Conversica raises truckloads of cash to apply AI

Artificial intelligence seems to be a huge growth area. Every vendor wants to be there, and investors have given Conversica $34 million in Series B funding for its AI software.

Conversica raises truckloads of cash to apply AI
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A year ago my inbox staggered under the barrage of vendors that promised to apply big data and predictive analytics to the sales and marketing departments within organizations. I spent a lot of time writing about the space, talking with the multitudinous vendors and expressing my view that there were way to many vendors doing essentially the same thing and making some pretty big claims about what they could actually achieve for their customers.

This market seems to have simmered down, however, and I’ve not see a lot of predictive analytics activity in the space.

But where one buzzword dies and leaves a vacuum, another is sure to arise. And it seems to be the case that artificial intelligence (AI) is that latest buzzword du jour. The number of vendors, both of a large and startup variety, who have been talking about AI in recent months is legion. And the reason for that sort of talk: Buzzwords generate interest and investment.

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A good example of that is vendor Conversica, which today announced a huge funding round that I’ll get to later. But first: who is this vendor and what do they do?

Conversica (alongside, I must add, a bunch of other vendors), calls itself the “leader in AI-powered conversations.” What they would seem to do, essentially, is to provide a platform for bot-delivered communications that allows organizations to engage with their customers and prospects without having to have any of that pesky hassle around actually having real live human beings involved with that engagement.

Apparently Conversica is being used by 16,000 sales representatives worldwide. (That statistic that strikes me, frankly, as weird, since the whole point of bot-driven conversations is that real sales reps aren’t required so much anymore but, anyway…)

Conversica has partnered with vendors such as IBM, Marketo and Salesforce and has integrated its platform into over 45 different CRM, marketing automation and lead management solutions.

Conversica has a friend in IBM

One customer (and, as a partner, slightly conflicted player) is IBM who is bullish about what Conversica can do for organizations. I have to say that IBM isn’t well known as a vendor that spends a lot of time nurturing low-level sales prospects. It is also an organization whose sales margins allow for fat cat salespeople who drive around in Porsches, and hence it is not a natural choice for a tool promising to lighten he touch of sales and marketing. But, nonetheless, IBM is positive about what Conversica offers:

“Conversica’s AI technology has helped IBM be smarter about engaging our prospective customers and maximizing their value as they move through our sales funnel,” said Kevin Pollack, head of IBM’s global email marketing practice. “Not only have we freed up resources within the marketing team and gained immediate value in the form of qualified sales opportunities, but we are also seeing how AI can help to truly transform our entire business moving forward.”

Anyway—all of that positive spin certainly got the investors ready to stump up their “hard earned” lucre. Conversica has raised a reportedly oversubscribed $34 million Series B funding round—the largest AI investment in a private company this year. And Conversica’s growth seems to be the reason why the VCs are so bullish. It boasts 1,000 paying customers and an estimated $18 million in annual recurring revenue this calendar year.

The round is being led by Providence Strategic Growth (PSG), with participation from Toba Capital, Wellington Financial and Recruit Japan, as well as additional funding from Series A investor Kennet Partners and founder Ben Brigham. In addition, Conversica’s board of directors has expanded to include PSG Director Gopi Vaddi and Toba partner Wilder Ramsey.

Of course, the risk with buzzwords is that they go off the boil. But Conversica seems to be doing something of real and enduring value here, given the customer signups. So, in Conversica's case, maybe the buzzword will fall but the organizations will still be around.

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