Amid a period of layoffs in the tech industry, it is uplifting to witness certain startups thriving despite the gloomy market conditions.
Kore.ai, a company dedicated to developing enterprise-centric conversational AI and GenAI products, has recently disclosed securing \(150 million in a funding round spearheaded by FTV Capital, Nvidia, Vistara Growth, Sweetwater PE, NextEquity, Nicola, and Beedie. This latest funding injection, boosting the company’s total raised funds to approximately \)223 million, will be allocated towards advancing product development and expanding Kore.ai’s workforce, as revealed by co-founder and CEO Raj Koneru during an interview.
In 2014, Koneru established Kore.ai following the launch of Kony, a mobile app development startup, along with several other ventures such as iTouchPoint (an outsourcing firm) and Intelligroup (a tech consultancy). His inspiration to establish Kore.ai stemmed from recognizing the potential of AI, particularly sizeable language models (LLMs) like OpenAI’s ChatGPT, in revolutionizing user experiences.
Reflecting on the tech landscape marked by chaos and uncertainty due to rapid advancements with the introduction of GenAI and LLMs, Koneru expressed, “There were more questions than answers … but I saw conversational AI and LLMs as an opportunity to innovate.”
Although GenAI was not the primary focus for Kore.ai in 2014, Koneru emphasized that the company laid the groundwork for future GenAI products by heavily investing in text-generating and -analyzing models.
In terms of innovation, Kore.ai distinguishes itself by offering a no-code platform designed to empower companies in facilitating various “business interactions” through AI, encompassing customer-to-employee or employee-to-employee engagements via phone or text (such as support chats with an IT/HR service desk). The startup provides workflows and tools tailored to enable companies in sectors like banking, healthcare, and retail to create customized conversational AI apps or deploy pre-built, “domain-trained” chatbots.
Koneru highlighted, “Kore.ai’s platform integrates intelligent virtual agent, contact center AI, agent AI, and search and answer capabilities for a wide range of customer experience and employee experience scenarios.” Additionally, Kore.ai’s suite of industry-specific and horizontal solutions caters to the distinct requirements of various industries and enterprise functions.
While numerous vendors are developing GenAI- and LLM-powered solutions for search, question-answering, and similar applications, Kore.ai distinguishes itself by offering exceptional flexibility in deploying AI apps — whether in the cloud, locally, or in virtual machines — and the level of fine-tuning achievable. Koneru argued that for specific applications like text summarization, answer generation, topic discovery, and sentiment analysis, finely-tuned models, Kore.ai’s forte, outperform larger models from vendors like Anthropic and OpenAI in terms of efficiency and cost-effectiveness.
Moreover, Kore.ai addresses privacy concerns by emphasizing the advantages of smaller, offline models, resonating with the apprehensions of enterprises regarding the use of commercial, cloud-hosted LLMs that may compromise sensitive information.
In the realm of enterprise use cases, Kore.ai has observed the effectiveness of finely-tuned models compared to pre-trained models over the past 18 months. Koneru emphasized the ability to create and deploy smaller enterprise LLMs with high efficiency, accuracy, controlled responses, reduced latency, and costs, requiring less than 2% of enterprise data for training.
Unlike some competitors, Kore.ai provides avenues for organizations to scale their AI initiatives as needed and expand AI utilization across diverse domains. By adopting a platform-driven approach, Kore.ai offers a wide array of choices with built-in guardrails for effective AI implementation, transcending the limitations of various LLM layers.
While other major players like Google Cloud, Azure, and AWS offer robust scaling solutions for conversational AI and GenAI apps, Kore.ai has carved out a notable presence in the fiercely competitive AI landscape, boasting a workforce of nearly 1,000 employees. The company’s clientele includes over 400 prominent brands such as PNC, AT&T, Cigna, Coca-Cola, Airbus, and Roche, with annual recurring revenue exceeding $100 million derived from licensing, usage fees, and consulting services.
The buoyant funding environment for GenAI startups signals a promising outlook, with a recent survey indicating a record $10 billion raised in 2023, marking a substantial increase compared to 2021. Despite the uncertainties surrounding the sustainability of GenAI growth in the enterprise realm, Koneru remains optimistic, citing surveys like Gartner’s that reveal a significant portion of organizations are actively exploring GenAI technology for functions like customer service, marketing, and sales.
Navigating a market characterized by rapid growth and disruptive technological advancements, Kore.ai aims to seize the opportunities presented by evolving AI capabilities while navigating challenges related to security, privacy, and compliance. FTV Capital’s Kapil Venkatachalam commended Kore.ai’s open platform approach, scalability, vertical-specific applications, and low-code no-code capabilities, positioning the company well to cater to the escalating demand from global brands seeking innovative AI solutions to enhance business interactions and drive value.
