You may be in love with your mobile banking app, but at the end of the day your app is not as smart as your banker and your banker is not as convenient as an app. Thankfully, Kasisto merges online financial management with the capabilities of a banker into a fully loaded AI-powered assistant that can handle a wide array of financial services you need. The company’s intelligence platform, KAI, is used to power financial institutions online presences and the platform built specifrically for financial services is able to react to both complex and simple requests unlike other conversational platforms. This ensures a seamless transaction and will not result in a frustrating customer experience.
AlleyWatch chatted with cofounder Zor Gorelov about the trajectory of the company, its future plans, and the most recent round of funding.
Who were your investors and how much did you raise?
We announced our Series B funding led by Oak HC/FT and with participation from our Series A investors.
We are thrilled to partner with Oak HC/FT, the premier venture fund investing in financial services technology. We consider the firm’s expertise in the financial services market significant asset, and on that note, we’re very pleased to welcome Tricia Kemp, Cofounder and General Partner at Oak HC/FT, to our Board.
We’re on a mission to enable companies to acquire, engage, support, and transact with their customers via human-like, intelligent conversations, anytime, anywhere. Kasisto’s conversational AI platform, KAI, powers omni-channel bots and virtual assistants with deep domain expertise across mobile apps, web, messaging platforms, wearables, and IoT devices. With contextual and personalized conversations, they fulfill requests, solve problems, and predict needs as well as help companies support and market their products and services.
Built with the deepest AI portfolio in the industry, KAI is an agile platform with self-service tools to customize and continually improve consumer experiences and seamlessly add new features.
Our customers include DBS Bank, Mastercard, Standard Chartered, TD Bank, and Wells Fargo, among others and KAI enables them to:
- Offer entirely new and differentiated experiences to their consumers, designed with the most intuitive user interface: natural human language
- Decrease customer care costs by deflecting call center calls and triaging inquiries
- Increase lifetime value of customers with contextual and relevant offers for financial products and services
- Engage customers and promote brand loyalty with proactive financial well-being features
- Meet customers in their preferred channel – mobile, web, messaging or home devices
What inspired you to start the company?
Kasisto is a natural progression of my career creating companies that enable enterprises to better communicate with their employees and customers using leading edge messaging and AI technologies. At BuzzCompany we built enterprises messaging and collaboration platform and SpeechCycle created market leading self-service technology for the telco market. I’ve been waiting a long time for this convergence of technologies to come together – so digital assistants can do more for people in ways that are contextual, personal and predictive.
During my career, I’ve been building software companies with a common mission to help enterprises improve how they interact with their employees and customers. At each company I co-founded, we built solutions that leveraged cutting-edge technologies and created experiences that got at the heart of pain points.
How is it different?
What’s different this time is that for the first-time AI is ready to power human-like conversations – it’s a quantum leap forward. My cofounders come from SRI International (where Siri was created) and IBM T.J. Watson Research Center, and we’re convinced the pieces have finally come together for the conversational user interface to go mainstream.
What market you are targeting and how big is it?
Today, we are focused on the financial services industry where the potential is massive and momentum is happening. We are targeting the finance industry and specifically consumer banking, business / institutional banking and wealth management.
In the coming years, the banking sector is expected to be the biggest contributor to AI market spend. In fact, IDC predicts the global spend on cognitive systems and AI to reach almost $50B by 2020. The banking industry will spend the most out of any industry vertical – approximately 20 percent of the global total. Given that 40 percent of that spend is on software, including cognitive applications and platforms, our market opportunity is over $4B in 2020.
What’s your business model?
Our business model is based on a variable fee structure, including an annual subscription and usage fees.
How are you separating yourself in the AI space?
We are not a chatbot company. We make a conversational AI platform that acts as the AI brain that powers bots and virtual assistants. It’s an open platform that banks can build off of and provides APIs where banks can customize their experience. Think of it as an omni-channel platform that powers contextual, predictive and personalized conversations – engaging customers in their bank’s mobile app, website, Alexa or Facebook Messenger.
Out of the box, KAI is fluent in banking so our bots and assistants know how to help customers manage money, track expenses, analyze spending, make payments, and more. That deep domain expertise is key to delivering intelligent conversations.
Our platform’s unique approach goes beyond basic Natural Language Understanding and combines KAI’s deep-domain expertise with the ability to reason and interpret context. Most conversational AI systems answer a question, but then leave it up to the user as to what they should do next.
Few conversational AI systems go beyond answering basic questions and helping users accomplish one simple goal at a time. KAI, on the other hand, can answer both simple and complex questions and help users achieve multiple goals in a fluid conversation. What really distinguishes KAI-powered bots and assistants are their ability to hold “human-like” conversations. They are trained to not only understand what the customer is saying but track what the customer is trying to do.
What was the funding process like?
Traditionally Series B is the hardest round to raise. We had meaningful momentum and success in the marketplace and we’re able to raise the round relatively quickly. We were looking for a firm and a partner with expertise in our space and strategic vision to help us grow the business. After few initial meetings with Patricia and her team we knew we found the right match. The round was oversubscribed as we also had very strong interested from our current investors as well.
What are the biggest challenges that you faced while raising capital?
In terms of fundraising challenges, it’s really about finding the right fit. Raising capital is all about forging a partnership, especially since the chemistry and strategic contributions of each Board member is really key. With Oak HT/FC, it was a pretty immediate connection – their depth and successes in the finance space and our traction in market minimized the typical challenges associated with raising a Series B round.
What factors about your business led your investors to write the check?
This round of funding is a validation of KAI Banking, the finance industry’s leading conversational AI platform, on a couple different metrics. First, KAI has a track record of achieving product/market fit and exceeding our customers’ expectations – creating engaging experiences with proven business results. It is the only conversational AI platform available to millions of users across countries, languages, and channels. Second, we have a strong team, from management to product to engineering, in place to take the company to the next level.
And, of course, this round is a big endorsement for the category in general – financial institutions are embracing conversational AI, and Kasisto has the production deployments as proof points.
What are the milestones you plan to achieve in the next six months?
The new capital will be used to scale the business to meet the increasing demand for Kasisto’s products in existing and new markets as well as deepen partnerships with existing customers. This new funding will also be invested in expanding the KAI platform to include new AI-powered features and incorporate innovations that continue to deliver both business results and customer engagement and delight.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
I think it’s important to stay focused on your customers and keep fine-tuning your product / market fit. You need to keep building those proof points for your value, including happy customers, predictable revenue, and competitive edge. Capital is attracted to clear and compelling visions but there is nothing like metrics to prove you’re onto something big.
Where do you see the company going now over the near term?
This past year has been one of explosive growth across the board – the number of signed deals and deployed customers, our team’s strength and size, and KAI’s feature robustness and readiness for large-scale enterprise deployments. There is great momentum going into this investment, especially following the recent signing of major customers including TD Bank and Standard Chartered Bank.
We see this momentum continuing as we target more sectors of the finance industry beyond consumer banking – some of this is already in underway in development with major financial institutions. We’re focused on scaling the business to meet the demands for our platform as well as extend the platform’s capabilities.
Where is your favorite bar in the city for an after work drink?
I do not go to bars often. When meeting for drinks I prefer the Rouge Tomate. They are around the corner from our office in flatiron and have great ambience and drink selection in their bar.