trying to start a company in Japan, and I started to work as a programmer in a gaming company, and at night time, and also the weekends, I was actually building a product to start a company," he continues. "So back then, that product name was ‘Search for You.’ It was every single person's search history, the trees, then if we can find somebody else who's already advanced, but pretty similar search tree, then I was thinking, we can probably, give better suggestions or the recommendations. This is future knowledge that you could probably expect to learn, and if we can have a million users, then we can leverage, those search histories from Google."

Changsu Lee is the CEO of Allganize. Photo via LinkedIn

From there, Lee built the prototype, while making the bulk of his decisions from Japan. Later, while back in Korea, he expanded his business into Japan and met the biggest VC of Japan at an event in Korea and gave a quick pitch of his company’s service. Ultimately, he got the funding and hired Allganize co-founder Yasuo Sato, who he’s been working with for more than 11 years now.

For Lee, it all comes back to where his first idea and mission was believed in and supported, and that place was Japan. Not surprisingly, the bulk of Lee’s customers are in Japan, and it was there that he began his AI journey, by cutting his teeth in machine learning.

“After changing the company name to 5Rocks, we were providing analytics and marketing automation solutions for mobile game companies,” says Lee. “So even back then, we were actually using machine learning, but it was not deep learning. We were using machine learning to predict every single gamer's remaining lifetime in the game. For example, how many days or how many months is this gamer going to stay in the game and how much money are they going to spend in the game for their game items?

“We were predicting this by using machine learning," he continues. "And after we were acquired by the mobile advertising company, I worked as the SVP of the platform there, and I actually got the opportunity to learn the deep learning.

If it’s possible to dig deeper into deep learning, that’s exactly what Lee did as the senior vice president of Tapjoy. Selling his first company and staying onboard in a much more limited role allowed Lee to have a sort of paid internship or technological rotation program into AI and deep learning, which he believed was going to completely change everything and, as a result, was to be the major foundational key to his next venture, Allganize.

Japanese IPO on the horizon

Fast forward to 2023 and the $35 million in investments, Lee and his team are aiming to expand the company’s existing customer base of over 200 enterprises and an IPO on the Tokyo Stock Exchange in 2025.

Take a quick look around and roll call currently known AI platforms. Google Duet, Microsoft Co-Pilot and, of course, ChatGPT quickly come to mind, right?

Spoiler alert: those are all descendants of Allganize’s Alli All-in-One LLM Enabler Platform, which it continues to enhance. Still, Lee and his team still find themselves having to reassure that AI is not the boogeyman movies like The Terminator or Ex Machina have made it out to be.

“I think the most important thing is in how we can leverage and utilize these AI tools,” says Lee. “And because, at the end of the day, it's still a tool, AI is great. It's really powerful. But it's still the tool for helping humans. For example, for white-collar knowledge workers, productivity is completely different when they are using the AI. AI is also more knowledge-focused, and you can answer all the questions that you have.”

Simply put, AI can add not only add to efficiency and productivity, but it can also answer questions before anyone can think to ask them and fill in the blanks to missing information that one didn’t know was missing or could think was missing.

“As powerful as that sounds, AI still can't replace people because people still have to direct it and guide it to where it needs to go,” says Lee. “And because AI's capability is becoming more and more powerful, it’s important for us to learn how to safely train the AI and how to make the good guidelines that we're using for AI.”

With Allganize focused on large language models, they assist businesses to leverage AI to enhance their employees’ knowledge recall and operational efficiency.

“I'm always saying the LLM model is just an engine of the car,” says Lee. “People are buying cars, people are not buying engines. Of course, the engine is important for the car's performance, but people are actually buying cars, not the engines. So, we are really focusing on what kind of application you really want to do in your organization by using LLM.

"And again, our ultimate focus is all the applications because this AI should be used in the daily life of the enterprise, which is the workflow," he continues. “We call them the LLM app. At the moment, the biggest LLM app is called the cognitive search. So when an employee or the customer is asking a question, then AI is understanding all these internal, the best amount of the documents and knowledge bases and databases and they can give comprehensive correct answers to the users. ... Then AI can actually give better answers and they can also give you another suggestion on what to do next. So, that is the biggest application.”

Additional applications include comparing labor agreements in the labor department or on the human resources side, screening several hundred resumes to find who is the best candidate for an open job requisition. Bonus point: it does all of this without the implicit bias that has been historically problematic for HR teams in their recruiting process.

Allganize is also able to create applications without traditional coding like Java and Python.

