Merger and acquisition deals for AI businesses are on the rise again as companies pursue the power of OpenAI’s ChatGPT language product, making the Minneapolis company’s messaging analytics software highly valuable in the burgeoning industry.
Plurallytics, a language science company founded in 2020 by former Public Radio International executives Alisa Miller and Rick Byrne and technologist Morteza Nia, has built an AI that determines which words, images and phrases best convey a brand’s message to different groups of people.
The startup quickly landed several big clients after launching, including St. Louis/Minneapolis-based hair salon franchise Great Clips, Richfield-based Best Buy and Nebraska-based Speedway Motors.
This week, the company was acquired by Dallas-based digital marketing firm Aletheia Marketing & Media Inc. Terms of the acquisition were not disclosed in an effort to expand its suite of marketing services.
Combining Pluralytics’ AI with Aletheia’s marketing know-how has the potential to boost campaign engagement for clients by up to 30%, the companies say.
“In today’s increasingly complex marketing environment, leveraging the power of Pluralytics provides Aletheia with an unparalleled understanding of audience values and motivations,” said Chris Schembri, founder and CEO of Aletheia. “This partnership creates a comprehensive, end-to-end solution to help marketers achieve impactful results.”
Pluralytics was founded with $5.5 million in funding from investment funds primarily based in Texas. The company has been a beta partner of San Francisco-based OpenAI since 2021, even before its well-known ChatGPT, and has been incorporating OpenAI’s GPT3 large-scale language model into its software. This relationship has given Pluralytics leaders a deeper understanding of how to use AI.
“We were interested in using this system to understand tone of voice, and we were one of the first companies to do that in terms of tone of voice,” said Miller, CEO of Pluralytics, who will become Aletheia’s chief AI officer and board member. Byrne will be chief marketing officer and Nia’s chief technology officer.
Miller declined to provide financial details but said Pluralitics had steadily grown revenue from 2021 to 2024. Aletheia plans to reskill 10 full-time employees at Pluralitics, giving the combined company more than 50 employees and about 55 clients.
“We were very intrigued by Aletheia,” Miller said, “because they were working in an area that was very complementary to Pluralytics in terms of being able to provide audience understanding and really deep content information around language and imagery.”
Pluralytics is the second Twin Cities AI company to be acquired this month: Outsell, which uses AI to create customer messaging for auto dealerships, was acquired in a $100 million deal.
Miller said the marketing AI opportunity, which focuses on messaging analysis and optimization, is at least $4 billion this year, and he expects the overall AI marketing industry to reach $80 billion within 10 years.
According to investment research firm Pitchbook, merger and acquisition activity for AI and machine learning companies in the U.S. increased to $70.3 billion in 2021 from $32.3 billion in 2020. It then fell to $30 billion and $28.9 billion in 2022 and 2023, respectively, but has increased significantly in the first six months of 2024, reaching $38.5 billion so far.
