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DXwand raises $4M to grow its MENA corporate conversational AI platform.

DXwand, a Cairo- and Dubai-based firm that uses conversational AI to automate customer and staff support, earned $4 million in Series A investment.

Established investor Dubai Future District Fund joined UAE-based Shorooq Partners and Cairo-based Algebra Ventures in the deal. The Series A investment will help DXwand grow throughout MENA and accelerate its research and development in generative AI, knowledge mining, and omnichannel conversational AI.

CEO Ahmed Mahmoud headed Microsoft Gulf & Middle East data and AI enterprise sales before starting DXwand. He started his career in engineering, software, and AI development teams. In his commercial responsibilities at Vodafone and Microsoft, Mahmoud worked with clients to investigate how AI may improve productivity and the user experience.

At Microsoft, he saw that Silicon Valley solutions didn’t support Arabic or other Middle Eastern languages; therefore, conversational AI and other AI technologies weren’t completely developed there. I tried to construct AI models for regionally spoken languages; however, we ran into problems. I left Microsoft to start DXwand to fill this gap after seeing commercial potential.

After an accelerator in 2018, Mahmoud founded DXwand to provide small companies with a customer-centric chatbot for social media sales. Qatari and Egyptian angels gave the startup $150,000. The team rapidly recognized it needed to switch business strategies to attain product-market fit and profit.

“We focused on building an AI solution for Arabic dialects, which are complex and sophisticated—even Egypt had more than seven or eight spoken dialects. This helps us perform successfully in this region for the topics we assist, the Microsoft alum said in an interview. “Yet, this value by itself gets more sophisticated whenever we go to more clients because those businesses require not only something to understand the language, but they also wanted something easier to onboard, and at that time, natural language understanding solutions required a lot of effort in labeling the data, which took businesses a lot of time and effort.”

The Egypt-born AI firm switched to knowledge mining and retrieval augmented generation (RAG) areas in 2021, targeting corporations and enterprises instead of small companies. DXwand wanted to construct a knowledge graph that eliminated the need for clients to classify data manually before huge language models were popular. It pre-labels data to speed up client onboarding and handle complex use cases, helping companies adopt.

Take a company with enough regulations and data to fill a room with PDFs. They struggle to automate customer support or sales on their digital platforms without manually categorizing all the data. This is difficult and unrealistic for many. Here comes knowledge mining. With this feature, organizations may input raw data, and DXwand’s system creates a pre-labeled collection and streamlines their operations to develop conversational experiences for customers or staff without laborious data labeling.

DXwand’s AI-powered software automates text and voice communications between businesses, consumers, workers, and citizen-facing government services. This works on call centers, Facebook Messenger, WhatsApp, SMS, and websites. The software claims to understand Arabic and English and display information from conversations on dashboards, enabling organizations to make choices. The business claims that its analytical tools and dashboards turn these chats into leads and sales, improving client retention and acquisition.

Between 2021 and 2022, the firm raised $1.3 million in seed extension from SOSV and other investors and $1 million in pre-Series A from the Dubai Future District Fund to grow this strategy throughout the Middle East and Gulf. Large-language models gained popularity and maturity at this time. DXwand AI expanded its products to meet client requirements as these technologies improved.

“Those funds supported and accelerated our knowledge mining investments, acquiring and leveraging Arabic and other dialect solutions. But also improving on that knowledge mining to make it work for any language and grow the firm beyond Africa and Europe, said Mahmoud, who runs the venture with co-founder Mahmoud Gomaa. “We have African clients today. We used it since it’s language-agnostic, helps customers onboard, and solves difficulties.

The CEO noted that the chatbot platform serves over 40 MENA clients in healthcare, e-commerce, fintech, telecom, government, and legal. Mahmoud stated that the AI business has enabled over 5 million chats and is profitable. Annual subscriptions range from $50,000 to $400,000, depending on consumption. Mahmoud also said that the firm earned over $5 million in yearly recurring revenues in 2023, a 2x year-over-year increase and highlighting the platform’s growing importance and usage in a market with few AI platforms.

Mahmoud said on the call that DXwand aims to expand in Africa and Saudi Arabia with this fresh financing, since both markets are crucial to the startup’s goal. He also emphasizes that the business prioritizes further research in knowledge mining and retrieval, enhanced generation, and developing relationships with technology providers like telecom operators to build meaningful collaborations in the areas it serves.

Juliet P.
Author: Juliet P.

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