The most agile and innovative companies will rely on AI-powered digital “coworkers” alongside creative humans to enhance productivity and increase profits. Roots Automation has built the first zero integration, self-learning Digital Coworker (pre-trained bot) that can perform a variety of common tasks found in Insurance, Healthcare, and Financial Services roles. Through interactions with human counterparts, the pre-programmed bots increase their capabilities and become more efficient, better at understanding the business, and eventually have the capacity to offset the work of four to eight individuals on average per bot. For example, an insurance company struggling with human errors in auditing incorporated Roots Automation Digital Coworker to automate bank pulls, financial data review, and identify mismatches in bank records, resulting in an 80% of improvement in cycle time to finish the reconciliation process.
AlleyWatch caught up with CEO and Cofounder Chaz Perera to learn more about the company, how his time as Chief Transformation Officer at AIG provided the inspiration for the Roots Automation, and the company’s first funding round.
Who were your investors and how much did you raise?
Roots Automation raised a $3.2M seed round led by Vestigo Ventures, which specifically focuses on insurance and financial technology companies. Leading the investment were Ian Sheridan and Mike Nugent, both MDs at Vestigo, who have a proven track record as operators, entrepreneurs, and investors.
We are a Digital Coworkers as a Service company that offers pre-trained bots (“Digital Coworkers”). These bots come pre-programmed with the knowledge, skills, and experience required to perform a variety of roles commonly found in Insurance, Healthcare, and Financial Services (i.e., Underwriting Assistant, Claim Adjusters, Patient Intake Specialists, Bill & AR Clerks, HR Associates). The bots learn from their human counterparts through interactions and as a result, become more efficient and gain a better understanding of the business they support.
What inspired the start of Roots Automation?
Prior to starting Roots Automation, I was the Chief Transformation Officer and Head of Global Business Services at AIG. I experienced first-hand the pain points the insurance industry faces and why it’s deeply in need of automation solutions that enable employees to focus on meaningful, impactful work instead of mundane tasks. While my personal experience was within the insurance realm, I knew this offering was needed across the board.
From my corporate experience, I understood that the traditional automation COE model wouldn’t ever truly work with most companies because it’s predicated on having scale. So, what we wanted to bring to market with Roots Automation is the natural scale of our organization enabling as few as one automation to be a profitable, meaningful impactful endeavor for companies of all sizes. We wanted to create a way for companies to offset between four to eight persons worth of work per bot – and we did. By using Roots Automation, employers can give their staff more meaningful, more engaging work instead of tedious, dull, and repetitive work.
How is Roots Automation different?
Our bots, just like humans, have the ability to make inferences. They can read things and then make inferences about how that information might relate or apply to work they’re about to do. Bots run on our Azure environment, so they’ll actually VPN into your business much like your own employees do when they work from home. Our customers don’t need to spend any money on technology or make any changes to their technology. We’re making this a zero-integration solution that’s as seamless as possible. We’re building bots that have the best qualities of a bot, but also bring forward the best qualities of a human – the ability to learn, to communicate, to adjust to an environment as it’s changing, and to anticipate what we as humans will want of it. That’s really what makes us so different.
What market does Roots Automation target and how big is it?
We particularly target the Insurance, Healthcare, and Financial Services industries currently but we’re capable of helping every industry and every business. Our platform is fully customizable.
What’s your business model?
We offer T-shirt pricing on our Digital Coworkers – Small, Medium, Large – based on the complexity of the job they are asked to perform. Most back-office finance jobs like a Payables Clerk fall into the small category, where a Claims Adjuster Digital Coworker might cost a bit more.
How has COVID-19 impacted the business?
We’ve been seeing more interest from companies that traditionally outsource work to other countries. These types of businesses are interested in implementing bots because if there is another lockdown or strict restrictions because of COVID-19, they want to be able to rely on their workers. Unfortunately, in this case, they can’t rely on international workers to “show up to the office,” so bots are giving them the security and reassurance that they need during a time like this.
What was the funding process like?
As first-time entrepreneurs, my cofounder and I were learning each day. How you connect with and speak about your company to a prospective investor, and what they care about as they get to know you is worlds apart from the nurturing you do with a prospective customer. The biggest lesson: as a startup founder in the seed stage, investors are betting on you (not simply a great product and vision). As such, you have power and position in the conversation.
By the way, a piece of very tactical advice – if we continue to fundraise using Zoom, make sure you have good lighting and sound and make sure you always use your webcam. Also, give extra time to introduce yourself and spend time getting to know the investors.
What are the biggest challenges that you faced while raising capital?
Raising during the early days of COVID was interesting. VCs were trying to understand the type of support their existing portfolio companies needed, while also figuring out what would succeed in this new environment. So, you were never quite sure how much capital they really intended to deploy to new investments.
What factors about your business led your investors to write the check?
The typical hallmarks apply here. Traction, vision, recognizing some of our client logos. However, I believe the thing that really sold them was that our customers were “raving fans.” They talked about loving the experience with our Digital Coworkers and shared that they were already in talks to buy more of them. There is no better churn than negative churn!
What are the milestones you plan to achieve in the next six months?
With the capital infused into Roots Automation, we can accelerate the development of our proven cognitive process automation technology called Digital Coworkers. A great deal of the investment will also lend itself to rapid customer acquisition across Financial Services, Insurance, and Healthcare verticals.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
I suppose this is an exercise in understanding opportunity cost. It’s cliche, but the engine of your company is sales. It provides proof points on product/market fit, it gives prospective investors confidence in your product and your ability to sell, and ultimately it gives you another day to keep building your awesome product. All things being true, don’t shortchange your sales and marketing efforts to keep building the perfect product. Your customer might be quite happy with your “good enough” because it’s still better than what they have.
All things being true, don’t shortchange your sales and marketing efforts to keep building the perfect product. Your customer might be quite happy with your “good enough” because it’s still better than what they have.
Where do you see the company going now over the near term?
We anticipate that we’ll be leading the way in Digital Coworkers as a Service and providing pre-trained bots that use Cognitive Process Automation to improve business efficiencies, processes, and support growth for the Insurance, Healthcare, and Financial Services industries. We’re focusing on creating the most capable, seamless, and enjoyable, digital workforce for global enterprises.
What’s your favorite outdoor dining restaurant in NYC?
Outdoors, I’d recommend Colonie in Brooklyn Heights or Glasserie in Greenpoint. Indoors, Aska in Williamsburg is great. Can you tell I live in Brooklyn?!
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