#44 - Meet the Start-Up Bringing AI to Town Infrastructure

Do you ever wonder how all those potholes get fixed nowadays? A company using AI has figured out a modern way to do it.

We observed that— I observed in one of my first jobs is that there's no good data on the physical world to make the right decisions. There actually is a better solution for these governments. It's really overlooked. It's not like kids are graduating college and jumping out of their seats to go reinvent, you know, public works technology. That's not really a sector that people think of.

You know, it's how you create value is you take something that is not obvious, not easy to do, And you work your ass off and solve it.

Hi, welcome back to this episode of The Tech Optimist Meet the Startup. Today we meet Civil AI, a company who's helping public infrastructure and local governments improve the community's infrastructure. Today, our host for this episode is going to be Mike Collins, Founder and CEO at Alumni Ventures. He's back, he's in the interview seat. And then our guest, Daniel Pelaez, co-founder and CEO of Sybil AI. And then you'll hear me. My name is Sam Herrick. I am the guide and editor for this podcast, The Tech Optimist. So a little bit about the interview today. Daniel and Mike really discuss how Sybil helps These local governments improve and rebuild infrastructure within their sectors. Daniel talks about this massive recurring problem on how all these engineering companies and all these construction companies have a hard time getting correct, accurate, and, you know, modern data on the physical world that they live in. So this is where Civil AI comes in. They have a, you know, a device that they talk about here later in the interview that can be attached to a car and all you do is drive and it scans the environment around you and then converts that into a digital model for these local governments and engineering firms. It measures cracks, bumps, fallen trees, any faulty signs. Like it's some really awesome technology. I can't wait for you guys to hear about Daniel speaking about it. And so yeah, welcome back to this episode and we seriously hope you enjoy. Sit back, relax, and enjoy. As a reminder, the Tech Optimist podcast is for informational purposes only. It is not personalized advice, and it is not an offer to buy or sell securities. For additional important details, please see the text description accompanying this episode.

It's a lonely job, my friend.

Yeah, I know. And people told me that from the start, so I'm not surprised.

I mean, it's— listen, it's all good. I've been doing this for 35 years. You become, um, you definitely want to develop kind of a cupboard of people that you can talk to.

Yeah.

And that can take some time, and it changes as your life develops. It's also just— you just learn to deal with shit over time. You just do it enough. And it's like we could have some major crisis or something going on. And it's like, you know, I don't even— I've been married for 35 years. The bar for me even talking about it at home now is like so high.

Yeah.

That it's just like, that's just another normal day of life. You know, kind of thing. Yeah. So it does. You do build up kind of calluses and scar tissue. You just, you just kind of grind it out. Just try to, you know, my experience has been what's helped me is just saying, hey, are we 1% better today than we were yesterday? Can I make 2 or 3 really good decisions today that move us down the field a little bit? And it's that kind of compounding. That is the most important thing, not the big splashy stuff.

Yep. Yep.

All right. So welcome to Alumni Ventures and our Tech Optimist podcast. We have another episode today of Meet the Startup. This is Civil, one of our 2024 new investments. I'm here with the CEO and founder, Daniel I'm going to mispronounce. It's Daniel Pelaez?

Pelaez. You were close.

Pelaez. Pelaez.

Yeah.

All right. I'm here with the founder, Daniel Pelaez of Civil. Super excited to be an investor. Nice to meet you, Daniel, and welcome to the show.

Mike, it's great to be here. Appreciate you having me.

All right. So hopping right in, you know, tell me about Civil. What's your— what's the elevator pitch?

Yeah, really, our mission as a company is solving infrastructure for the US. So it's something that I'm sure everyone can really get behind. If you just look at our roads, sidewalks, bridges, tunnels, they are in a state of disrepair. The country's investing literally trillions of dollars to fix it. But the problem that, you know, we observe, that I observed in one of my first jobs, is that there's no good data on the physical world to make the right decisions. So that's really what we're doing is enabling communities with better data by digitizing their infrastructure very quickly, very easily, and making it, you know, very easy to understand where they need to prioritize repairs to rebuild infrastructure for the better. So we're doing that with some 3D mapping sensors that we deploy on vehicles, either through civil engineering firms or through government vehicles themselves. We 3D map every single centimeter of a roadway, of a sidewalk, identifying cracks in the roads, deficient signs, trees that could be of hazard. And then we report everything in a very easy-to-understand, digestible fashion for governments to really use in their day-to-day planning operations and capital improvement budgeting as well. So building better infrastructure for towns and cities of the US at the end of the day.

