Konux's Breakthrough: Advancing Railways with $130M AI Investment

0:00Today on the podcast, I want to talk about a very interesting new AI company that is specifically in the railway industry and talk about how AI will affect rail railways and railways in the railways and railways. in a way that you probably haven't thought of before. So without any further ado, let's dive into it. So the company is called Konux, and it is a Munich-based AI scale-up, which is using machine learning and the Internet of Things to revolutionize rail travel, and they're focusing on switches. So essentially, they're pioneering a SaaS business with a focus on predictive maintenance to upgrade railway infrastructure across the globe.

0:40Now, I'm based in the United States. I've lived, you know, in Europe for a number of years in the past, and I was raised in Canada. So I have, you know, a couple perspectives on a couple different areas. And I will say, you know, in Canada and the United States where things are, where I've lived a lot more spread out, rail is not a very big part of how we commute. But in Europe, rail is a massive factor of how we commute. And of course, you know, growing up in Canada, we'd go on these really long road trips out into, you know, the middle of Canada, where there's very little all around you and there's always railways shipping things.

1:16So it's a factor, but it wasn't ever something that is was very widely used for transporting people. But in Europe, this is a very popular means of transportation. It's a fairly clean and efficient way to transport people, especially with highly high density areas like Europe. And so I think this is a really interesting company. I think this has a lot of really interesting use cases. And of course, it makes perfect sense this is coming out of Europe and not out of Silicon Valley or California or America, for example. In any case, their goal here is really to use deep tech and connected hardware to transform the way railway lines operate by capturing real-time data.

1:57So their plan is to drive digitization and transformative change to what remains of one of the most sustainable mass transit options, which is, of course, the rail network. So as more and more consumers opt to travel by train, I think mostly in Europe, I don't think it's quite there in America and Canada just because of our infrastructure. Governments and railway operators are leveraging new technologies to digitize networks and transform their operations. So in this wave of transformation, Konux has managed to carve a pretty solid niche for themselves by using their advanced tech solutions to essentially tackle the pressing issues in the rail industry.

2:38Now, like I said, this is really awesome, really powerful for Europe, less relevant or less used, perhaps, in the United States, although it would be interesting to see what that would look like if that expanded. I have recently seen some tweets from people here in the U.S. saying, you know, instead of taking a plane or instead of driving a car, they took a train and it was like it took four times as long. And, I don't know, some people say it takes even longer than that. So it's just not quite there in the US, but I think this is really powerful in Europe. I've lived in, you know, France and Belgium for a couple years.

3:12And yeah, we took trains everywhere. It was a great way to get around. So Konux's CEO is Adam Bonfield, and he points out that what makes their AI business stand out is essentially their unique approach to problem solving. So unlike a lot of different AI startups that focus on purely digital problems, Konux takes on the challenges of making sense of real-world data, capturing and analyzing it, and fitting it within the framework of the customer's business needs. so they have managed essentially to gain real-time visibility into daily loads and stresses that railway lines endure. So they do this by measuring, this is super interesting, but they're actually doing this by measuring vibrations through the tracks to identify anomalies that might signify incoming failures and the data once captured and analyzed helps predict the state of the infrastructure over the next few months with an accuracy of around 90 % according to their CEO.

4:10So I think this is actually a really powerful technology. You know, here in the US, we've had a number of very high profile train derailments and train crashes. For some reason, it makes me think of a number of different books that are, you know, about train infrastructure not being great. If you know, you know. and I think that it's really interesting just the fact that we have the capability and AI really does serve a capability here that not a lot of people are thinking about and it has a 90 % accuracy rate so we I think this is a really useful tool that should be rolled out if we had the ability to you know very accurately predict when there was going to be some sort of infrastructural issue essentially with railway lines or with any other sort of infrastructure I think we absolutely should use that and so I think this is going to be a really powerful use case you know not just in not just in the ways that we're seeing it in like the rail that they're you know actively developing it right now but in a lot of other industries you know like I think you know if you imagine listening to I don't know or maybe there's AI that is integrated into a roadway that tracks how many cars drive by or even satellite or google maps you know getting some sort of data aggregated data there where it tracks how many cars are driving over certain roads and based off of that and based off of what types of cars and how heavy they are um you know making sort of predictions about what what sort of schedule needs to be used to have the roadways repaired at the best um at the best you know schedule in order to maintain the maintain maintain the highest quality of infrastructure so in any case i think this is a very interesting use case beyond just rail but they're doing this in rail and apparently it's 90 effective so this is a very useful use case i would say right now their customers are mostly railway operators so they receive maintenance insights throughout a fairly user-friendly software that they've developed that just helps to manage their infrastructure efficiently the application they've created is an ai of ai translates essentially to fewer delays and reduces downtime time for the passengers.

6:26And so, you know, that's kind of what they're selling to these railway operators. They're saying, you know, this isn't just a new schedule or a way to know when something needs to be fixed. But if we can preemptively give you the data so you know when things need to be repaired or fixed, you actually have less downtime. So it's actually saving you money. And I think that any business model where they can prove that they're going to save the company money and specifically show how it affects their bottom line, of course, the safety aspect of it, I think is incredibly important. But beyond that, if they can say, look, it's going to make you more safe.

6:58And also you literally will save more money. I think this is a no brainer for someone like a railway operator to kind of implement some of this technology. So I think the technology has potential to unlock pretty substantial capacity and apparently doubling the throughput on some of the tracks, which in turn has significant implications for the environment by effectively utilizing existing resources. So their AI and IoT driven digitalization of railways, I would say really just kind of shows what is typically a black box for railway operators. So by providing a clearer understanding of the networks, the chances of minor delays snowballing into a major disruption are definitely minimized.

7:47And I think it brings about a really dynamic kind of traffic management reduction, reduction of shutdowns, and also it enables a lot more responsive and efficient train routing. So I think so far they've managed to raise about$130 million. They've tested and deployed their products in 10 markets worldwide. They've been around since 2014, so this isn't anything necessarily new, but they're making a lot of big steps today. they're focusing on using AI in challenging industrial environments and they have a lot of years of research and development which I think has really helped them to develop this kind of predictive AI model that works across a very diverse set of environments which is a complete game changer for the rail industry so overall I think this is going to be a really interesting technology to follow up with and to keep an eye on as we look at you know perhaps how this is affecting rail but how we also start integrating AI models into other sorts of infrastructure and other sorts of industries in ways that we're not really thinking about right now right like uh before reading this or researching kind of this topic i wasn't thinking about how you could track the vibrations of rail tracks to get all sorts of this real world data and make all sorts of predictions using ai um but i think that there's so many different applications for ai and this is just one of the many so it'll be interesting to see how this snowballs into other different areas Cheers.