Applied Intuition: Building Autonomous Driving Systems for the World's Biggest Automakers

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Hi 👋, this is the Today in AI Newsletter: The weekly newsletter bringing you one step closer to building your own startup.

We analyze a cool, industry-shaping AI startup every week, with a full breakdown of what they do, how they make money, how much they’ve raised, and the opportunity ahead. 

Let’s get to the good stuff in this email: 

• This startup is making autonomous driving software for the world's biggest automakers

• They work with 18 out of the top 20 automakers including GM, Toyota and Volkswagen

• They’ve raised $900M+ in funding with their latest valuation at $6B

So what’s the startup and who are the founders behind it? Here’s the story of Applied Intuition 📈

Applied Intuition was founded in 2017 by Qasar Younis and Peter Ludwig with the mission to enable the emergence of a safe and intelligent machine ecosystem. 🤖 

The startup provides software tools for developing autonomous driving and Advanced driver-assistance systems (ADAS).

They have 3 main services to develop autonomous systems for these automakers 📘:

1. A vehicle software platform: A scalable, modular platform that allows car companies to develop vehicle software more easily

2. Data collection & generation: Tools that collect driving data through real-world testing, and generating synthetic data.

3. Simulation & Analytics: AI-powered tools that help the development and testing of autonomous systems.

Applied Intuition even creates simulations that let customers test and retest their perception of driving a vehicle and helps manage the reams of data involved in developing AVs. 

Backstory 👀

Qasar Younis grew up in a small farming village in Pakistan, and made a move with his family to the Detroit area in the US by the late 80s.

Qasar grew up with a very traditional family, who got blue collar jobs in the auto industry. Qasar followed this route. 🚙 

As a kid he never dreamed of building the next hot software tool, his goal was to be an engineer at an automobile company. 🤔

This meant he could just follow a very specific path. He reverse-engineered how he could become an auto engineer and thought it made sense to attend the General Motors Institute for his undergrad.

Qasar studied Mechanical engineering there, and ended up working at GM shortly after graduating. He was absolutely loving it. 💫

While working at GM however, a manager who’d been working there for over a decade told him the car business was very difficult to be in and that he should get out of it.

This is also when Qasar decided to attend Harvard Business School, where one of his professors confirmed what the GM Manager told him.

“It’s better to be mediocre in a high growth industry than to be exceptional in a mediocre industry.” ☄️

Qasar wanted to make an impact on the world, and he knew the automotive business wasn’t the place to make that happen.

He found 2 areas with huge leverage: Finance and Software. These areas were also super scalable.

He launched his first software startup while at HBS: Cameesa - a consumer crowdfunding startup to help him understand more about software, VC and the startup ecosystem. The startup pretty much died after 3 years.

Qasar then worked at Sears for a bit, managing a $1B+ business unit in the retail space.

The Hustle 🤑

Investing in the retail space inspired Qasar to come up with another startup idea: Talkbin. 

Square had just come out with a dongle which could be paired with an iPad to create a cheap Point of Sales system that would beat out the NCRs and IBMs of the world. 🦾

He started building Talkbin when he realized building something physical was extremely hard and harder to scale.

He thought of an even simpler way of doing this: Going digital. 👾

Imagine people could just checkout on their own phones - that way stores didn’t even need a POS system. The year was 2009…

Through connections, Qasar knew a franchise owner for Outback Steakhouse, so pitched the idea to him: 🤔 Wouldn’t it be cool if when people finish eating they can just type their table number into their phone, pay their bill and leave?

This even saved the waiter a whole round trip.

Before starting to build this, Qasar asked if the owner had any other problems running the franchise. He did.

The owner owned 3 franchises of Outback, and knows the restaurant’s doing well when he’s there but when he’s gone, feels like the place can fall apart. 🍃

Qasar proposed a solution: Add a text box for feedback at the end of the mobile transaction. This way if a customer had a bad experience they’d give an elicit response if they had a bad experience.

Qasar then pitched this to Y Combinator: Every square inch of the planet has an owner behind it, and you want to get feedback from all of them. This was the best way to do it. 🚀 

Qasar got into YC, and got hundreds of businesses in the Palo Alto and Downtown areas in California onboard.

In the process, some people from Google started using the product and grew obsessed with it. 🤩 They scheduled a 30-minute meeting with Qasar to discuss ways they could partner.

The meeting ended up lasting 3 HOURS - Talkbin was a big deal for Google because it could directly integrate into Google Maps and help them upsell ads.

Google ended up acquiring Talkbin for an undisclosed amount, and fast forward to today, it does billions in revenue integrated into Google Maps.

Qasar then worked at Google until 2014, when he joined Y Combinator as COO.

During his time at YC, he worked with Sam Altman and oversaw the beginnings of OpenAI, while being surrounded with some of the greatest young minds in the world.

While seeing companies like OpenAI emerge, Qasar knew AI was going to rule the world. ✨ This is when he decided to leave YC and start his own AI software startup with a friend from Google, Peter Ludwig: Applied Intuition.

Qasar took his learnings from YC and started acquiring their first customers: Small companies in Silicon Valley with 10-person teams and a couple million in funding. 

These startups didn’t give them a lot of money but gave them a lot of feedback. 🔁 This allowed them to get momentum, get better tools and develop a better product.

This way when they approached the GM’s and Volkswagen’s of the industry, they had previous testimonials and very robust tools.

Stats 📊 

🚘 Fast forward to today, the startup has managed to work with 18 of the top 20 automakers including GM, Toyota, and Volkswagen for development purposes.

🪖 They also have a contract with the Army and Defense Innovation unit in the US.

💸 Applied Intuition is profitable (super rare for AI companies nowadays), and has achieved triple-digit percentage growth year over year.

📈 The startup has recently launched an off-road autonomy solution to enable safe navigation of bad terrain, a Gen-AI tool that creates simulation scenarios up to 40x faster. 

🏎️ They’ve also announced partnerships with Porsche AG and Audi this year.

💃 They currently have over 500 employees with plans to grow that even more over the next couple of years.

💰 In March 2024, Applied Intuition raised $250M at a $6B valuation led by Lux Capital, Elad Gil and Porsche Investments Management with participation from Reid Hoffman, Ray Dalio, and General Catalyst among many others.

💴 In July 2024, they raised a further $300M, bringing their total raised to over $900M.

Peter Ludwig says at this point it’s “dangerous for an automaker not to partner with us in some ways because of the sheer complexity and impact of some of the tech we’re working on”...

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