The $17.2 million funding round
General Electric (GE) is buying a pair of tech (technology) startups. One is focused on machine learning and the other on data analytics. The company is eyeing $15.0 billion in software revenue by 2020.
The startups General Electric is adding to its portfolio are Wise.io in machine learning and Bit Stew Systems in data analytics. Both companies are based in California. Besides technology, the acquisitions will add ~120 employees to the GE Digital unit. The digital division is on track to generate ~$7.0 billion in revenue this year, suggesting a 20.0% growth over the previous year.
Earlier, GE led a round of funding for Bit Stew that raised $17.2 million for the startup. Cisco Systems (CSCO) is also an investor in Bit Stew.
The pair of startup acquisitions by General Electric comes on the heels of an announcement by the company that it will buy ServiceMax, which develops apps (applications) for functions such as workforce scheduling and inventory management. General Electric is an investor in ServiceMax and has raised more than $200.0 million in venture funding.
Once acquired, ServiceMax could improve General Electric’s software platform called Predix. Exelon (EXC) is among the customers General Electric is wooing to use its Predix platform. Predix could also be used by utilities and airlines such as Southwest Airlines (LUV), Delta Air Lines (DAL), and American Airlines (AAL) to manage their equipment well and increase operation efficiency.
Although GE is targeting $15.0 billion in industrial software sales by 2020, its push into the software business will put it on a collision course with International Business Machines (IBM) and Apple (AAPL). These two companies teamed up to create and offer enterprise software on mobile devices.
IBM and Apple are also eyeing sectors such as airlines and utilities where there is still a strong demand for efficiency solutions.