Deloitte LLP has spun out one of its software businesses into a standalone Toronto startup, led by the outgoing head of its artificial-intelligence practice.
Shelby Austin, former managing partner of Deloitte’s Omnia AI business, is now chief executive of Arteria AI, which was known as dtrax at the Canadian professional-services giant. She is joined by 17 other ex-Deloitte employees, including partner Abrar Huq and director Jonathan Wong, now Arteria’s chief revenue officer and chief technology officer, respectively. Jas Jaaj, Deloitte’s national services leader for AI, analytics and data, is taking over for Ms. Shelby.
Arteria’s artificial-intelligence-based software is intended to help large enterprises simplify and speed up the process of managing contracts. As users assemble contracts, the software automatically suggests wording they can use, and then tracks the progress of the deals, including whether parties are fulfilling their obligations. The software was already generating millions of dollars in revenues for Deloitte from undisclosed Fortune 100-sized customers in North America, Britain and Asia.
Deloitte spent more than $1-million developing dtrax over the past four years, and the partners of Deloitte LLP, the standalone Canadian unit of the global Deloitte network, will keep a 25-per-cent stake in Arteria (Ms. Austin owns the rest). Deloitte will be Arteria’s preferred services partner to implement the software with large users.
“I think everybody is pretty happy with the way it turned out and truthfully I don’t think Omnia needs my particular touch any more. I’m the builder, not the ongoing maintainer,” Ms. Austin said. But, she added, “I think right now, particularly [during the pandemic], it will prove to be the dumbest or smartest thing I’ve ever done.”
Deloitte CEO and managing partner Anthony Viel said, “I don’t feel I’m losing her, she’s just operating in a different construct, collaboratively. Developing our assets and opportunities with alliance partners is part of our strategy going forward. I feel that she’s part of that.”
The spinout is a bookend to Ms. Austin’s start at Deloitte in 2014, when it bought her legal-services startup and made her a partner. In May, 2018, Ms. Austin became managing partner of Omnia AI, charged with building Deloitte’s AI practice. In June, 2019, her role expanded to overseeing Deloitte’s investments in high-growth ventures and other innovation opportunities.
Due to the pandemic’s economic impact, Ms. Austin fell short of her goal to triple Deloitte’s AI team to 1,000 people. However, with half the targeted staff, Deloitte still reached its financial goals, averaging about 35-per-cent revenue growth and reaching $100-million in annual revenue.
But Ms. Austin, a trained lawyer and self-described entrepreneur at heart, found herself drawn to the idea of spinning out dtrax, one of several tools developed under her watch leading Deloitte’s internal innovation group.
“We went to the organization [last year] and said, ‘Does it make sense for this to continue under the umbrella of Deloitte or not?’ ” said Ms. Austin. “We decided it would be great to continue to have the support of Deloitte, great for Deloitte to own a minority stake, but allow us to get significant third-party investment and try to be a bit more agile” as a separate company.
Mr. Viel said it “took a bit of time” to work through the idea that dtrax would work best as a standalone firm. “I wasn’t reluctant or hesitant at all. One of my questions was, ‘Why couldn’t we do that?’ ” within Deloitte.
Ms. Austin said “If we wanted to get it to a mid-sized [company], we’d certainly be able to do that within Deloitte … but we’d really like to make a go of it” and take “a big swing” to try to become a big global company. She added that Arteria, which she’s now financing “with whatever is in my bank account and whatever I can mortgage,” will be looking to raise “many millions of dollars” to fuel expansion.
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