SoundHound Raises $100M in Strategic Financing
SoundHound has closed $100 million in strategic funding from Atlas Credit Partners as part of a new $125 million loan facility. The publicly traded conversational AI company is using the money to refinance its debt and provide more capital for its long-term strategy, including its recent forays into generative AI.
SoundHound is using the new cash to create a better loan structure, replacing its existing $30 million debt and pushing back the maturity date to 2027. The company said it plans to widen its subscription business with its customer service and other AI products. SoundHound’s experiments with generative AI recently led to the release of a new generative AI voice assistant platform and mobile app called SoundHound Chat AI. The platform uses SoundHound’s voice AI and third-party large language models like OpenAI’s GPT-4 for commercial uses, while the mobile apps offer consumers a voice assistant with conversational abilities similar to ChatGPT.
The idea is to offer brands a way to build or augment a multi-modal voice assistant with generative AI models using SoundHound’s new Conversational AI Language (CaiLAN) and Conversational AI Network (CaiNet) systems. CaiLAN creates the knowledge domains of local and changeable information used by the voice assistant, such as nearby businesses, traffic, and weather. Meanwhile, CaiLAN judges what databases should be accessed to answer user queries and sets up the pipeline to provide the answer when it’s generated. SoundHound had already begun embedding these systems into its restaurant and automotive platforms earlier this year, adding generative AI options to its Dynamic Interaction voice AI for business services.
SoundHound previously predicted it would reach profitability at the beginning of the year. The company then raised $25 million in equity financing in January from undisclosed investors after reducing staff from around 450 to 200 people in two rounds of layoffs but has continually beat stock analyst expectations each quarter. The new funding may also help make SoundHound more attractive to potential buyers, as Voicebot founder Bret Kinsella has pointed out.
“A large telecom provider or device maker would be ideal acquirers… All of the big tech companies have their own voice assistant, so acquiring SoundHound may seem redundant,” Kinsella said back in January. “However, at the current valuation, there may be interest solely based on SoundHound’s portfolio of more than 200 patents. Some companies may want the patents while others may want to ensure SoundHound’s patents don’t wind up in the hands of a competitor.”