Artisan AI Raises $25M to Build AI Agents - Still Hiring Humans

Artisan Secures $25 Million Series A Funding

Jaspar Carmichael-Jack, the 23-year-old founder and CEO of AI sales agent startup Artisan, has navigated a challenging yet successful year for his company.

Artisan has recently completed a $25 million Series A funding round, with Glade Brook Capital leading the investment. This information was shared exclusively with TechCrunch by Carmichael-Jack.

Previous Funding and Growth

The company was a standout participant in the winter 2024 Y Combinator class, securing $12 million in September. This made it one of the largest funding rounds within that cohort.

Throughout the past year, Carmichael-Jack and his co-founder, Sam Stallings, a former IBM product manager aged 30, have managed the typical complexities of an early-stage startup.

Navigating the AI SDR Market

Artisan operates within the rapidly expanding AI sales development representative (AI SDR) market, alongside numerous other fast-growing companies.

The startup gained significant attention through its provocative “Stop Hiring Humans” marketing campaign. This campaign sparked considerable media coverage, social media engagement, and even elicited some negative reactions, according to the company.

April Fool's and Clarification on AI's Role

In a notable publicity stunt on April 1st, Carmichael-Jack jokingly announced his “resignation,” claiming he would be replaced by an “AI CEO.” He remains the CEO of Artisan.

When questioned about the potential for AI to replace human workers, Carmichael-Jack clarified his position. He stated, “No, which is ironic, because we did the billboards that said, ‘stop hiring humans’ but that was mostly just for attention.”

The Value of Human Labor and New Hires

Carmichael-Jack emphasized that human labor actually increases in value when complemented by AI-generated content.

Currently, Artisan employs 35 individuals and is actively seeking to expand its team by an additional 22 positions, particularly within the sales department. The company has also recently appointed Ming Li as its new CTO, bringing experience from Deel, Rippling, TikTok, and Google.

Customer Attrition at Artisan

Acknowledging the challenges inherent in the AI SDR landscape, Carmichael-Jack concedes that Artisan, like its competitors, has experienced instances of customer departures.

The application of AI agents to entry-level sales, specifically automating cold email outreach, appears logical. However, this sector remains nascent and has garnered a perception of delivering underwhelming results.

Early iterations of AI SDRs typically yielded “low response rates” and exhibited “relatively high churn” among users, according to Carmichael-Jack. He expresses considerable discomfort recalling the quality of email drafts produced by Artisan’s initial YC-era offering, citing frequent “hallucinations” upon its launch.

Over the preceding year, Artisan asserts significant improvements in this area. Their primary product, Ava, now reportedly experiences hallucinations in approximately one out of 10,000 emails, or even less frequently. This enhancement stems from close collaboration with Anthropic, the model provider, and the implementation of more constrained prompts.

Information is inputted into Ava through a structured form, utilizing a rigid prompt system designed to minimize the potential for inaccuracies, as it is directly supplied with all necessary data, Carmichael-Jack explains.

Carmichael-Jack states that Ava’s enhanced performance has enabled Artisan to secure 250 clients and achieve $5 million in annual recurring revenue.

Currently, Artisan is developing two additional AI agent products: Aaron, designed for managing inbound communications, and Aria, an assistant for scheduling and managing meetings. Both are slated for release by the close of 2025.

Selective Client Acquisition

Carmichael-Jack shared insights from a challenging learning experience: AI SDRs are not universally suitable for all businesses. Certain industries, such as offshore development agencies, are now excluded from Artisan’s client base.

“Some customers simply won’t succeed” with agent-driven outbound sales, and Artisan is prepared to discontinue service to these clients. Similar to its competitors, Artisan provides contracts with break clauses, allowing for early termination.

“We have historically targeted an overly broad customer base, and have learned that, unlike typical SaaS products, a more rigorous qualification process is essential,” Carmichael-Jack notes.

Some clients fail to generate sufficient responses through Artisan’s agents, while others receive a high volume of low-quality leads, requiring excessive human effort to identify viable prospects. A response rate of approximately 1% is considered optimal, according to Carmichael-Jack.

Artisan, alongside other AI SDR providers, is refining its targeting strategies. Mirroring trends in the sales automation industry for over a decade, systems like Artisan and Actively AI are beginning to analyze and integrate signals from social media activity, funding announcements, and news coverage to improve prospect identification.

Artisan’s competitive advantage lies in its proprietary database of physical businesses. Furthermore, the company is addressing the industry’s reputation concerns by piloting a new, flexible “success-based pricing” model in collaboration with Paid.ai, a platform founded by Manny Medina, co-founder and former CEO of Outreach.

This allows customers to opt for per-response billing instead of committing to a long-term contract through Paid.ai.

“Our revenue should be directly correlated with the value we deliver to our customers,” Carmichael-Jack emphasizes. “If we cannot provide value, we should not charge a fee.”