Snap Acquires Voca.ai: AI Voice Agents for Call Centers
Snapchat has become a leading application among consumers, known for its entertaining filters and the ability to share ephemeral messages with friends, particularly attracting a younger demographic. However, Snap Inc., the parent company, may be exploring opportunities to utilize its substantial user base – currently 249 million daily active users – by expanding into services tailored for businesses.
TechCrunch has reported and verified that Snap is acquiring Voca.ai, a company specializing in the development of AI-powered voice assistants for customer support, for a reported $70 million. Initial reports suggested a price of $120 million, comprised of $70 million in cash and $50 million in stock, but updated information from a reliable source indicates a total value of $70 million. Further investigation into the exact details of the deal is ongoing.
Voca.ai highlights that “7 out of 10 customers still prefer speaking with a representative.” Their platform delivers conversations that sound natural and human-like, often leaving users unsure whether they are interacting with a virtual or a live agent. The system functions as an initial point of contact, efficiently addressing straightforward inquiries before seamlessly transferring more complex issues to human agents.
A Snap spokesperson has not provided a comment regarding this acquisition, and attempts to reach Voca.ai’s founders, Einav Itamar and Alan Bekker, have been unsuccessful. Nevertheless, the acquisition price and terms have been confirmed by multiple sources familiar with the transaction.
The transaction was initially reported by the Israeli publication Calcalist.
The entire 40-person team from Voca.ai will be joining Snap as part of the acquisition.
Founded in Israel, with additional offices in New York, Voca.ai had previously secured approximately $6 million in funding, including a strategic investment from American Express Ventures in October 2019. Additional investors include lool ventures and Flint Capital.
Notably, the startup already serves a significant customer base and claims to facilitate “millions of conversations.” In October of the previous year, the company was processing around 2 million calls and conversations monthly, serving industries such as banking, telecommunications, insurance, and legal services. Their clientele includes Toshiba, Amdocs, FirstClass Capital, and Boost Health Insurance, among others.
Industry observers are currently assessing Snap’s intentions for Voca.ai, but several potential avenues are being considered.
Firstly, there is the possibility of a move into enterprise or business services. This acquisition arrives at a particularly opportune moment. All virtual service providers have experienced increased activity this year, as the pandemic and public health guidelines encouraging social distancing have led to a surge in online business interactions.
This trend is prompting companies that develop consumer-focused technology applications to broaden their offerings and position their platforms as unique solutions for businesses to connect with customers – not only for marketing purposes but also for handling inquiries and potentially facilitating sales. Facebook serves as a prime example, having expanded the capabilities of Messenger, WhatsApp, and Instagram to cater to business needs.
The company achieved a 52% increase in revenue last quarter (Q3), with $679 million generated from business operations. Therefore, it is a logical step for Snap to explore the development of additional business services within Snapchat and diversify its revenue streams.
On its business services webpage, the company states that “People use Snapchat to connect with friends, nurture relationships, enjoy entertainment, and learn. Inspire action with immersive, full-screen ads that enhance brand awareness, drive conversions, and deliver tangible results for businesses of all sizes.” Extending these business objectives to include “drive conversations” is a natural progression.
Voca.ai’s platform is particularly well-suited to the current market conditions. The onset of the COVID-19 pandemic resulted in businesses being quickly overwhelmed with customer requests across all channels, and they have since been seeking cost-effective solutions to manage these significantly increased volumes of inbound calls and inquiries. Voca.ai is among the startups providing such solutions, leveraging AI-based voice bots to augment existing customer service teams.
Secondly, Snap might be interested in Voca.ai to enhance the interactions for its own users. The company has been developing hardware, specifically its Spectacles, which incorporate AR filters into the user’s field of vision and enable the capture and sharing of photos and videos on Snapchat – an interactive, wearable device created by Snap.
Integrating a more sophisticated voice command interface, and a platform capable of managing a wider range of experiences, could represent another application for Voca.ai’s technology. (It should be noted that voice interfaces for Spectacles are not mutually exclusive from Voca’s existing work, and ultimately highlight the potential of voice interfaces to improve all types of interactions in the future.)
However, if Spectacles are the primary focus for Voca.ai, it is likely to be a long-term endeavor. Spectacles are currently in their third generation (as of November 2019), but they are not a central focus for the company. Snap did not mention hardware, glasses, or Spectacles even once in its most recent earnings report, and it has been several years since the company last released sales figures for the glasses, following their launch in 2017 and a subsequent write-down of approximately $40 million due to lower-than-expected sales.
Whatever the future holds for the Voca team, this acquisition appears to be a strategic and insightful move for Snap.
Snap has made several acquisitions to secure intellectual property in the field of artificial intelligence, with a significant focus on computer vision to create photo and video filters and other augmented reality applications for Snapchat and Spectacles. These acquisitions include Looksery, AI Factory, and Cimagine, another startup based in Israel. This latest acquisition demonstrates that, despite its emphasis on visual content, voice technology also holds importance for the company.
Updated with additional price details and further insights into potential applications of voice services by Snap.