Editor’s Note: This story first appeared in the Austin Business Journal. It’s presented here in an abbreviated format. To see the original post in its entirety, click here.
ConverseNow Technologies Inc., an Austin startup that uses artificial intelligence to help restaurants automate and personalize customer orders, has closed a $3.25 million seed funding round.
Austin-based Bala Investments led the round. Others investing were Austin-based LiveOak Venture Partners, Tensility Venture Partners, Knoll Ventures, 2048 Ventures, Bridge Investments and Ken Neeld, CEO of Delphi Display Systems. Bala Investments Managing Director Rajiv Bala has joined the ConverseNow board of directors.
The capital will be used to improve the company’s technology, increase sales and acquire customers, ConverseNow co-founder and CEO Vinay Shukla said in a statement.
Shukla and Rahul Aggarwal, who is ConverseNow's chief operating officer, co-founded the startup in May 2018. The repeat entrepreneurs previously launched Endeavor Software, which they sold to New York-headquartered Genpact in 2016 for an undisclosed price.
The co-founders recognized a market opportunity presented by shifts in consumer behavior due to the Covid-19 pandemic. With social distancing now the norm, restaurant customers have migrated from dining in to options such as delivery, takeout, curbside pickup and drive-thru.
And restaurant managers now seek to maximize “contactless” interactions with their customers to protect their own workers, as well as diners.
Restaurants have been using ConverseNow’s AI platform since November, Shukla said in an email. The startup’s two customers have enjoyed an increase in ticket order sizes of up to roughly 25%, he said. One of those customers is Fazoli’s Restaurant Management LLC, a chain of fast-casual Italian eateries.
Wayne Pederson, Fazoli's chief information officer, said in a statement: “We found ConverseNow’s technology to be a perfect fit to address our requirements without compromising on the guest experience.”
Pederson also predicted that AI will become commonplace “in restaurant technology” as industry executives seek “to balance the shift to off-premise and drive-through.”
ConverseNow is adding eight to 10 locations each month, with average monthly revenue around $20,000 to $30,000, Shukla said. The team aims to make ConverseNow profitable by the end of 2020, he said.
“Understanding user intent and emotional quotient is the key to driving great customer experiences, order closures and upsell revenue,” Aggarwal said in a statement. “ConverseNow’s platform uses highly nuanced speech technology and custom AI [and machine-learning] models to continuously learn from customer ordering behavior to drive end-to-end customer conversations.”
ConverseNow currently employs 24 and is hiring, Shukla said. The company is looking to add a chief technology officer, voice user interface designer and a subject matter expert who has restaurant-tech experience, among other positions. It is currently based out of Capital Factory but the CEO said he is looking for downtown Austin office space. He declined to identify the company's commercial real estate broker.
