Conversational Generative AI Startup Rasa Raises $30M

Conversational generative AI startup Rasa has closed a $30 million Series C funding round co-led by StepStone Group and PayPal Ventures, with participation from Andreessen Horowitz, Accel, and Basis Set Ventures. Rasa expanded its conversational assistant platform into generative AI last year to provide businesses with interactive AI powered by its Conversational AI with Language Models (CALM) system, which augments Large Language Models (LLMs) with more traditional natural language understanding.

Rasa Generative AI

Rasa describes its AI assistants as able to align with its customers’ business needs and interactions using CALM. The platform now includes Rasa Pro and Rasa Studio. Rasa Pro is what the company calls an “open-core conversational AI framework,” which creates te conversational assistants through a template framework using pre-built and tested tools that companies can tailor to fit their needs. Rasa Studio ups the customization options with a drag-and-drop setup for designing generative AI-fueled chatbots. The company claims that its open-source software has upwards of 50 million downloads.

“This investment accelerates our lead in the market, and fuels our drive to redefine what is possible for businesses using generative AI-powered chat and voice platforms at scale,” Rasa CEO Melissa Gordon said. “With our technology, we’re well-positioned to transform how businesses interact with their customers, making every conversation impactful and personal. We will use the funding to advance our technological leadership and strengthen our market presence.”

Demand for no-code generative AI development tools is rising as companies seek to leverage LLMs without deep technical skills. Rasa Studio targets this trend. Rasa counts several large financial, insurance, and hospitality brands as customers. its chatbots are used for looking up bank balances and sending money, managing technology for telecom customers, and explaining insurance arrangements.

“At Rasa we’ve reinvented how conversational AI works,” Rasa CTO Alan Nichol said. “While many in the industry claim to incorporate generative AI, often it’s merely an addition of LLMs onto their existing platforms.”

The new funding brings Rasa’s total raise since 2016 to about $70 million. Rasa last raised $26 million back in 2020. Notably, PayPal Ventures is part of this funding round, a first for the venture firm as it launches an AI Fund for that purpose.

“We are thrilled to mark the launch of our AI Fund with our investment in Rasa,” PayPal Ventures partner Alan Du said. “We believe Rasa offers a best-in-class platform for enterprises to develop robust, conversational AI, and we have seen how its concierge solutions improve customer engagement and business performance.”

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