Like many startup entrepreneurs, Umesh Sachdev and Ravi Saraogi didn’t have a successful first venture. Like most successful entrepreneurs, they responded with patience. And that made all the difference. This was back in 2006-07. The two computer science students, in their final year at the Jaypee Institute of Information Technology, Noida, drawn to the mobile security space, had had a eureka moment.
The duo had developed a telecom operator-agnostic product that could locate mobile phones within a specified region. They called their first-born Singularis Technologies, whose news they excitedly shared with known telecom evangelist Ashok Jhunjhunwala, a professor in the department of electrical engineering at the Indian Institute of Technology Madras (IIT-M).
Jhunjhunwala, who would eventually become their mentor, was immediately dismissive about the idea. “And our first reaction was, ‘What does he know?’ We have been working on the idea for two years,” says Sachdev. “But soon we realised what we had was a product, not a business.”
They filed that experience in the learnings box, relying on their good friend, patience, who didn’t let them down. A year later, they had ploughed, persevered, and measured their way to a potentially billion-dollar idea: Uniphore, a speech recognition solution-provider and an investor favourite. The Uniphore journey began at IIT-M’s Rural Technology and Business Incubator (RTBI), which the duo had joined, after graduation, as project associates. “The initial R&D and setting up of the platform and backend work for the startup was all done at the RTBI incubation centre. It took close to four quarters to build the product,” says Saraogi, 35, co-founder and president-APAC of Uniphore, which was formally incorporated in April 2008.
Also, experience had taught them the value of a clear vision. This time they knew who their customer was and the need they were fulfilling. Technology at the time, Sachdev says, demanded a knowledge of English from consumers to use a smartphone and browse the Internet. But only about 4% of India’s population was English literate, showed surveys. Text-based applications, in that context, were useless for the majority. They, therefore, created software tools that could communicate in multiple vernacular languages: A man-machine interface that would provide access to mobile services and content to India’s rural and non-English speaking population; through an application adaptable to basic feature phones and smartphones alike; using vernacular speech recognition and voice biometrics.
“We were very clear from the beginning that whatever business we started should have a massive people impact. You cannot create a successful company overnight. It has taken us 11 years to build Uniphore,” says Sachdev, 33, who is co-founder and CEO, Uniphore.
The potential of the idea convinced Jhunjhunwala to guide Uniphore during its formative years. Investors followed suit. In 2014, Uniphore caught the attention of leading angel investors including Nagaraja Prakasam, partner, Acumen, a non-profit global impact investment fund. In the following year, Infosys co-founder Kris Gopalakrishnan invested too. Later, in 2017, the founders impressed former Cisco CEO John Chambers who put in, in his personal capacity, an undisclosed amount in the Chennai-headquartered company. This was his first investment in an Indian startup.
“Uniphore first built their products for India, which is one of the hardest markets to build specific solutions for given the different languages and dialects that exist. After successfully rolling out in India, they were able to scale and bring their products to the world. Uniphore’s solutions can now recognise and respond to more than 100 global languages and multiple dialects,” Chambers told Fortune India in an email. “Their understanding of natural language processing and speech recognition married with artificial intelligence (AI) and automation is exceptional.”
In August 2019, Uniphore raised $51 million in its Series C funding, its largest round, led by March Capital Partners along with Chiratae Ventures (formerly IDG Ventures), Sistema Asia, CXO Fund, ITP Ventures, Iron Pillar, and the Patni family, among others. Uniphore has raised $67 million in funding till date, in a steady flow that indicates an inherent faith in the business. Particularly because of its ability and willingness to adapt to evolving demand.
In its early years, Uniphore primarily provided its speech recognition and voice biometrics technology to rural-focussed financial services companies and banks; they had to help their customers, with limited literacy levels, carry out transactions remotely. But a shift took place in 2014 when Uniphore raised its first institutional funding of about $1 million in a round led by Indian Angel Network (IAN) members: Prakasam, M.V. Subramanian along with YourNest Angel Fund and entrepreneur Ray Stata. The investors convinced the founders to tap into large businesses that have the capacity—and willingness—to pay more for high-end voice data analytics.
As a result, today, Uniphore caters only to large enterprises across markets and sectors such as e-commerce, cab-hailing services, telecom, airlines, and FMCG. Banking, financial services, and insurance (BFSI) clients contribute the largest chunk in terms of revenue (globally 40% of the business comes from BFSI.) Its client roster includes French banking group BNP Paribas; insurance companies PNB MetLife, Bajaj Allianz; Japanese IT firm NTT Data; FE Credit, one of Vietnam’s largest consumer finance companies; business process management firm Genpact; and financial services firm Motilal Oswal.
“These businesses invest millions of dollars in supporting their call centres. Any business which has a fairly large BPO setup is our client. Our proprietary conversational service automation platform, based on AI, machine learning, and speech technology, focusses on front office automation,” says Saraogi. Chambers points out that there is a $350-billion opportunity in the customer service industry. “Uniphore is uniquely placed to address a good portion of this opportunity, especially given their hyper-focus on customers and constant innovation in terms of bringing new solutions to the market,” he adds.
