Today we are very excited to announce Notion Capital is leading the $15m Series A round into Cogna, a company at the forefront of the ‘service as a software’ trend. I’m thrilled to have the opportunity to back Ben and Lars again who are very much part of the Notion family after we invested in their previous business FiveAI.

In the industry, we like to think that software has been eating the world. But when you look at the data a better description would be more of a nibble. Depending on what source you look at the software industry represents between 5-8% of global GDP. Contrast that with the services industry that represents between 60-70% of GDP and worth around $25 trillion on a global basis.

That’s because most services have been out of reach for the software industry. They have either been too complex or too specialized for off the shelf software to access in any economically viable way. Software has been mostly aimed at large and relatively simple functions such as managing customer information, email campaigns, payments or project management. It provides a tool in an otherwise human based process.

However with the emergence of large language models (LLMs) and GenAI this is all beginning to change.  AI software is both cheaper and faster to develop but also able to manage much more complex workflows. This is a truly compelling combination and leading to the new term that we will start to hear more and more: ‘service as a software.’

Service as a software is a huge opportunity that is difficult to overstate. It will replace some existing software. But primarily it will be a huge growth driver for the industry by accessing opportunities that were previously out of reach. GenAI is the next big super-cycle in tech and will provide the platform for a whole new generation of software. 

Our latest investment, Cogna, is a great example of this. The company’s technology builds off LLMs to understand customers’ pain points within their operating models, define the requirements and develop the software itself in a fully automated way. The result is precision software at scale, a concept that would never have been technically possible or economically viable in a pre-GenAI world.

Cogna is targeting traditional industries rooted in the physical world including utilities, construction, manufacturing, and public sector. Although these sectors represent more than two thirds of the economy, they have historically been underserved by the software industry due to the complex and specialized nature of the work.

As the Chief Operating Officer of Cadent Gas, a Cogna customer, says: ‘Cogna gives us the ability to create precision software at scale across a huge variety of business functions from optimising procurement to bolstering our gas escape management system.’

Ben Peters and Lars Mennen have a clear and ambitious vision to be a major productivity driver for traditional industries. They are also building a super-talented team who are aligned and motivated by the mission. I know Ben and Lars well, having backed them before at the autonomous driving company, FiveAI, that was acquired by Bosch in 2022.  I’m confident that Cogna can be a huge success story and am very excited to be announcing our investment in the company today.

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