Five months old, Noetive raises $41 million Seed to build AI for the physical economy
Israeli founders Amir Frenkel and Dan Barak are betting that AI’s next major frontier lies in factories, logistics operations and other physical businesses.
Five months after founding Noetive, Israeli entrepreneurs Amir Frenkel and Dan Barak have emerged from stealth with $41 million in Seed funding and a bet that artificial intelligence’s next major frontier will be outside the computer screen.
The San Francisco-based startup is building AI for the physical economy, targeting factories, logistics operations, energy facilities and data centers where thousands of variables have to be coordinated at once, from machinery and inventory to workers, suppliers and changing conditions on the ground.
The round, led by Eclipse, is notable not only for its size at such an early stage but also for the group assembled around the company. Noetive’s backers include Meta CTO Andrew “Boz” Bosworth, Airbnb CTO Ahmad Al-Dahle, Nest co-founder Matt Rogers, Gigascale Capital founder Mike Schroepfer and the founders of Israeli AI startup Decart. Israeli venture firm Swish Ventures, founded by former NBA player Omri Casspi, is also participating.
Frenkel, Noetive’s CEO, brings nearly a decade of experience as a vice president at Meta, as well as previous leadership roles at Alphabet and Amazon. He also serves as Eclipse’s chief AI officer. Barak, the company’s chief product officer, was most recently vice president of product at web development platform Netlify.
The two are now pursuing a problem that differs sharply from the information work that has driven much of the recent AI boom. While large language models have become increasingly capable of processing and generating information, physical businesses still rely on fragmented systems that were not designed to understand how an entire operation works.
Noetive calls its proposed solution an “intelligence of record” for the physical economy. It combines a self-improving AI “brain,” designed to learn how a business actually operates, with “eyes and ears” in the form of a multimodal sensing pod that can give the system information about the physical environment.
“AI will transform and reimagine the potential of companies in the physical economy, but current AI solutions were designed for information work living on the internet,” Frenkel said. “Unlocking that potential requires intelligence that learns alongside the operators running the physical business, coordinating people, machines, and digital systems so every decision makes the entire operation smarter.”
The company is already working with strategic design partners in manufacturing, logistics, energy and data centers.
One of those companies, Steuben Foods, says Noetive has changed the way it handles production planning. Menachem Katz, the company’s CEO, said planning that previously took place monthly and required a week of work now happens daily and takes minutes, allowing the business to respond to new orders and changing market conditions.
The company says its AI becomes more capable through deployment, combining reasoning with information gathered from its sensing technology. Its stated goal is to build systems that can coordinate people, machines and digital systems while continuously learning from the operations they are helping to run.
The company has strong Israeli roots despite being headquartered in San Francisco. Many members of its founding team are Israelis living in the United States, while several of its investors also have Israeli connections. The Decart co-founders Dean Leitersdorf, Moshe Shalev and Orian Leitersdorf participated in the round, as did Swish Ventures.
Noetive plans to use the new funding for research into self-improving AI for physical operations and to expand its work with design partners. It is also hiring AI researchers and full-stack AI engineers.