All right. I think everyone who listens to this podcast knows the general rule of thumb on how things go here. So Sivil, uh, you know, spent some time and really invested in a demo video for the technology and for their company and for their, you know, just influence and their mantra on why they do business and how they do business. It shows the sensor, it shows how it works, it shows their software that comes along. So I'm gonna play that now. You can see the visual on, you know, all of our socials, or you can just listen to it here in podcast form, but then After that, we're going to hop into an ad. And then right after that, we're going to hop back to the interview where Mike starts to talk to Daniel about where they are as a company, Civil. So let's hang tight and keep going.

Welcome to Civil, where we make manual infrastructure assessments a thing of the past. Our nation's infrastructure has been overlooked for a while now, but it isn't too late to start making the necessary changes in the way we manage it. Current methods of infrastructure inspections can be time-consuming, costly, and produce inconsistent and fragmented data. Cyvil has solved these problems with their proprietary technology that makes infrastructure asset management simple, quick, efficient, and cost-effective. By using 3D mapping technology and artificial intelligence algorithms, they have developed the perfect solution for any civil engineering firm or government agency. Agency. The Civil Sensor is sent to you in an easily shippable package. Simply mount the sensor to the roof of any vehicle to get started. Once the sensor has been mounted, all you have to do is turn it on and drive around. As you drive, the Civil Sensor scans the world around you, creating a 3D digital twin of the built environment while capturing high-resolution imagery and laser scan data. When you've completed After collecting data for your project, simply upload everything to Civil Secure web-based platform. Then kick your feet back as the algorithms do all the heavy lifting by processing the data and delivering actionable results. Once the data is analyzed, log into Civil's platform to review your results in depth. You can also export all data and integrate it into your favorite geospatial and engineering software. By leveraging Civil's technology, engineering firms are able to gain operational efficiencies, reduce project costs, and deliver better results. Firms can also be awarded more business by being able to submit better, lower-priced bids than their competitors. Reach out today to learn more and set up a demo. Better data, better decisions, better infrastructure. That's what Civil is all about.

Hey everyone, just taking a quick break so I can tell you about the Deep Tech Fund from Alumni Ventures. AV is one of the only VC firms focused on making venture capital accessible to individual investors like you. In fact, AV is one of the most active and best-performing VCs in the US, and we co-invest alongside renowned lead investors. With our Deep Tech Fund, you'll have the opportunity to invest in innovative solutions to major technical and scientific challenges, which can have a hugely positive effect on society. Companies that have the potential to redefine industries and create a more sustainable future and deliver significant financial returns. So if you're interested, visit us at av.vc/funds/deep-tech. Now back to the show.

And you're an early-stage company. Tell me a little bit about where you are in your journey.

Yeah, so early stage, I don't know if there's any metrics that really define what that is, but we are now 3 years into our journey. Went full-time on this in 2021 and fiddled around a little bit. That was right after graduating college. Started generating real revenues in 2022. And here we are today. We've already worked with over 200 towns and cities across the US, pushing close to 300 by the end of this year, really just all done in the last year and a half, and working with about a couple dozen large civil engineering firms across the US as well. So yeah, we've been able to scale up a little bit, certainly. You know, there are thousands and thousands of municipalities and governments that we can be helping out at the end of the day, but we're seeing some good traction. We're about 20 employees based here in Boston, Massachusetts.

Excellent. Tell us a little bit about the origin story. I mean, you're, you're on the younger end for being a founder entrepreneur. Tell me a little bit about how Civil came to be.

Yeah. I, I think personally it's a fun story. So it goes back to, um, after my freshman year of college, I did not have a cool internship. I was just working a manual labor job at the local public works department in Southbury, Connecticut, one town over from where I grew up. And I was just one of the folks that was driving a pickup truck, you know, starting at 6 AM every day, finding things that are broken. Like, that was a job. Drive around, find things that are broken, fill potholes, fix signs, cut down trees. That's it. And I remember asking the director, you know, do we have a better way to prioritize how we're going about things? And maybe there's a list. He said, no, Daniel, there's no way to track these things. Things just break. Someone calls and we go after fixing it. But we wish there was a better way. And kind of went back to school. I was studying electrical engineering. at Worcester Polytechnic Institute in Massachusetts. I was learning about self-driving cars and robotics and computer vision and low-cost LiDAR sensors and cameras to achieve this for autonomy. And just started to think, you know, had that experience in the back of my mind, started to realize what this technology could do, how far research and investment in these fields has gone, and thought, you know, I think there actually is a better solution for these governments. It's really overlooked. It's not like kids are graduating college and jumping out of their seats to go reinvent, you know, public works technology. That's not really a sector that people think of. And, uh, yeah, saw it as a big problem to solve and just kind of caught that entrepreneur startup bug, even though I had no idea what a startup was in undergrad. Um, but fast forward a couple years, had some great mentors, did tons of customer discovery when I was still in college, and then— Shortly after graduating is when we raised our first small sort of angel round to actually pursue the idea full-time after we had validated it with tons of towns in Massachusetts.