“Yeah, that is possible because of the LLM,” says Lee. “Because the LLM is such an amazing AI. So, it can handle most of the logics and data. It has been handled only by the software code. But now, the LLM doesn't cover these things. And so users, like somebody who wants to build any of those complicated workflow automations, they don't really need to write a code and they can just use LLM. And then they can just do visual flowcharts, like the old way. And then that is our app. And then all these things are done just like magic.”

Certainly, there’s been quite a bit of “magic” coming from Allganize and that’s all because of Lee and his innate ability to identify problems that need to be solved before they develop and create applications and solutions to address them ahead of time.

“I think two main things are necessary to get to this point with Allganize,” says Lee. “The first thing is expertise in AI, and the second thing is real domain knowledge.

“And I have been working in enterprise, including telecommunications and gaming a little bit more than 20 years. So, how enterprise is working and how the workflow is being defined and how the company and the teams are collaborating, and I have been with it for 20 years. In my academical background, it's all about AI. And I'm writing a code and seeing the very technical details of all these AI models.”

Lee learned a lot during and after selling his first company that he founded, which put him on the correct path to get the funding needed to realize his dream for Allganize.

“I really want to make this a company which can go long and then big,” says Lee. “And that's why we are working on going public. We are doing business in the U.S., Japan, and South Korea. And at the moment, Japan is our biggest market. So, we are going to go public in Japan in 2025. And from that point, we're going to accelerate our global expansion.”

Nine Houston startups ended 2023 with a fundraise. Photo via Getty Images

These 9 Houston startups start 2024 with fresh funding

q4 2023 vc activity

Houston startups ended 2023 with a flurry of funding news — from several seeds and series As to series C rounds and extensions.

Here are nine Houston startups that secured funding in the fourth quarter of last year, according to reporting by InnovationMap. For further reading, here were 2023's top rounds raised.

Amperon Holdings Inc. closed its $20 million series B in October

It's payday for a startup that's improving analytics for its energy customers. Photo via Getty Images

A Houston startup has raised $20 million in its latest round of funding in order to accelerate its energy analytics and grid decarbonization technology.

Amperon Holdings Inc. announced today that it closed its series B round at $20 million. Energize Capital led the round and the D. E. Shaw group, Veriten, and HSBC Asset Management, an existing investor, joined in on the round. Additionally, two of Amperon's early customers, Ørsted and another strategic utility partner, participated in the series B, which brought Amperon’s total funding to $30 million.

“The energy transition is creating unprecedented market volatility, and Amperon is uniquely positioned to help market participants better navigate the transitioning grid – both in the U.S. and as we expand globally,” Sean Kelly, CEO and co-founder of Amperon, says in the release. Read more.

Velostics raised nearly $2M additional seed funding in October

Velostics has raised additional funding to grow its logistics software. Photo via velostics.com

A Houston company that's providing innovative unified scheduling software for the logistics industries has raised additional seed funding.

Houston-based Velostics Inc. raised $1.95 million, the company announced this week. The additional seed round follows a $2.5 million round announced in 2021. The Velostics platform optimizes scheduling for inbound and outbound trucks, saving companies money across the supply chain and resulting in fewer emissions from idling trucks.

“Scheduling is a major headache for all parties focused on reducing cost and delivering on high customer expectations — our cloud based solution is designed to go live in one day with no apps required,” Gaurav Khandelwal, founder and CEO of Velostics, says in a news release. Read more.

Konect.ai secured $5.5M seed funding in October

Konect.ai is using AI and natural language processing within the automotive retail industry. Image via Getty Images

A Houston startup that's using artificial intelligence and natural language processing to disrupt the retail automotive industry has raised seed funding.

Konect.ai announced a $5.5 million seed investment from Austin-based Silverton Partners. The funding will support the company's development of its software, which hopes to advance communications between auto dealerships and auto tech companies and customers.

"This investment from Silverton Partners is a strong validation of our vision and the hard work of our talented team. With this support, we are poised to accelerate our growth and continue to innovate, bringing the most advanced conversational AI products to the automotive retail industry," Cole Kutschinski, president and CEO of Konect.ai, says in a news release. Read more.

Graylog closed $9M in a series C extension round and $30M in financing in October

Graylog, a Houston SaaS company, has new fuel to scale and develop its product. Photo via Getty Images

A Houston software-as-a-service company has secured $39 million in financing and announced its latest upgrade to its platform.

