Jeffrey McGregor, Truepic CEO and Samir Kumar, M12 Managing Partner, talk Microsoft-led $26M funding round for digital image verification software provider Truepic.
AKIKO FUJITA: With millions of images shared online every day, it's becoming increasingly difficult to determine their authenticity. California-based Truepic developed software that verifies images, what is real from the moment that image is captured. And now it's raised $26 million in a Series B funding with Microsoft's venture arm, M12, leading the round. Let's bring in the CEO of Truepic Jeffrey McGregor. We're also joined by Samir Kumar, who is M12's managing partner. Great to have both of you on.
Jeff, let's start with you because we followed the progress of your company for several years now. It feels like there is some momentum in really getting support for image verification. You had senators Portman and Peters recently establishing a deepfake task force at the Department of Homeland Security. Now you've got this funding round. What do you think has raised the awareness of the need for image verification?
JEFFREY MCGREGOR: Hey, Akiko, thanks for having us. I really appreciate it. I think that the-- there's just a universal need for improved trust across business and society. And I think that as time has gone on, there's just been a secular trend of disinformation, fraud, deception. And it's really affected every area of the internet, including the services we use every day, including social media, including the political environment. And being able to restore trust in the visual media that we look at as consumers every day can have a profoundly positive impact on the internet and society.
AKIKO FUJITA: Samir, we've seen M12 really pick up the speed and size of your investments more recently. Why does Truepic make sense for Microsoft?
SAMIR KUMAR: Yeah, we actually first got to meet Jeff and team almost two years ago. And I think in that time, as we've looked at the asymmetry between what is now possible with software tools to use AI to create synthetic content versus techniques and approaches to defend against the misuse of those approaches and to defend against fraud, misinformation, and deepfakes, there's a large asymmetry there.
And I think what we really liked about what Truepic is doing, which is taking this approach of authenticated capture of content, being able to have trust that the image that you're looking at was, in fact, captured in the conditions and on a device in certain-- you know, at a certain time. And that has held true as that media has propagated or had been disseminated, whether it's on the web or in social media.
I think we came to the conclusion that this has to be a critical part of the defense against misinformation. If we rely exclusively on forensic techniques to identify a fake or a deepfake, that's a losing battle. The fundamental AI approach that's being used to generate these fakes has built into it the ability to get better over time and learn from when we find new forensic techniques to capture these fakes, which will ultimately lead to better fakes.
So you can't rely on forensic approaches to do this. You have to be able to say, we have to trust where this content came from. Was it captured in specific conditions that are still true as we look at the content today? And that's really what we liked about Truepic. And Truepic is also a founding member of the provenance associated new industry standard, C2PA, and being able to drive standards, interoperable standards and industry, to make provenance and control capture something that becomes widely adopted.
ZACK GUZMAN: Yeah, and Jeffrey, I mean, I guess it's nuanced there to kind distinguish between proving an image is false versus proving it true. But, you know, you guys have seen some pretty impressive growth from clients that maybe no one really expected to be interested in this, particularly when it comes to proving the authenticity of photographs. Mainly, I'm looking at Ford Motor Company and Equifax. Talk to me about maybe the enterprise value in something like this, too.
JEFFREY MCGREGOR: Yeah, the enterprise value is all about automation and improved downstream decision making. So if you have photos and videos that are coming into your ecosystem-- for example, you may be an insurance company that's taking in photos and trying to make a decision around processing insurance claim-- knowing that those photos and videos are authentic, real representations of what has happened, with an authenticated time, date, and location, allows you to have confidence in the decision around paying a claim in this example, right? And having that ability to make better business decisions is really the core value proposition of Truepic's technology.
And one thing I want to point out, Samir mentioned deepfakes. We've seen a lot of this in the political and societal sphere, particularly as it relates to social media and the content that can spread very rapidly. These same tools are being used to defraud businesses. So synthetic media can be created to generate fake headshots or damage on a vehicle. And enterprise is really left in a difficult position right now because they don't have tools that can help them determine authenticity until Truepic. So we're really excited to continue to drive this technology to market.
AKIKO FUJITA: Jeff, you know, I mentioned that taskforce that's now been created at the Department of Homeland Security. You've got the technology in place to verify these images, but what do you think the government role is in trying to tackle disinformation, misinformation fraud?
JEFFREY MCGREGOR: Akiko, you may have seen the Wall Street Journal reported today Facebook's own study showed that one out of three teenage girls feel worse about their body after using Instagram. And Facebook, after doing that study themselves, has not made changes to the platform. So I think government's role is really legislating around this and ensuring that platforms put the right tools in place to ensure a better, healthier online ecosystem.
AKIKO FUJITA: Samir, finally, I'm just curious to hear more about the progress you've made within M12. A record 55 investments last year-- you're already on pace to break that number this year. What's the thesis that you've led with in terms of the investments, the technology, you're looking for to get the Microsoft backing?
SAMIR KUMAR: Thanks, Akiko. Yeah, we're very excited. I mean, for a fund that was founded in 2016 and where we are today in terms of the number of investments, assets under management, and the growth in valuations for the companies that we've invested in, we're very excited about that progress. I think our core thesis is, we are a financially driven fund, so we think about financial return first and foremost.
But then we think about investing in companies where we really believe Microsoft can help and add value. And that means being able to grow value in the company by either providing access to Microsoft's customers, making Microsoft a customer, helping with go-to-market, helping with sales. And so, we can imagine when we think about Microsoft's core business, it's in the enterprise. And we think about cloud applied AI, business applications, cybersecurity, certainly new and emerging trends in deep tech or frontier tech.
But the core thread across all of these is, can we help? Can we help these portfolio companies realize more value as a result of partnering with Microsoft? And then ultimately, does Microsoft then also benefit from learning what are the workloads, what are the use cases these companies are building, and what does that mean for the enabling infrastructure and technologies that Microsoft offers on things like Azure, so that Azure then becomes, let's say, the preferred cloud for these companies.
AKIKO FUJITA: Samir Kumar, M12 managing partner, as well as Truepic's CEO, Jeff McGregor, good to have both of you on today. Really appreciate the time.