Indonesia’s Kata.ai raises US$3.5mil in Series A round

By Digital News Asia August 29, 2017

Round was led by Taiwan’s Trans-Pacific Technology Fund
Will expand offerings and penetrate new markets, starting with SEA and Taiwan

Indonesia’s Kata.ai raises US$3.5mil in Series A round

JAKARTA-based Kata.ai – a technology startup that utilises Artificial Intelligence (AI) to strengthen consumer engagement for brands – announced that it has raised US$3.5 million (RM14.92 million) in a series A round of funding.

The round was led by the Trans-Pacific Technology Fund (TPTF) operating out of Taiwan and joined by Indonesia-based Telkom Group’s MDI Ventures, Korean-based Access Ventures, and Convergence Ventures.

The group also included VPG Asia, Red Sails Investment, and prominent angel investor Eddy Chan. As part of the deal, Barry Lee, a principal of TPTF, has joined Kata.ai’s board of directors.

Kata.ai will allocate the fresh capital to its research and development arm in the hopes of capturing more of the Indonesian market while simultaneously extending its offerings.

Kata.ai will further develop its Natural Language Processing (NLP) technology with an agenda of making it able to understand and operate in multiple other Southeast Asian languages, in addition to Bahasa Indonesia.

Initially known as YesBoss, the firm began building NLP technology with the aim of furnishing Indonesian consumers with virtual assistants on their mobile phones.

The company took on a new form, however, and rebranded, becoming the AI startup locals know today at Kata.ai. This happened when the co-founders realised the strong demand and broad application of its proprietary technology.

In Indonesia, Kata.ai implements its AI tech into chatbots. According to the startup, the reason for this is that, culturally speaking, Indonesians prefer to chat with a company representative if they have questions or problems about a product or service.

On average, 4.2 messaging apps are installed on any given smartphone in the archipelago, where 97% of people use messaging apps multiple times a day. Popular chat app LINE currently has more than 1.6 million official LINE@ social sellers in Indonesia.

Recently, Kata.ai partnered with Unilever to create a chatbot in LINE named Jemma, a virtual assistant who liaises with customers on behalf of Unilever.

The chatbot has significantly increased the brand’s user engagement, as Jemma has managed to befriend more than 1.4 million LINE users with average chat session lasting around four minutes. One of the longest chat sessions lasted for two hours.

Within the span of eight months, the total number of people who engage with chatbots built by Kata.ai has reached six million.

In line with this success, Kata.ai has also been able to penetrate other sectors with its chatbots. It is currently working to adapt its technology for leading businesses in the telecommunications, consulting, banking, and retail industries.

The firm is partnering with Accenture to build a chatbot named Veronika for Telkomsel, an AI-powered virtual assistant designed to help users top up their prepaid phone credit, purchase data packages, book appointments at the nearest GraPari store, and more.

But Kata.ai does not only provide services for businesses to strengthen customer engagement. It also aims to scale up by developing a cutting-edge technology that it’s calling Bot Studio Platform, a web-based software for developers who want to build their own chatbots using the same NLP technology created by Kata.ai.

Bot Studio Platform aims to serve the growing demands of regional companies and even governments. The beta version of Kata.ai’s Bot Studio Platform is currently being opened up to select partners, one of them is Accenture.

“We are very excited about the investment in Kata.ai. Through our due diligence, we learned that the applications for AI in Indonesia's fast-growing economy could be tremendous. Kata.ai's NLP platform allows businesses to engage with customers efficiently, especially in a chat-based culture,” says Lee.

Kata.ai aims to soon expand its business overseas. With help from TPTF, Kata.ai will establish a wholly-owned subsidiary in Taiwan and collaborate with tech startups to serve the local market. The firm is also in talks with potential strategic partners throughout region.

“Kata.ai has shown, time and again, that it has the ability to create value for its clients. It does this through higher customer engagement, increased conversion rates, and larger savings. The flexibility of Kata.ai's technology to adopt a new language also allows for quick expansion into different countries. Leveraging TPTF's international network and technology capabilities, we aim to expand Kata.ai's business outside of Indonesia,” says Lee.

Under CEO Irzan Raditya’s guidance, Kata.ai has generated a 30x revenue growth within a year’s time.

“We are extremely impressed by Kata.ai's management team. They show great passion and technical acumen in the AI industry. Their ability to monetise the platform while addressing multiple industry verticals has positioned the company for exponential growth. Even though it is a young startup, we believe Kata.ai is already the industry leader for NLP in Indonesia,” adds Lee.

“We believe that Indonesia – and Southeast Asia as a whole – is the perfect market for chatbots. By looking at the mobile and messaging penetration rates, as well as market behaviour, the region shows more promise than anywhere else in the world,” explains Raditya.

“We want to pave the way to a future of understanding through conversations. We are firm believers that AI is here to make people more advanced so they can do more meaningful work and eventually improve the overall quality of life. Chatbots are only the tip of the iceberg. Kata.ai exists to revolutionise all conversations.”