Graylog, which has created an innovative platform for cybersecurity and IT operations, raised equity funding with participation from new investor Silver Lake Waterman and existing investors Piper Sandler Merchant Banking and Harbert Growth Partners leading the round.

“The growth we are seeing globally is a response to our team’s focus on innovation, a superior user experience, low total cost of ownership, and strong execution from our Go-To-Market and Customer Success teams,” Andy Grolnick, CEO of Graylog, says in a news release. “We expect this momentum to continue as Graylog expands its reach and raises its profile in the security market.” Read more.

RepeatMD raised $50M series A in November

Fresh off a win at the Houston Innovation Awards, RepeatMD has raised funding. Photo by Emily Jaschke/InnovationMap

Just nine months after its seed round, a Houston startup with a software platform for the aesthetic and wellness industry has secured $40 million in venture capital and $10 million in debt facility.

RepeatMD, a SaaS platform, announced today that it's secured $50 million, which includes a $10 million debt facility from Silicon Valley Bank. The round was co-led by Centana Growth Partners and Full In Partners with participation from PROOF and Mercury Fund, which also contributed to the seed round earlier this year.

“Even though the aesthetics and wellness industry has continued to innovate a growing range of life-changing treatments, practices continue to face challenges selling treatments and services that are new and unfamiliar to patients,” Phil Sitter, CEO of RepeatMD, says in the release. Read more.

Kahuna Workforce Solutions secures $21M series B in November

Kahuna Workforce Solutions, which provides HR software solutions, announced it has closed a $21 million series B. Photo via Getty Images

A Houston company with a software platform to enhance skills management operations has raised its series B.

Kahuna Workforce Solutions announced it has closed a $21 million series B funding round led by Baltimore-based Resolve Growth Partners. Kahuna's platform provides its users — which come the from health care, energy, field service, and manufacturing industries — with effective assessment, training and development, and staffing and deployment initiatives.

“We are thrilled to work with Resolve as Kahuna begins the next growth phase. Their expertise in enterprise software, and commitment to innovation and continuous improvement fully aligns with our mission, vision, and goals for Kahuna,” Jai Shah, CEO of Kahuna Workforce Solutions, says in a news release. Read more.

Allganize closed $20 million series B in November

Allganize recently closed a $20 million series B round of funding, bringing its total amount raised to $35 million. Graphic via allganize.ai

A Houston tech startup with an artificial intelligence technology has announced it's raised two rounds of funding as it plans to continue developing its product and IPO in Japan.

Allganize recently closed a $20 million series B round of funding, bringing its total amount raised to $35 million, according to the company. Allganize developed Alli, an all-in-one platform for enabling large language models, that's used by over 200 enterprise and public companies globally, including Sumitomo Mitsui Banking Corporation, Nomura Securities, Hitachi, Fujitsu, and KB Securities.

"This investment accelerates our journey towards global expansion and achieving a milestone of listing on the Japanese stock exchange by 2025," Changsu Lee, CEO of Allganize, says in a news release. Read more.

EndoQuest Robotics Inc. announced $42 million series C in December

Houston-based EndoQuest has closed a $42 million round. Photo via Getty Images

A Houston medical device company that's tapping into robotics technology for the operating room has just announced a major chunk of fresh funding.

EndoQuest Robotics Inc. announced that it has closed a $42 million series C to advance its robot technology that's targeting endoluminal and gastrointestinal minimally invasive procedures. Returning investors, CE Ventures Limited and McNair Interests, and new investor, Puma Venture Capital, led the round of funding.

"Our investors share our vision of leveraging robotics to redefine the possibilities in minimally invasive procedures," Kurt Azarbarzin, CEO of EndoQuest Robotics, says in a press release. Read more.

Digital Wildcatters announced $2.5M seed in December

Digital Wildcatters just raised $2.5 million in funding. Image courtesy

With $2.5 million in fresh funding, Digital Wildcatters is on its way to keep empowering the evolving energy workforce.

Digital Wildcatters, a Houston company that's providing a community for the next generation of energy professionals, has closed its seed plus funding round at $2.5 million. The round by energy industry veteran Chuck Yates, who also hosts his podcast "Chuck Yates Needs a Job" on the Digital Wildcatters' podcast network.

"Our industry's survival depends on recruiting the next generation of energy workers. We must adapt to their digital, content-rich world, as we currently lag behind, like a VHS tape in a Netflix world. Digital Wildcatters is our path to modernization," Yates says. Read more.

