SoundHound Closes $100 Million Funding Round From Strategic Investors Including Daimler, Hyundai and Tencent
SoundHound Inc announced this morning that it has raised $100 million in new funding bringing total company financing to $215 million. The new funding arrives less than 15 months after the company secured $75 million in February 2017. Strategic investors are prominent in the funding announcement including Daimler, Hyundai, Tencent, Midea and Orange. Previous investors also participated in the round including Samsung Catalyst, NVIDIA, KT Corporation, HTC, LINE, and Nomura.
The breadth of strategic investors suggests that SoundHound’s Hound voice assistant is about to have widespread distribution within a variety of custom voice apps. Very few strategic investors will take a position in a company that it doesn’t plan to utilize directly. Second, the timing of such a large investment round less than 15 months after a previous round indicates that SoundHound must be getting marketplace traction. Otherwise, back-to-back rounds in a tight window would be unexpected. SoundHound co-founder and CEO Keyvan Mohajer commented in an interview with Voicebot:
It’s a big amount, $100 million. What makes it more important is that all of that funding came from strategic investors, not traditional VCs. These are companies that already have a lot of users and successful products. And, in addition to the resources that the funding brings to our company, it also creates an alliance with these companies, that could help the adoption of our platform. These companies together reach about 2 billion users per year.
Funding Vertical and Geographic Expansion
The company plans to use the new funds to further enhance the Houndify voice assistant and Collective AI platform across verticals including automotive, Internet of Things, consumer products, and others. According to the media announcement, “the funding will also accelerate global expansion, including new offices in China, France and Germany, in addition to furthering momentum in the US, Japan, and South Korea.” Sajjad Khan, vice president of digital vehicle & mobility at Daimler AG commented:
“We believe that connectivity in vehicles will become a part of everyday life in the near future and it will soon be possible to control entertainment, navigation and real-time driving information by voice command. Houndify provides a solution to make these interactions natural, fast and accurate — critical components for allowing drivers to concentrate fully on the road.”
Luc Bretones, SVP Technocentre and Orange Fab, also had an interesting comment that appears to relate to that company’s previously announce Djingo voice assistant.
With the rapid adoption of voice-enabled human-machine interfaces, Orange is committed to improving customer experience by offering end users the most advanced Speech-to-Meaning capability in our upcoming AI-powered virtual assistant
Speech-to-meaning is one of the core Hound voice AI features and referencing that technology along with the “upcoming AI-powered virtual assistant,” suggests that Hound will be the technology engine behind Djingo.
Hyundai’s funding participation comes after debuting the Hound voice assistant in the company’s cars at CES 2018. The addition of Daimler and other announcements that indicate Kia may also be on board show that SoundHound is gaining traction in automotive. That doesn’t mean that Amazon Alexa and Google Assistant will be kept out of these auto platforms altogether, but it does mean the manufacturers are looking at Hound as an alternative for core voice interaction capability inside the vehicle. This is a direct challenge to Nuance and its Dragon Drive offering that was also displayed at CES earlier this year.
The addition of Tencent and Midea, the Chinese digital entertainment and appliance giants respectively, suggests SoundHound has a clear path to establish a footprint in the world’s large voice assistant market. This complements earlier investments by some of the largest companies in Korea and Japan. SoundHound clearly has a global strategy from the start and earlier this year formed a partnership with the Acapela Group that expanded Hound’s response capabilities to 32 languages.
Enabling Brands to Own the Voice User Experience
A key value proposition offered by the Hound voice assistant is that big brands are not required to cede the customer interaction entirely to Amazon or Google. Hound is an independent voice platform developer that allows its customers to own their data and user experience. While many of SoundHound’s strategic investors will certainly build Alexa skills, Google Assistant apps and support Android Auto in order to serve consumers, Hound also enables them to create customized voice experiences for their customers. The $100 million in new funding and current market momentum positions SoundHound to become the independent rival to Amazon, Google and Apple in the voice assistant arena. This market is just getting started and Hound may soon be the viewed as the key alternative to the big tech platforms when it comes to voice.