Mindflair (MFAI) has announced that Xylo, a portfolio company held through Sure Valley Ventures' second fund (SVV2), has raised £2.8 million in a pre-seed funding round to accelerate the rollout of its artificial intelligence (AI) platform for UK local authorities.
The funding round was led by CapitalT, with participation from Common Magic, Sure Valley Ventures, Tiny VC, Endurance Ventures and a group of angel investors, including individuals from DeepMind, Gensyn and Dawn Capital, alongside experienced govtech entrepreneurs.
Xylo develops AI software designed to help local authority planning departments process planning applications more efficiently. The platform automates administrative tasks such as chasing documentation, checking submissions and collating consultation responses, while leaving planning decisions in the hands of qualified officers.
The company developed its platform after spending more than 300 hours working alongside planning officers. Early deployments indicate that councils using the technology are processing 40% more planning applications per officer each month, while 83% of officers report improved accuracy when using the system.
"Xylo is addressing a clear and material problem for local government, where AI can have an immediate and measurable impact by reducing the administrative burden while preserving the role of experienced officers," said Mindflair Director Nicholas Lee.
"The successful £2.8 million funding round, supported by a strong group of institutional and sector specialist investors, further demonstrates the quality of opportunities being accessed through SVV Fund II and the potential value within Mindflair's AI-focused investment portfolio."
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The funding provides another positive validation of Mindflair's investment strategy, highlighting continued investor appetite for AI businesses solving real-world problems. With governments increasingly looking to improve efficiency through digital tools, Xylo appears well positioned to scale, potentially supporting future value creation within Mindflair's portfolio.