Prior Labs joins SAP in €1B+ investment

We're delighted to announce SAP's intent to acquire our portfolio company, Prior Labs, in one of the largest M&A outcomes in German technology history. The Prior Labs team will be joining SAP to lead their frontier AI efforts, while maintaining independent offices in Freiburg, Berlin and New York.

Following regulatory approval and close, Prior Labs will continue to operate as an independent entity within SAP, preserving its mission, leadership, and research agenda. The company would retain its headquarters in Freiburg, Germany, alongside its offices in Berlin and New York City.

We first met Frank, Noah and Sauraj just 18 months ago, before they formally founded the business through our shared interest in tabular foundation models. After speaking to people working in the field across the globe, we knew instantly that Prior Labs was the team to back.

As I wrote when we led their seed ( and only ) investment round last year, Frank Hutter has already changed the field of data science once with his work on AutoML. With Noah and Sauraj now onboard, we felt they had the technical and operational capability to build the best model in the world. Within a month of our investment a paper on TabPFN, their series of tabular models, was published in Nature becoming the most referenced paper on AI last year.

What surprised even us though was the rapid pace at which the team kept improving their models, with the release of TabPFN 2.0, 2.5 and then scaling mode, putting them in a league of their own. They achieved this both by building one of the most talent dense teams in AI globally, but also by taking a pragmatic approach to working with the machine learning community. They started with an opensource model before launching their API and then commercial partnerships, improving the speed and accuracy of predictions in fields as diverse as cancer diagnosis to rail analytics in the process.

We are remain excited about Prior Labs' future. Most of the world's valuable data still sits in spreadsheets and databases, and being able to replace manually-tuned, gradient-boosted trees with a one-shot model approach will transform machine learning for non-experts, in the same way LLMs have for unstructured data.

We're also proud to see the team staying true to their German roots. We've been fortunate to support them in hiring an exceptional team across the globe, but it felt particularly European to sign a term sheet to invest in them in a 900 year old pub in the heart of Freiburg. We look forward to them building a global frontier AI lab out of Germany.

While this marks an incredible milestone for the company and its investors, I am sure it's just the beginning of what they will achieve. 

Thanks to all at Prior Labs, from myself and everyone at Balderton. You can watch my interview with Professor Hutter here: https://www.youtube.com/watch?v=S3TPMF_hU6I