The conversational AI space will be one key area of the communications industry to keep an eye on in 2022 and beyond.
This week, conversational AI vendor Uniphore announced a massive series E funding round of $400 million at a valuation of $2.5 billion, bringing its total funding to $610 million. This is, by far, the largest round of funding for the company. In its press release, the company stated it would use the money to “extend Uniphore’s technology and market leadership with advancements in voice AI, computer vision and tonal emotion, as well as to expand its business operations globally, specifically in North America, Europe and Asia Pacific.”
The geographic expansion makes sense, given customer experience trends are global. The rest of the statement is somewhat vague, but I’m guessing that we should expect to see Uniphore step on the sales and marketing gas and use its big bucket of cash to acquire a company or two to add to its conversational AI platform.
This round of funding also supports my thesis that conversational AI needs to be redefined, which I discussed in this No Jitter post. The valuation Uniphore was given is a clear indicator that investors are looking at the market more broadly than conversational AI for chatbots, as that market size is likely barely a couple of billion.
Last year, Uniphore acquired Emotion Research Labs (ERL) to bring emotion detection into its portfolio. As part of my research in writing that post, I interviewed long-time industry thought leader and early Uniphore investor John Chambers of JC2 Ventures. “Companies do not want individual AI silos,” he stated. “They want to share common information, common learnings, and act on the outcomes.” That statement was certainly in line with my post earlier this month.
One data sciences axiom states: “Good data leads to good insight.” It’s also well understood that the opposite is true — bad data leads to bad insights. What’s often overlooked is that silos of data lead to incomplete insights or ones that need to be correlated to have the best data to make a business decision. Consider an omnichannel contact center where a customer is interacting over multiple channels. AI done solely on a chatbot might only see positive information as a customer may always turn to a phone call for difficult situations. Ideally, the company would want a complete view of all interactions, but that requires a single source of truth with an AI platform that can analyze it, which is what Uniphore is trying to build.
Another interesting move by Uniphore was the acquisition of Jacada, which brought the low-code/no-code arrows into the companies quiver of capabilities. Historically, working with AI required a significant amount of developer support, but businesses don’t always have the time or resources to get into a long developer-led project. The concept of “composable communications” has gained significant momentum and is a key theme at the upcoming Enterprise Connect 2022 show. In fact, I’m doing a panel on this topic on the morning of Monday, March 21.
As has been well documented on this site and others, composability is about more than CPaaS and APIs. It’s also the ability for line-of-business professionals with little to no coding background to create custom experiences via low-code/no-code tools, and Jacada brings that to the Uniphore platform. Through Jacada, customers can generate interactive flows to automate processes. It also has post-call workflow automation to improve agent and customer interactions. For example, if an agent makes follow-up promises to the customer, these can be logged automatically, reducing the number of dropped balls.
Businesses looking at conversational AI must understand the scope of the technology. While it certainly makes chatbots better, that’s just a small part of what’s possible. Customer experience is now the top-brand differentiator, and companies that nail conversational AI will sustain market leadership. Those that don’t will struggle to compete. Conversations need to be thought of holistically — chat, voice, and video tied together with emotion AI and automation capabilities.
Uniphore’s $400 million round of funding is validation that investors believe in the direction of the company, but a bigger story is unfolding here. We are on the verge of seeing the conversational AI industry explode. Uniphore is a good company with strong leaders, but I see this funding more as validation that the industry is changing. Investors will favor platform vendors versus one-off product companies, and Uniphore currently has the pole position. I believe it’s currently the only vendor that addresses all the elements I laid out above and can apply to contact centers and other enterprise functions such as sales and marketing.
Currently, over 20 vendors are in the Gartner MQ, not including Uniphore, NVIDIA, Cisco, and other companies working in this area. Most of those companies are niche vendors that do one thing well and will be acquisition fodder as conversational AI shifts to a platform. This is going to be one of the hot areas to follow in communications in 2022 and beyond.