Some firms are flourishing despite the negative market outlook amid IT industry cutbacks.
Today, FTV Capital, Nvidia, Vistara Growth, Sweetwater PE, NextEquity, Nicola, and Beedie led a $150 million investment round for enterprise-focused conversational AI and GenAI business Kore.ai. In an interview, co-founder and CEO Raj Koneru stated that the firm collected ~$223 million to invest in product development and personnel expansion.
Koneru founded Kore.ai in 2014 after founding Kony, a business that develops mobile apps, as well as numerous other smaller businesses like outsourcing firm iTouchPoint and IT consultant Intelligroup. AI, especially large language models (LLMs) like OpenAI’s ChatGPT, may alter user experiences, which led him to start Kore.ai.
After GenAI and LLMs were introduced, the tech landscape became chaotic and confusing because of rapid improvements, Koneru stated via email. Although there were more uncertainties than solutions, I viewed conversational AI and LLMs as opportunities for innovation.
GenAI is a new field; hence, Kore.ai didn’t produce GenAI products in 2014. But Koneru believes the business was setting the groundwork for GenAI goods by spending substantially on text-generating and analyzing models.
How does Kore.ai innovate? Koneru says the firm delivers a no-code platform to power “business interactions” using AI, such as phone or text support discussions with an IT/HR service desk. Kore.ai helps banks, healthcare, and retail enterprises build new conversational AI apps or deploy pre-built, “domain-trained” chatbots.
Koneru added that Kore.ai’s platform includes intelligent virtual agents, contact center AI, agent AI, and search and answer capabilities for all customer and employee experience use cases. “In addition, Kore.ai’s industry and horizontal solutions meet industry and enterprise needs.”
Aren’t many vendors developing GenAI- and LLM-powered search, question-answering, and other applications Kore.ai supports? Indeed, there are.
Acree hosts a platform for creating business GenAI apps, and Giga ML helps enterprises deploy LLMs offline. Reka and contextual AI just emerged from stealth to enable corporations to construct unique AI models, while Fixie is creating tools to let firms code on LLMs.
Koneru says Kore.ai gives enterprises enormous flexibility in where they can deploy their AI apps—in the cloud, locally, or on virtual machines—and how much they can fine-tune them. Koneru argues that Kore.ai’s fine-tuned models are better and cheaper than Anthropic and OpenAI’s larger, more powerful models for text summarization, finding and generating answers, topic discovery, and sentiment analysis.
For smaller, offline models, privacy is an issue.
According to a 2023 Predibase poll, over 75% of companies won’t use commercial, cloud-hosted LLMs in production because of concerns that they’ll endanger sensitive data. A separate Portal26 and CensusWide study found that 85% of organizations worry about GenAI’s privacy and security.
“Over the past 18 months, we’ve found that fine-tuned models outperform pre-trained models for enterprise use cases,” Koneru added. “Compared to a large pre-trained model, it takes less than 2% of enterprise data to train and fine-tune a model that companies can safely deploy for enterprise use cases. We’ve designed smaller enterprise LLMs with improved efficiency, accuracy, response control, and, most significantly, lower latency and cost.”
Koneru adds that Kore.ai allows enterprises to scale up their AI and apply it in new and different sectors, unlike other competitors.
“Kore.ai sits above the infrastructure and fragmentation of all LLM layers with a platform-driven approach, offering freedom of choice with built-in guardrails for effective AI implementation,” Koneru said.
Whether these qualities are distinctive is debatable. Google Cloud, Azure, and AWS offer solid scaling options for conversational AI and GenAI apps, and Kore.ai isn’t the only platform that lets clients deploy models in local and cloud computing settings.
Whatever its platform, nearly 1,000-person workforce, marketing strategy, or all three, Orlando, Florida-based Kore.ai has made a significant imprint in the competitive AI business. The company’s customer base exceeded 400 brands (including PNC, AT&T, Cigna, Coca-Cola, Airbus, and Roche) last year, and its annual recurring revenue is now over $100 million due to license, use, and consulting costs.
It undoubtedly helps that GenAI startups of various kinds receive excellent investment. GlobalData, a London-based data analytics and consultancy organization, found that GenAI companies raised a record $10 billion in 2023, up 110% from 2021.
GenAI isn’t a business home run yet, so the expansion may not be sustainable. Koneru cites Gartner’s October survey, which revealed 55% of companies are exploring or using GenAI software for customer support, marketing, and sales.
“We haven’t observed any market slowdown,” Koneru added. “Our biggest challenge is to operate and innovate in a market that’s grown rapidly and been disrupted by technology, changing user expectations, and the integration of newer AI capabilities that are evolving daily. Enterprise players must use technology while avoiding security, privacy, and compliance issues.
Kapil Venkatachalam of FTV Capital said, “While the advanced AI market has grown rapidly in recent years, many enterprises are grappling with how to responsibly and effectively deploy AI across their organizations. We liked Kore.ai’s open platform approach for leveraging AI models, scalability, vertical-specific out-of-the-box applications, and low-code no-code capabilities, which positions them to capitalize on global brands’ growing demand for innovative AI solutions to improve business interactions and drive value.