Allganize recently closed a $20 million series B round of funding, bringing its total amount raised to $35 million. Graphic via allganize.ai

Houston AI company raises $35M, plans for Japanese IPO

fresh funding

A Houston tech startup with an artificial intelligence technology has announced it's raised two rounds of funding as it plans to continue developing its product and IPO in Japan.

Allganize recently closed a $20 million series B round of funding, bringing its total amount raised to $35 million, according to the company. Allganize developed Alli, an all-in-one platform for enabling large language models, that's used by over 200 enterprise and public companies globally, including Sumitomo Mitsui Banking Corporation, Nomura Securities, Hitachi, Fujitsu, and KB Securities.

The funding will go toward expanding corporate-specific LLM app markets and expanding enterprise automation AI in the United States, Korea, and Japan. The company has a goal of listing on the Japanese Stock Exchange by 2025.

"This investment accelerates our journey towards global expansion and achieving a milestone of listing on the Japanese stock exchange by 2025. Our focus is on leveraging LLMs to revolutionize work productivity. We are dedicated to empowering companies to develop custom LLM applications, enabling practical tasks execution and work automation,” Changsu Lee, CEO of Allganize, says in a news release.

In the latest round, InterVest and Murex Partners joined existing investors ATINUM Investment and Stonebridge Ventures.

"Allganize's generative AI-based services have garnered acclaim for their technological excellence and practicality among global financial firms. We foresee substantial revenue growth following this investment," Kang Dong-min, vice president of Murex, says in the release.

Allganize was founded in 2017 in California and has offices in Houston, Seoul, and Tokyo. The company's customers range from the insurance and financial services to oil and gas, construction, and more.

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Texas university to lead new FAA tech center focused on drones

taking flight

The Texas A&M University System will run the Federal Aviation Administration’s new Center for Advanced Aviation Technologies, which will focus on innovations like commercial drones.

“Texas is the perfect place for our new Center for Advanced Aviation Technologies,” U.S. Transportation Secretary Sean Duffy said in a release. “From drones delivering your packages to powered lift technologies like air taxis, we are at the cusp of an aviation revolution. The [center] will ensure we make that dream a reality and unleash American innovation safely.”

U.S. Sen. Ted Cruz, a Texas Republican, included creation of the center in the FAA Reauthorization Act of 2024. The center will consist of an airspace laboratory, flight demonstration zones, and testing corridors.

Texas A&M University-Corpus Christi will lead the initiative, testing unstaffed aircraft systems and other advanced technologies. The Corpus Christi campus houses the Autonomy Research Institute, an FAA-designated test site. The new center will be at Texas A&M University-Fort Worth.

The College Station-based Texas A&M system says the center will “bring together” its 19 institutions, along with partners such as the University of North Texas in Denton and Southern Methodist University in University Park.

According to a Department of Transportation news release, the center will play “a pivotal role” in ensuring the safe operation of advanced aviation technologies in public airspace.

The Department of Transportation says it chose the Texas A&M system to manage the new center because of its:

  • Proximity to major international airports and the FAA’s regional headquarters in Fort Worth
  • Existing infrastructure for testing of advanced aviation technologies
  • Strong academic programs and industry partnerships

“I’m confident this new research and testing center will help the private sector create thousands of high-paying jobs and grow the Texas economy through billions in new investments,” Cruz said.

“This is a significant win for Texas that will impact communities across our state,” the senator added, “and I will continue to pursue policies that create new jobs, and ensure the Lone Star State continues to lead the way in innovation and the manufacturing of emerging aviation technologies.”

Texas Republicans are pushing to move NASA headquarters to Houston

space city

Two federal lawmakers from Texas are spearheading a campaign to relocate NASA’s headquarters from Washington, D.C., to the Johnson Space Center in Houston’s Clear Lake area. Houston faces competition on this front, though, as lawmakers from two other states are also vying for this NASA prize.

With NASA’s headquarters lease in D.C. set to end in 2028, U.S. Sen. Ted Cruz, a Texas Republican, and U.S. Rep. Brian Babin, a Republican whose congressional district includes the Johnson Space Center, recently wrote a letter to President Trump touting the Houston area as a prime location for NASA’s headquarters.

“A central location among NASA’s centers and the geographical center of the United States, Houston offers the ideal location for NASA to return to its core mission of space exploration and to do so at a substantially lower operating cost than in Washington, D.C.,” the letter states.

Cruz is chairman of the Senate Committee on Commerce, Science, and Transportation; and Babin is chairman of the House Committee on Science, Space, and Technology. Both committees deal with NASA matters. Twenty-five other federal lawmakers from Texas, all Republicans, signed the letter.

