SoundHound Will Go Public in $2B SPAC Merger
Voice AI mainstay SoundHound will go public on Nasdaq after merging with special purpose acquisition company (SPAC) Archimedes Tech SPAC Partners Co. in a deal valuing SoundHound at $2.1 billion. The company will operate as SoundHound AI, Inc. and will be listed as SOUN on the exchange.
SoundHound is best known for its Houndify platform, which provides some or all of the voice AI services for companies worldwide. Cars built by Hyundai and Kia, White Castle restaurants, streaming services like Pandora, and social media apps like Snapchat all rely on Houndify to provide voice interactions. Houndify supports an automatic speech recognition (ASR) and natural language understanding (NLU) engine to converse with users and respond appropriately. Houndify’s popularity has grown out of its ability to mimic human conversation. It supports voice assistants capable of understanding complicated requests using casual vocabulary, even when there are multiple commands in a single sentence.
The rapid adoption of voice AI in more contexts and enterprises encouraged SoundHound to sign with Archimedes. SoundHound claims more than 100 million queries are made to its systems every month and doubled in the first half of this year. The deal announced this week is expected to close in the first quarter of next year and provide as much as $244 million in gross proceeds.
“Our long-term vision is to build tech that brings voice AI in-house,” SoundHound CEO Keyvan Mohajer told Voicebot in an interview. “There are very few companies that have that asset in-house. The resources will help us accelerate our roadmap and add languages and features.”
“SPACS are not for everyone but are a very good solution for certain companies, and we are one of them,” Mohajer said. “We have proven technology, proven adoption, and a proven business model so we are a good target for a SPAC. A traditional IPO might be a couple of years away, otherwise. There are a lot of SPACs out there but we are very happy with the one we chose and who chose us. They have lots of successful companies and individuals who have done SPACs before. They’re not rushing to a new trend”
SPACS are becoming a popular way for a startup to raise money and go public without going through the standard IPO model. The organization raises the money based on who is involved before finding a company to merge with and take public. Archimedes raised $133 million in March with plans to find a tech company to bring to the stock market. Archimedes and SoundHound reached an agreement afterward, which includes turning existing SoundHound equity into SoundHound AI equity. The current leadership at SoundHound will stay in place and leverage the new money to keep expanding and developing new ideas. Going public won’t change that, Mohajer said.
“We’ve been at this a long time. My co-founders and I went from kids in a dorm room to a public company,” Mohajer said. “What will not change is we will constantly innovate, that’s in our DNA. We’re attracted to problems and solving them.”