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Venture Capital News: SoundHound Inks $75M

SANTA CLARA, CA, SoundHound, a search technology company, raised $75 million in Series D funding.
According to Techcrunch, SoundHound is adding even more cash to that pile, nearly doubling the amount already raised with a $75 million round including strategic investors like NVIDIA and Samsung Catalyst Fund, among others. SoundHound has been downloaded more than 300 million times, and while the company started as just an app to detect what music was playing, CEO Keyvan Mohajer's ambitions have since shifted to building a massive conversational AI platform much like what Amazon is hoping to do with Alexa.

The company launched Hound, its voice-powered assistance for the iPhone and Android, in March last year. The app was the culmination of around 10 years of research and development, Mohajer said. That not only made the app competitive with products like Google Assistant and Siri, but also insulated it from potential challenges of other startups emerging and trying to chew into its opportunities.

SoundHound's goal was to build a voice-based AI that can understand increasingly complex queries, making questions more and more specific. Hound users, instead of asking questions with follow-ups, have since begun asking longer and longer questions as a result of the app's gear toward being able to understand multiple data points within a query, Mohajer said.

Since the launch of Hound, however, the whole ecosystem around conversational user interfaces has exploded. At CES, we saw tons of products that were powered by Alexa, Amazon's voice assistant -- so far that the AI was even built into a fridge. So while SoundHound's app has been able to build a competitive product with Google Assistant and Siri, this year we also saw Alexa not only carve out a big place in homes but also begin embedding itself into a myriad of new products.

But with all these major companies trying to build platforms that developers will tap into in their portfolio of products, some AI-driven companies have found themselves looking to be a more neutral party. Clarifai, for example, wants to create a visual search platform that businesses can plug into their existing products while Pinterest and Google invest heavily -- but for their own products.

'The other advantage we have is that we don't have a hidden agenda to hijack your products,' Mohajer said. 'When Amazon says, 'dear Samsung, put Alexa in your product,' then as Samsung I work so hard to create a brand and product but I have to ask my users to log into Amazon accounts. All that data goes to Amazon and there's no difference between a Samsung and LG device. I can't differentiate any more.'

Mohajer said since the launch of Houndify, the company's service has been baked into more than 500 distinct products with more than 20,000 partners. Those products range from cars, robots and appliances. But while Mohajer is hoping that its conversational AI will be baked into as many products as possible, the company hopes to use the same kinds of AI patterns its built to expand into other media like text and images.

With the financing, the company is hoping to invest heavily in what it calls 'collective AI.' That allows developers to tap into other domains that are already out there. For example, if a developer built a tool for searching for restaurants through Yelp or some other integration, it could tap into already-existing domains like getting specific locations and also summoning a car to get there. Those to developers, by extension, are able to tap into the tools already built by others, hopefully producing a compounding effect, Mohajer said.

Here's the full list of investors: NVIDIA, Samsung Catalyst Fund, Nomura Holdings, Inc., Sompo Japan Nipponkoa Insurance Inc., RSI Fund (the VC arm of Recruit Holdings), Kleiner Perkins, SharesPost 100 Fund, MKaNN, joining previous investors Global Catalyst Partners, Walden Venture Capital, and Translink Capital Partners.
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