A PE Firm reduced operating margins by 25% after an adtech acquisition.

A PE firm had bought a promising adtech company.  They set out to invest in AI technology that would automate a business process that was currently being performed manually and represented a double digit line item in the operating expenses.  The company’s management felt confident in their ability to design and develop the technology and assigned a senior tech leader from their in-house team to lead the effort.  Unfortunately, the individual in charge had never developed an AI solution.  One year later, the company was six months behind schedule with an MVP that performed no better than chance.  The PE firm brought SVSG in to assess the situation.  The management worried that the team had developed the wrong set of algorithms.  An SVSG CTO with extensive AI experience led the investigation and was able to quickly pinpoint the issues the company was facing.  As it turned out, the company had selected a suitable machine learning platform, but had numerous gaps in their data pipeline leading to corrupted models.  With the issue pinpointed, the company was able to deliver a working solution that led to a 25% drop on operating margins.