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Copy.ai, a startup building AI-powered copywriting tools for business customers, announced a $2.9 million round this morning. The investment was led by Craft Ventures. Other investors took part in the deal, including smaller checks from Li Jin’s newly-formed Atelier Ventures, and Sequoia.
The startup is notable for a few reasons. First for its model of building in public. I initially heard of the company through its monthly updates that it posts on Twitter. Thanks to that, I can tell you that Copy.ai generated monthly recurring revenue (MRR) of $53,600. That figure, up 46% from January, works out to annual recurring revenue (ARR) of $643,200.
Copy.ai also shares usage numbers, and, humorously, the number of Twitter followers that its founder Paul Yacoubian picked up in the last month.
The startup is also worth watching because it is part of a growing cohort of companies building atop GPT-3, what its progenitor the OpenAI project describes as an “autoregressive language model with 175 billion parameters.” More generally, it’s a piece of AI that can generate words.
Some investors are rather bullish on startups using the technology. Recently on TechCrunch, for example, Madrona’s Matt McIlwain wrote that “the introduction of GPT-3 in 2020 was a tipping point for artificial intelligence” that will lead to “the launch of a thousand new startups and applications.”
So far that’s holding up. Not only has Copy.ai managed to find early in-market traction, TechCrunch has covered a number of other startups busy leveraging GPT-3, including OthersideAi which raised $2.6 million back in November of 2020, and an “AI Dungeon-maker” called Latitude that also employs GPT-3 and raised $3.3 million this February.
But enough about its cohort. Let’s get into how Copy.ai got built.
Origins
Before founding Copy.ai, Yacoubian was an investor and, it seems, a tinkerer. He played with GPT-3 predecessor GPT-2 when it came out, telling TechCrunch in an interview that he discovered that the tool generated lots of “nonsense,” with the occasional “flash of brilliance.” GPT-3 proved even better in his view, providing something akin to a “50x” improvement on the generation that came before it.
Leaning on Twitter as a distribution method — Copy.ai uses Twitter as distribution channel, hence its reporting on social media metrics — Yacoubian and his co-founder Chris Lu launched a few different draft-projects using GPT-3. Simplify.so did text condensing, a slackbot was built but never made it to the outside world, and taglines.ai was put together to help companies come up with slogans.
That last one found early traction, generating around 700 sign-ups in two days. That was enough of a user base, the co-founders decided, to begin monetizing their tool. Then they decided that the initial could be extended to other writing use cases, helping people with myriad distinct writing projects. Copy.ai was formed out of that concept.
The product can now generate text for blogs and products and headlines and the like, based on user-provided word inputs.
What’s odd and nearly antithetical to your humble servant as a writer is that Copy.ai doesn’t want to save you word count, per se. Instead, it generates a number of possible text results that the customer then chooses from. Recall the flashes of brilliance that Yacoubian said GPT-2 could generate? GPT-3 is even better, giving users of Copy.ai even better possible text formulations for their needs. And then the human-in-the-loop plays the editor role, choosing which they want the most and, I presume, tweaking from there.
When it was released back in October of 2020, Copy.ai snagged 2,000 sign-ups in its first two days. Then investors started reaching out.
Quitting their day jobs, Copy.ai became a full-time affair. The unorthodox startup also put together an unorthodox round, raising from what Yacoubian described as “as many people as [they] could.” That wound up being 80 people, give or take.
The round was raised as a capped SAFE, the Y Combinator-favored investing instrument that allows startups to accrete capital from external sources without a formal pricing; instead, SAFEs are often “capped” at a maximum valuation. Copy.ai raised its cap as its fundraising process trundled along.
David Sacks, founder of Craft Ventures, told TechCrunch that he thinks that “natural language generation powered by AI is going to change the way that marketing teams write copy,” adding that amongst startups it is “rare to see such strong bottom-up adoption in so short a time.”
I am honestly a bit excited to see what Copy.ai can do, not because I will use its product — it’s not precisely in my wheelhouse — but because I am rather excited about GPT-3 as a technology. And the startup is an in-market experiment regarding AI and writing. Two things I care quite a lot about.
Stack Overflow is the default Q&A site for programmers (though the overall Stack Exchange network goes well beyond helping you answer your basic PHP questions). But over the course of the last year and a half, with its new CEO Prashanth Chandrasekar coming on board, the company has also kickstarted its SaaS business with a new focus on its StackOverflow for Teams product. Teams offers businesses something akin to a private Stack Overflow for managing and sharing knowledge across a company. Until now, Teams was only available through a paid subscription (or a time-gated trial), but starting today, Stack Overflow will move to a freemium model with a perpetually free plan.
As Chandrasekar told me ahead of today’s announcement, Stack Overflow’s $85 million Series E funding round this summer was all about Teams and accelerating its SaaS growth. “We wanted to double down on eams,” he said. “And that is very much — as we transform into a product-led SaaS company from our foundation of the community and the public platform — that’s a huge, huge focus.”
Image Credits: Stack Overflow
Like so many products in this space, Stack Overflow for Teams experienced rapid growth in 2020. Its annual recurring revenue grew 72% last year, the company tells me, and it added over 1,500 Teams customers, including 70 that opted for its high-end Enterprise tier. Teams customers now include the likes of Box, Microsoft, Bloomberg, Instacart and Zapier.
