Participated · Equity · May 2018

SoundHound AI develops conversational voice-AI products and platforms, including recent launches Dynamic Interaction and SoundHound Chat AI. The company is focused on growing its subscription business with AI-based customer service offerings for call answering and restaurant food ordering while expanding its licensing business across smart devices, TV, and automotive verticals. It reported a $332 million bookings backlog as of December 31, 2022. To strengthen its balance sheet and fund growth, SoundHound closed a $125 million, four-year loan facility with $100 million funded at closing. The financing replaces roughly $30 million of existing debt, extends the maturity to 2027, and is described as minimally dilutive. The credit agreement also enables access to up to an additional $25 million and is expected to leave the company with more than $100 million in cash after closing costs and repayment of existing debt. SoundHound is a voice AI company that provides conversational AI services for automotive, connected home and hospitality applications. Its core product is conversational voice AI integrated via partnerships with Mercedes‑Benz, Kia, Hyundai, Toast, Qualcomm and Snap, and the company previously built music‑identification AI. The company went public in November 2021 via a SPAC at a $2.1 billion valuation and was once valued above $1 billion as a private company; that valuation has since fallen. SoundHound reported preliminary full‑year 2022 revenues of $31 million with gross margins over 70% and says it has a bookings foundation of well over $300 million. The company expects approximately 50% year‑over‑year revenue growth in 2023 and is positioning its voice AI products toward customer‑service demand. Earlier this month it laid off 40% of staff; part of the newly raised proceeds will cover severance and help shore up its market position. SoundHound develops Houndify, a voice-enabled AI and conversational intelligence platform built on its patented Speech-to-Meaning™ and Deep Meaning Understanding™ technologies and a Collective AI architecture. The platform provides fast speech recognition, sophisticated natural language understanding, knowledge graphs and developer tools, and exposes over 100 domains (weather, sports, flights, restaurants, etc.). Houndify powers more than 1,000 distinct products and has over 60,000 registered partners since its December 2015 launch. SoundHound also operates consumer apps—Hound (voice search & assistant) and SoundHound (music search and discovery)—that showcase the platform. The company plans to use new funding to drive adoption across automotive, IoT, consumer products and enterprise apps, and to expand globally with new offices in China, France and Germany while continuing momentum in the U.S., Japan and South Korea. The platform already integrates data and services from partners such as Yelp, Uber and Expedia and supports numerous automotive-specific domains. SoundHound began as a music-recognition app and has evolved under CEO Keyvan Mohajer into a company focused on conversational AI. It launched the Hound voice-powered assistant for iPhone and Android in March after around ten years of R&D. The company says Houndify has been embedded into more than 500 distinct products with over 20,000 partners, and its app has been downloaded more than 300 million times. SoundHound aims to build a voice-based AI that can understand increasingly complex, multi-part queries and plans to expand its AI patterns into other media such as text and images. With the new financing the company intends to invest heavily in what it calls “collective AI,” enabling developers to tap into shared domains and tools. Before this round SoundHound had raised around $40 million in financing.