In the letter, legislators maintain that shifting NASA’s headquarters to the Houston area makes sense because “a seismic disconnect between NASA’s headquarters and its missions has opened the door to bureaucratic micromanagement and an erosion of [NASA] centers’ interdependence.”

Founded in 1961, the $1.5 billion, 1,620-acre Johnson Space Center hosts NASA’s mission control and astronaut training operations. More than 12,000 employees work at the 100-building complex.

According to the state comptroller, the center generates an annual economic impact of $4.7 billion for Texas, and directly and indirectly supports more than 52,000 public and private jobs.

In pitching the Johnson Space Center for NASA’s HQ, the letter points out that Texas is home to more than 2,000 aerospace, aviation, and defense-related companies. Among them are Elon Musk’s SpaceX, based in the newly established South Texas town of Starbase; Axiom Space and Intuitive Machines, both based in Houston; and Firefly Aerospace, based in the Austin suburb of Cedar Park.

The letter also notes the recent creation of the Texas Space Commission, which promotes innovation in the space and commercial aerospace sectors.

Furthermore, the letter cites Houston-area assets for NASA such as:

  • A strong business environment.
  • A low level of state government regulation.
  • A cost of living that’s half of what it is in the D.C. area.

“Moving the NASA headquarters to Texas will create more jobs, save taxpayer dollars, and reinvigorate America’s space agency,” the letter says.

Last November, NASA said it was hunting for about 375,000 to 525,000 square feet of office space in the D.C. area to house the agency’s headquarters workforce. About 2,500 people work at the agency’s main offices. NASA’s announcement set off a scramble among three states to lure the agency’s headquarters.

Aside from officials in Texas, politicians in Florida and Ohio are pressing NASA to move its headquarters to their states. Florida and Ohio both host major NASA facilities.

NASA might take a different approach, however. “NASA is weighing closing its headquarters and scattering responsibilities among the states, a move that has the potential to dilute its coordination and influence in Washington,” Politico reported in March.

Meanwhile, Congressional Delegate Eleanor Holmes Norton, a Democrat who represents D.C., introduced legislation in March that would prohibit relocating a federal agency’s headquarters (including NASA’s) away from the D.C. area without permission from Congress.

“Moving federal agencies is not about saving taxpayer money and will degrade the vital services provided to all Americans across the country,” Norton said in a news release. “In the 1990s, the Bureau of Land Management moved its wildfire staff out West, only to move them back when Congress demanded briefings on new wildfires.”

Houston research breakthrough could pave way for next-gen superconductors

Quantum Breakthrough

A study from researchers at Rice University, published in Nature Communications, could lead to future advances in superconductors with the potential to transform energy use.

The study revealed that electrons in strange metals, which exhibit unusual resistance to electricity and behave strangely at low temperatures, become more entangled at a specific tipping point, shedding new light on these materials.

A team led by Rice’s Qimiao Si, the Harry C. and Olga K. Wiess Professor of Physics and Astronomy, used quantum Fisher information (QFI), a concept from quantum metrology, to measure how electron interactions evolve under extreme conditions. The research team also included Rice’s Yuan Fang, Yiming Wang, Mounica Mahankali and Lei Chen along with Haoyu Hu of the Donostia International Physics Center and Silke Paschen of the Vienna University of Technology. Their work showed that the quantum phenomenon of electron entanglement peaks at a quantum critical point, which is the transition between two states of matter.

“Our findings reveal that strange metals exhibit a unique entanglement pattern, which offers a new lens to understand their exotic behavior,” Si said in a news release. “By leveraging quantum information theory, we are uncovering deep quantum correlations that were previously inaccessible.”

The researchers examined a theoretical framework known as the Kondo lattice, which explains how magnetic moments interact with surrounding electrons. At a critical transition point, these interactions intensify to the extent that the quasiparticles—key to understanding electrical behavior—disappear. Using QFI, the team traced this loss of quasiparticles to the growing entanglement of electron spins, which peaks precisely at the quantum critical point.

In terms of future use, the materials share a close connection with high-temperature superconductors, which have the potential to transmit electricity without energy loss, according to the researchers. By unblocking their properties, researchers believe this could revolutionize power grids and make energy transmission more efficient.

The team also found that quantum information tools can be applied to other “exotic materials” and quantum technologies.

“By integrating quantum information science with condensed matter physics, we are pivoting in a new direction in materials research,” Si said in the release.

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This article originally appeared on our sister site, EnergyCapitalHTX.com.