The new freemium offering will be limited to 50 seats, but for the most part, it’s quite a fully-featured solution, with support for all of the core Teams features. It also includes support for the service’s ChatOps integrations with Slack and Microsoft Teams (side note: maybe there are too many products with the name ‘Teams’ right now?). The free service also includes support for single sign-on solutions, which isn’t always a given for a freemium SaaS offering. And while the enterprise tier is SOC II certified and runs on single-tenant instances, that’s not the case for the free, basic and business tiers.
“At Unqork, we use Stack Overflow for Teams and its Slack integration to empower our creators to learn from each other in a productive way and to support our clients building solutions on top of our platform,” said Olga Gomonova, head of enablement at Unqork. “Since implementing Stack Overflow for Teams for internal and external use cases, we’ve been able to reduce the time to respond to client and internal questions from 60 to 30 minutes, and have been able to onboard new hires faster as our company grows.”
Image Credits: Stack Overflow
Some of the missing features, however, are access to Stack Overflow for Teams’ Articles format for longer-form content and Collections, a feature that allows users to group together sets of similar questions that can be used for an onboarding workflow or in place of a traditional FAQ document, for example. Stack Overflow CPO Teresa Dietrich tells me that the company has seen over 50% adoption of Articles since its launch in August 2020. The company also recently introduced a private feedback option for Teams.
“We found that, unlike on the public Q&A sites, people weren’t comfortable giving downvotes to content on the Teams product until we introduced private feedback,” she said. “So now they give feedback to the content writer in a private way that says it’s incomplete, it’s out of date, or it’s wrong. And then they can put text around that feedback and only the owner of that content sees it.”
The freemium offering has been in the works for a while. As Chandrasekar and Dietrich both noted, the company removed the credit card requirement to get started with the 30-day Teams trial that had been in place before. “We realized through that experience, that it was actually not enough time to allow companies to create a community internally and that’s basically what we’re trying to do,” Chandrasekar said. “So that was a huge learning for us to say it didn’t make a lot of sense for us to keep a free trial that was timeboxed. And that really expanded to just make it free for life.”
Dietrich added that before launching this free offering, the company also wanted to make sure that it had optimized its onboarding flow for these free users as well.
Digitail, a cloud service for veterinary surgeries and customers, has raised $2.5M in a Seed round led by byFounders and Gradient Ventures (Google’s AI fund), joined by Partech and a series of angels including as Dr. Ivan Zakharenkov (Smartflow). The startup was already backed (pre-seed round in 2019) by Fast Track Malmo. Digitail is currently used by 2,000 veterinarians in 16 countries.
Digitail says its “all-in-one” practice management system for animal hospitals and veterinary practices “helps vets simplify their workflow, drive automation, and engage with pet parents, even when they are not at the practice.”
For pet owners Digital had a Health Card for pets, a customer app that is directly connected to the PIMS and acts as a digital ID for the pets. This holds the pet’s medical history, and allows the owner to communicate with the vet through the in-app chat, book their next appointment, and store any other important information about their pet.
The founders are Sebastian Gabor (CEO and co-founder), Ruxandra Pui (CPO and co-founder). They are joined by Alexandru Gheorghita, DVM, in-house veterinarian specialist.
Gabor said in a statement: “Pet care is still being run like in the 90s. Because of the lack of a holistic vision and approach, there is no data unification and no collaboration between the key players of the industry. As a result, vets still need to rely on outdated tools while collaboration and innovation is stopped.”
Competitors include Rhapsody.vet which has raised an $8M Series A, Ezyvet, and Hippo Manager, among others. But Digitail says its all-in-one approach has an edge on the others.
According to some estimates, some 39% of pet owners in the United States are millennials. Digitail is thus finding business among veterinarians surfing a new generation of customers who expect to be able to make bookings and arrangements with their vet via an app. Just as with apps aimed at doctor’s surgeries, Digitail’s platform handles that incoming customer data and also allows the surgery to run. The pet care industry is predicted to reach a value of $200 billion by 2025.
French startup PayFit has raised a $107 million series D funding round (€90 million). Eurazeo Growth and Bpifrance’s Large Venture fund are leading today’s round. Existing investors Accel, Frst and Xavier Niel are participating once again.
PayFit has been building a payroll and HR software-as-a-service platform. It lets you manage your payroll from a web browser and automate as many steps as possible. For instance, you can configure automate payslip generation, export your payroll data to your accounting software and get a list of payments you need to make when it comes to pensions, health insurance, etc.
Given that it’s a software-as-a-service platform, everything remains up to date. For instance, if there are some regulatory changes that require some adjustments, PayFit can update its platform so that you remain compliant from day one without having to think about it.
Over time, the startup has expanded beyond payroll to tackle a bigger chunk of the HR stack. Each employee gets its own PayFit login to access their payslips. But the company doesn’t stop there as you can request time off and enter how much time you’ve worked this week if you’re paid on an hourly basis. PayFit automatically notifies the manager for approval.
PayFit can also become your central repository for expenses and receipts. The company already has everyone’s bank information, which makes it easier to transfer money back to an employee for a cash expense.
Employees can also view the company’s directory and management chain from PayFit. The HR department can set up an onboarding flow in PayFit so that employees can request a computer, a badge, and enter personal information as soon as they join the company.
If you work for a big company that uses something like Workday, all of this probably sounds familiar. But PayFit targets small and medium companies that don’t want to sign expensive contracts with enterprise companies. It has attracted 5,000 clients that employ 100,000 employees overall — that’s an average of 20 employees per company. Some of the biggest clients include Revolut, Starling Bank and Treatwell.
The company is currently live in France, Germany, Spain, Italy and the U.K. It currently has 550 employees and it plans to hire another 250 employees in 2021 to support its growth.
