Conversational AI startup Rasa has closed a $30 million Series C round to continue developing its platform for building sophisticated chatbots and voice assistants. The funding was co-led by StepStone Group and PayPal Ventures, with participation from existing investors including a16z and Accel.
Founded in 2016, Rasa started as an open source conversational AI toolkit that has seen 50 million downloads. More recently, it pivoted to focus on the enterprise. The company provides the infrastructure and interfaces for developers at large businesses to create advanced generative AI bots delivering personalized and natural conversations.
Doubling Revenue Growth in 2022
This enterprise focus has fueled rapid adoption, with Rasa stating it roughly doubled yearly recurring revenue in 2022 compared to 2021. Its customer roster consists primarily of major banks, financial services institutions, and telecoms seeking to drive better customer engagement.
These include two of the top three largest banks globally, two of the biggest US banks, American Express and Deutsche Telekom. The freshly injected funding will help Rasa continue expanding while improving its conversational AI platform.
Mitigating Risks of Large Language Models
Unlike some competitors, Rasa’s technology avoids relying on large language models (LLMs) to directly control dialogues. Instead, the company fine-tunes LLMs to analyze user input and then leaves the business logic and conversation flow to its customers. The aim is mitigating risks of hallucinated or inappropriate responses.
Rasa states this approach provides the language understanding capabilities of LLMs without opening enterprises to ethical issues or misinformation. At the same time, it retains control and trust for critical customer interactions.
Conversational AI Use Cases
Enterprise clients utilize Rasa’s platform for various applications:
- Customer service chatbots providing account info or addressing support issues
- Financial assistants enabling money transfers or checking balances
- Telecom bots helping with technical problems like resetting routers
The key goal across these use cases is facilitating more efficient and satisfying self-service interactions. Rasa’s infrastructure aims to make bots feel smarter and more responsive through generative AI.
PayPal’s First AI Investment
The investment from PayPal Ventures marks the firm’s inaugural funding of an AI startup. PayPal already leverages Rasa’s technology internally for enhancing customer assistance. The company cited Rasa’s ability to strengthen engagement and business results as motivation for leading this round.
Having recognized an opportunity to enable more meaningful bot-to-human communication, Rasa seems poised for rapid growth. With seasoned leadership and strong investor support, the company is now scaling its platform to power the next generation of conversational AI across the enterprise realm.
tl;dr
- Rasa raises $30M Series C to continue developing enterprise conversational AI platform
- Company pivoted from open source to focus on helping large businesses improve customer engagement
- Customers include major banks, financial institutions, and telecoms
- Rasa’s technology leverages AI for understanding users rather than controlling dialogues
- Approach aims to mitigate risks related to enterprise use of large language models
- PayPal Ventures leads round, marking the firm’s first AI investment
- Fresh funding to fuel ongoing platform expansion and improvement