AI-Powered Transcription Startup Otter Raises $50M
Transcription AI startup Otter.ai has closed a $50 million Series B funding round led by Spectrum Equity, a major indicator of the importance of these services Otter is planning major expansion over the next year and will apply the funding to improving its technology and expanding its customer base.
Otter was founded five years ago as AISense, and launched the Otter platform in 2018, renaming itself for its product. The AI’s ability to discern both who is speaking and what they are saying drew interest from clients and investors. The startup has now raised $73 million, with its previous funding a $10 million round led by Japanese mobile operator NTT DOCOMO. That funding was linked to a pilot program teaching online English classes in Japan, using the transcription as a study guide for students instead of going through audio recordings only. The company serves both enterprise and consumer customers now, with Zoom and Dropbox on its client list.
Most recently, Otter integrated with Google Meet to transcribe conversations on that platform. The biggest difference between what Otter does for Zoom and what it does for Google Meet is that the Google Meet service is free to users while you have to pay to sign up to use Otter with Zoom. 2020 was huge for the company’s financials, with revenue jumping 800% and the company’s tech is used in 230 countries. All together, Otter has transcribed more than three billion minutes in more than 100 million meetings.
Transcribing voice into text is a vital part of the voice tech industry and one whose value is growing. But, $50 million outs Otter well ahead of startup rivals like Fireflies.ai, which closed a $5 million funding round at the end of 2019, and Voicea, which has raised $20 million for its own meeting transcription AI assistant before being acquired by Cisco in September 2019. Enterprise services from Microsoft and Google are also starting to bring transcription into the forefront of their services. Demand for more and better tech around video meetings was on the rise before COVID-19, but there’s no denying the still rising surge in the market since the pandemic began. It’s clear that turning words into text, intelligently is only going to raise the value of tech like Otter’s.
“Over the past year, the world as we know it has inexorably changed by meeting and interacting online; and even after the pandemic is long behind us, our living, learning, and working online will persist,” Otter CEO Sam Liang said in a statement. “This new mode of online interaction, however, has exposed an existing chasm between our need for meetings and the lack of their effectiveness. Otter.ai’s vision is to create more effective meeting spaces through advances in AI and ML, and we are thrilled to leverage Spectrum Equity’s experience in scaling product-driven growth companies. We are proud to have a thoughtful group of investors and advisors providing us with guidance to achieve our vision and growth ambitions.”