Tell me what you think is on trend. I mean, what are the big tailwinds behind Civil?

Yeah. Again, with startups, everyone knows a lot of it is just luck. And it's not like we knew this was happening, but When the infrastructure bill, the bipartisan infrastructure bill was signed and passed, I believe in 2020 or maybe 2021, that certainly just made the greater public and even like the venture community aware, as, you know, major dollars were going towards fixing this massive, massive problem and there really was no good way to do it. So that definitely helped just build awareness because I remember in undergrad in college, we would talk to angel groups and they'd say, Public works departments and roadway infrastructure. Why do we care about that? I want a SaaS platform that has nothing to do with the physical world. That changed a little bit. And I think everyone has seen the last few years trends of venture. People are not really scared of big, hairy problems that have to do with the physical world anymore.

Okay. I want to add some info on the bipartisan infrastructure deal. And the bill that Daniel brought up here and how it really sort of helped streamline the success of civil. So an article came out published by the White House at whitehouse.gov on November 6th, 2021, from the briefing room. And I'm going to, you know, talk about a few things from that. So today, Congress passed a bipartisan infrastructure deal. A once-in-a-generation investment in our nation's infrastructure and competitiveness. For far too long, Washington policymakers have celebrated Infrastructure Week without ever agreeing to build infrastructure. The president promised to work across the aisle to deliver results and rebuild our crumbling infrastructure. After the president put, put forward his plan to do exactly that and then negotiated a deal with members of Congress from both parties, this historic legislation is moving to his desk for signature. So some highlights in that legislation, um, to like some of the goals, or, you know, the goals of this bill are to deliver clean water to all American families and eliminate the nation's lead service lines, ensure every American has access to reliable high-speed internet, repair and rebuild our roads and bridges with a focus on climate change mitigation Resilience, equity, and safety for all users. Improve transportation options for millions of Americans and reduce greenhouse emissions through the largest investment in public transit in U.S. history. Upgrade our nation's airports and ports to strengthen our supply chains. Make the largest investment in passenger rail since the creation of Amtrak. Build a national network of EV chargers. Upgrade our power infrastructure. Make our infrastructure resilient against the impacts of climate change. Like, there's a bunch of, uh, really cool goals in this that we probably should, you know, look now, uh, 3 years later and see how much progress we've made. But Civil probably could tell us how much progress they have made because of this bill. Um, but a little bit more into, you know, rebuilding the roads section of this bill. Um, in the United States, 1 in 5 miles of highways and major roads and 45,000 bridges are in poor condition. The legislation will reauthorize surface transportation programs for years and invest $110 billion in additional funding to repair our roads and bridges and support major transformational projects. The Bipartisan Infrastructure Deal makes the single largest investment in repairing and reconstructing our nation's bridges since the construction of the Interstate Highway System. It will rebuild the most economically significant bridges in the country, as well as thousands of smaller bridges. The legislation also includes the first-ever Safe Streets and Roads for All program to support projects to reduce traffic fatalities, which claimed more than 20,000 lives in the first half of 2021.

So we're still a data analytics software company at the end of the day. There is a hardware aspect which is enabling the connection of the physical world to the digital world. Software is eating the world, as everyone knows. That's been the trend over the last 20 years. But what someone said that I really like is that that's really already happened, but hardware is really what gives software the ability to sink its teeth into something meaningful. And I see that as kind of the next trend that is gaining popularity, and maybe we were towards the beginning of that.

I just wanna agree with you on that, is I think there's much more open-mindedness now to Other sectors. You know, again, going way back in time, it was 3 segments of the society were venture-backable, right? Software. And now it's more and more sectors, more and more niches, public sector, private sector.

Yeah.

Defense. You know, hardware and software, I think, is now viewed as a positive. Hard things are viewed much more as a positive. It's how you create value is you take something that is not obvious, not easy to do, and you work your ass off and solve it. Yeah.

And

people said the same thing, Daniel, about my approach to venture capital was to deal with— be a co-investor only go after retail customers. And people go, that's so hard to raise. And we've raised coming up on $1.5 billion from individuals. They said, oh, just go get it from the likely suspects. But then you're like 3,000 other venture firms. Yeah. So the fact that you're doing something that is physical, dealing with government, it's hard. But, you know, go hard, go solve hard shit. I mean, I'm all for it. So congratulations to you.

That's what our team just loves most. We were talking about, you know, what makes a good employee. Our employees are not scared to solve these big, massive, hard problems. You know, there are unknowns too at the end of the day, but if we're successful, there's just such massive opportunity also just for impact in like the communities. we live in, like real, real-world impact. We're solving real-world problems here. They are hard as hell. But, you know, if/when we figure that out, it's, it's really going to be pretty special and, you know, really be differentiated and valuable too at the end of the day. So hopefully something everyone can get behind.

