Lightspeed leads $20m round for India conversational AI platform

Conversational AI entails a combination of communication tools such as chatbots, messaging apps, and voice recognition systems that help enterprises automate customer and employee engagement in a way that feels more natural than interaction with a machine. 

Yellow Messenger claims its platform is co-operable with popular enterprise communication channels including Microsoft Teams, Slack, and WhatsApp, as well as other digital assistants and traditional telephone connections. It has raised $24 million to date, including a $4 million Series A last year from Lightspeed India. 

Global COVID-19 lockdowns appear to have spiked an otherwise steady expansion in demand. Yellow Messenger claims to have grown at a rate of 5x year-on-year for the past three years, with conversation volumes rising 50% during March. The first quarter of 2020 was said to be the company’s best performing period to date in terms of new users and annual recurring revenue. 

Yellow Messenger plans to use the fresh capital to expand its operations across Asia, the US, Europe, and Latin America. Its platform is currently facilitating about 30 million chatbot conversations per month for about 100 customers globally, including Accenture, Dominos India, Flipkart, Grab, MG Motors, and Xiaomi India. Services are provided in more than 120 languages across voice and text.

Recent developments include an appointment by the Indian government health authority to provide chatbots to three state governments as a way of supporting citizen engagement on COVID-19 issues via WhatsApp and Facebook Messenger. Yellow Messenger has also deployed specialized chatbots that help enterprises deal with issues around employee and customer engagement specific to COVID-19.

“One in every three companies globally is implementing conversational AI and chatbots —the pull is irreversible,” Dev Khare, a partner at Lightspeed India, said in a statement. “Ever since we met the Yellow Messenger team at our Lightspeed Extreme Entrepreneurs program in 2018, we have seen how the company has taken advantage of this market pull with its rapid time-to-value, transactional platform and multi-language support for global rollouts.”

Human resources and customer service have proven discrete focus areas for AI investors in recent years, with developers noting that brands can more efficiently interact with the public when the process is automated and data-driven systems are able to anticipate user behavior. Recent investment in this theme includes a $51 million round for Uniphore, an India and US-based speech recognition specialist digitizing the call center industry.

US-based Lightspeed Venture Partners confirmed $4 billion in fundraisings across various early and growth-stage vehicles this week, including $1.5 billion in commitments to an opportunity fund that will focus significantly on Asia, including India. Lightspeed India closed its second fund in 2018 with $175 million in commitments for early-stage consumer and enterprise technology start-ups. Lightspeed’s first India fund closed at $135 million in 2015. 

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• Topics
• South Asia
• Support services
• Technology
• Early-stage
• India
• Lightspeed Venture Partners
• artificial intelligence