Exclusive: Startup Arrakis emerges from stealth with $38 million in funding to bring AI to industry

Arrakis, a seven-month-old startup based in London and Paris, just emerged from stealth mode with $38 million in venture funding. The company aims to deploy agentic AI within industrial sectors such as aerospace, energy, logistics, and manufacturing. The latest $30 million Series A round was led by Blossom Capital, with participation from Accel, GFC, MainObject, and Rerail. This brings the company's valuation to $140 million.

CEO Rafael Quintanilla, a former vice president at Accel, argues that the current wave of AI investment focuses too heavily on desk-based knowledge workers. He believes the most significant return on investment lies in the 70% of the economy dedicated to physical goods production and industrial operations. By targeting these sectors, Arrakis intends to move beyond the scope of traditional software-based AI tools.

Unlike consulting firms that rely on human labor hours for strategy implementation, Arrakis seeks to provide software-based operational solutions. The company prioritizes tangible, short-term outcomes over extensive project transformations. For instance, they recently assisted a shipping company in increasing their cash-flow visibility by shifting from monthly updates to a daily cadence. The system functions by automating data entry while learning from operator corrections.

Arrakis maintains a model-agnostic approach to avoid provider lock-in and manage costs. They often start with proprietary models from OpenAI or Anthropic before transitioning customers to open-source alternatives like Mistral. This strategy aims to improve output quality while reducing token costs. The company currently supports five customers and intends to triple its staff, with plans to establish new offices in New York and the Middle East.