And listen, I think it's one of the reasons we see young people being successful entrepreneurs. You know, this is a question I get a lot. And obviously you have great entrepreneurs who start companies at kind of every age and stage and background.

Yeah.

But doing hard things takes a bunch of energy. And frankly, it takes a bit of being open-minded and not being like, oh, this failed in, you know, 1999. And so it's going to fail again. So it's like, you know, the, the energy of youth, the open-mindedness of youth shows you the importance of that versus kind of experience. Yeah. So, an ask. We have a big community of people who have invested in our funds and a lot of other entrepreneurs. How could people help Civil, help your company, Daniel? What's your ask?

I guess the one ask would just be if you're involved with your local government and you really do care about the decisions they make and, you know, honestly building a better community, quality of life for everyone at the end of the day, you know, I'd push them to be at least aware of what else is out there for them to, you know, gather data on their critical infrastructure assets, on their roads, on their sidewalks. And if, you know, Civil is one of those options, I think just building awareness because these government agencies, I know a lot of people like to poke fun at them and say they're slow, they don't know what they're doing, but they are— they truly have super limited resources. They're understaffed. They're really trying their best. So it's hard for them to go out and do research and even figure out what they need to do. I'd say that would be one ask. If you're involved, at least help make them aware as to how they can be running a better city or town at the end of the day. The other ask I would, I would say is I love to learn all the time. If anyone has you know, started a company working with governments, local governments before, and you had some level of success, I would just, you know, reach out, would love to chat and just hear about your experiences. Because that's one of my favorite things to do as a founder is hear from people that have, they've succeeded, maybe they failed as well, and see how I can, um, you know, do a little bit better with my business at the end of the day.

One more ad and then we're going to wrap up the episode. Hang tight.

Do you have a venture capital portfolio of cutting-edge startups? Without one, you could be missing out on enormous value creation and a more diversified personal portfolio. Alumni Ventures, ranked a top 20 VC firm by CB Insights, is the leading VC firm for individual investors. Believe in investing in innovation? Visit av.vc/foundation to get started.

Excellent. And last question. Daniel, which is what have you learned personally having, you know, jumped in kind of to the deep end right away? What, what has been a surprise to you?

A surprise? I think, I think I learned this pretty quickly early on. Um, and it was funny, I was hearing, um, Jensen from NVIDIA talk about this the other day, and I was like, oh yeah, I had the same sort of feeling. But it's just as the company continues to be more and more successful, just the— it really doesn't get easier. I think in the early, early days, I thought, you know, once we hit this, we have this milestone, we have this number of employees, this much of revenue or funding, it'll get easier. But in reality, it just kind of keeps getting harder. And I think we were talking before, you just do start getting numb to it. Like if I knew from day one, the problems I'll be solving 3 years into it. I mean, that's what helped with being a young founder is you're pretty naive to everything that can happen.

Yeah.

So, um, I think that was a little bit of a surprise, uh, but it's now something that, you know, you just know is reality. The more successful you are, honestly, the harder it's gonna get. Um, but honestly, in a fun— in a little bit of a fun way. If you don't enjoy pain a little bit as a founder, you're probably in the wrong sort of Wrong line of work.

Yeah. No, it's finding that sweet spot of like being challenged but feeling that you— and there are definite days as a founder where it's like, oh shit, right? Kind of thing. But usually you get a good night's sleep and you get with your team and you just start tackling the problems. You'll develop those muscles and those calluses and You know, your network of, you know, I think the job is always hard and it is a damn hard job being an entrepreneur. And I think there is— there are people that have done it that get it. And if you haven't done it, you don't fully appreciate how hard it is.

Yeah.

But it is also very, very rewarding. Yeah. And I think it's awesome you're taking the journey. We're super excited at Alumni Ventures of being, you know, a supporter of the company. Again, encourage our audience to reach out. Again, you know, young companies need customers. So if you have somebody that might be interested in looking at the product, please reach out. We'll put things in the show notes. Again, other entrepreneurs in our network that have sold into municipalities have some tips. Again, reach out. And so thanks for your time. We look forward to following Cyvil and your progress and keep up the great work, Daniel.

Awesome. Appreciate it, Mike. And yeah, the support that Alumni Ventures has given us so far, it's really been tremendous. So appreciate everything you guys have been doing for us so far.

Excellent. All right. Have a good week, Daniel. Thank you.

Thanks, Michael.

Super. Thanks again for tuning into The Tech Optimist. If you enjoyed this episode, we'd really appreciate it if you'd give us a rating on whichever podcast app you're using, and remember to subscribe to keep up with each episode. The Tech Optimist welcomes any questions, comments, or segment suggestions, so please email us at info@techoptimist.vc with any of those, and be sure to visit our website at avvcapital.com. As always, keep building. Keep building.