Uniphore’s product can decipher more than 100 global languages—this includes 17 from India—apart from multiple dialects. “Whenever we enter a new market we first have to develop the language and the dialect of that region. We can’t just open a new office and start selling,” says Saraogi. It follows that it was initially deployed only in client locations in India. Over the years, it has spread to the U.S., North America, Singapore, Vietnam, Indonesia, Malaysia, Thailand, the Philippines, and Hong Kong. It recently entered Japan and is scoping out markets in Australia, New Zealand, and Europe.
In fact, Uniphore is utilising the recently raised funds to expand to newer countries, tapping into the global potential one of its early investors Gopalakrishnan saw in the company. “They have gone about building the business step by step... making the adjustments needed in [developing the product] based on customer feedback and going international. B2B companies need to expand globally to tap into better paying customers outside India,” he says, adding, “in a B2B business, relationships are sticky.”
Typically for a large B2B software as a service (SaaS) company, the gross profit margin is about 75%-80%. Uniphore claims to be at par with the industry benchmark and confident about improving on it. “Two years ago we said that we will take five years to hit $100 million in revenue. Now we feel that by next year we can achieve the target with a valuation of over $1 billion,” says Sachdev, who refrained from divulging more about the company’s financials. According to reports in July 2019, Uniphore was valued at an estimated $130 million. It declined to comment on its valuation.
If it does achieve the scale Sachdev envisions, it’ll be an unprecedented win for a software product firm from India and put it in a league with IT-services giants like TCS, Infosys, Wipro, and HCL Technologies. Experts say a software product firm cannot be built with a short-term mentality. It demands a combination of entrepreneurs and investors who are willing to think long term. “Uniphore is a great example of an Indian-born startup emerging as a global disruptor. Its ability to empower enterprises across over 100 languages, in real-time, and with industry-leading accuracy, is what sets it apart from the competition. Growth rates are never completely predictable nor is execution flawless. We believe strongly in the team to overcome those inevitable challenges,” says Sumant Mandal, managing director, March Capital Partners.
In the call centre or customer service industry, fast response and adherence to timelines are key. Investors point out that Uniphore has helped clients become more cost-effective and time-efficient by minimising human intervention and error. Tanvir Khan, president of business process outsourcing at NTT Data, a Uniphore client, concurs. “Uniphore’s solution is helping reduce costs and customer service advisers’ time by automating mandatory after-call tasks.” For instance, its conversational assistant product can fully automate a simple transaction through its AI platform. A consumer can talk to an automated conversational assistant in the local language instead of pressing multiple options on the interactive voice response (IVR) menu during a call. The assistance in local language has proved to be the biggest differentiator in countries which tend to be, largely, one-language: So 97% of the calls in Thailand are in Thai, while 99.5% in Vietnam are in Vietnamese.
In 2017, when the founders took a conscious decision to venture outside India, they identified Singapore as their first stop. Saraogi relocated to Singapore early that year to set up the Asia-Pacific business. Singapore, he says, was a strategic move to connect with other key markets in the region easily. “[Although] even Singapore as a standalone market is quite mature to consume new technologies and innovation,” he adds.
In 2018, Uniphore set up base in Palo Alto, California, with Sachdev moving there to serve its key market better. Six of the eight members of its top management are based in California’s Bay Area, the tech-startup hub of the world. While Chennai continues to be its headquarters, operations are run out of Uniphore’s U.S. offices, with Singapore as its APAC hub.
The shift to California also helped hire top-class engineers for its R&D work in areas of machine learning, AI, and data intelligence. Recently Uniphore brought on board Cosimo Spera, its new vice president for AI and machine learning. He was a former professor at UC Berkeley College of Engineering and was the chief data scientist at 247.ai, where he led the development of conversational AI models.
Uniphore currently employs approximately 200 people, of which over 130 work on product development across offices in India, Singapore, and the U.S. It is looking to add about 70 more people by March.
With the opportunity this clear and present, Uniphore has competition from home in the conversational AI space—Bengaluru-based startup Yellow Messenger and AI chatbot firm Haptik, which got acquired by Reliance Jio Digital Services in 2019 for ₹700 crore. The investment is expected to help Reliance build an AI assistant across voice, chat, and vernacular languages. Globally it competes with players such as cloud firm Salesforce.com, which last year acquired Tel Aviv-based conversational AI startup Bonobo to boost its offerings.
The founders are aware of the hurdles in building a product company in a global competitive market, besides the inevitable risks and challenges. “Since the business is B2B, a slowdown in the global economy can affect business; sales costs in a global business are much higher; and management bandwidth [is needed] to run a global business,” says Gopalakrishnan.
But challenges don’t bother the duo who had given in to an entrepreneurial bug at a time when “most of our peers were either preparing for the common admission test (CAT) for admission to the Indian Institutes of Management (IIMs) or preparing for higher studies abroad. The rest were ready to join multinationals. It was tough for us to not follow convention,” recalls Sachdev. That indicates a tenacity that, coupled with patience, makes for thriving entrepreneurs.
(This story was originally published in the January 2020 issue of the magazine.)