Conversational AI startup Rasa Technologies raises $30M to combine LLMs with traditional chatbots

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Conversational artificial intelligence startup Rasa Technologies Inc. said today it has closed on a new $30 million funding round, bringing its total amount raised to date to more than $70 million.

The Series C round was co-led by StepStone Group and PayPal Ventures, and saw follow-on participation from Andreessen Horowitz, Accell and Basis Set Ventures.

The startup is on a mission to enable the world’s biggest brands to address customer’s needs with open and extensible conversational artificial intelligence. The company provides access to a range of sophisticated and powerful AI assistants that can be aligned with its customers’ business logic to ensure practical and meaningful user engagement. By enhancing its AI models with customer’s data, Rasa says it helps to reduce the risk of AI hallucinations, which is when chatbots generate false or misleading replies.

Rasa offers companies access to an open-source platform that developers can use to build chatbots, voice applications and other services that rely on conversational AI. The company’s products include Rasa Pro, which is described as a state-of-the-art conversational AI framework for enterprises that leverages powerful generative AI models to enable the development of customized chatbots. It’s an ideal choice for companies that want to build more sophisticated chatbots capable of engaging in deeply nuanced conversations, the startup says. It’s used for building chatbots that will follow business logic safely and predictably, it added.

For less sophisticated customers, Rasa also offers Rasa Studio, which provides a low-code, drag-and-drop interface that allows anyone to design, build, test, review and then continuously improve conversational chatbots based on large language models. The offering was actually built with Rasa Pro, and leverages a technology called Conversational AI with Language Models to keep complexity to a minimum. It’s said to combine the flexibility, nuanced understanding and rapid time-to-value of LLMs with the control and certainty of traditional chatbots, ensuring interactions remain coherent and natural.

Rasa co-founder and Chief Technology Officer Alan Nichol told SiliconANGLE that large language models are traditionally very difficult to control, so most conversational AI platforms have been forced to compromise by only using them for low-stakes topics. But he said this cautious approach means companies are unable to tap into the true value of LLMs.

“While many in the industry claim to incorporate generative AI, often it’s merely an addition of LLMs onto their existing platforms,” he said. “So we took a step back and asked ourselves, what is the right architecture for an LLM-native approach? Instead of the old and new sitting side-by-side, we invented a new paradigm that uses LLMs for what they’re really great at, while incorporating your business logic and brand in a foolproof way.”

Rasa co-founder and Chief Executive Melissa Gordon, said the company is unique in that it provides the power of LLMs with the control and certainty of traditional natural language processing-based AI chatbots. “Without this a user would be leaving it up to the LLM to make business process decisions that an enterprise would need to dictate, so you get the best of both worlds with Rasa’s approach,” she said.

The company said its customers include two of the world’s top three banks, various major insurance providers and global travel and hospitality companies. It adds that its development tools have been downloaded more than 50 million times by developers.

Gordon said the funds from today’s round will accelerate the company’s leading position in the conversational AI market, and help it to redefine what is possible for businesses using AI chat and voice platforms at scale. “With our technology, we’re well-positioned to transform how businesses interact with their customers, making every conversation impactful and personal,” Gordon said. “We will use the funding to advance our technological leadership and strengthen our market presence.”

The involvement of PayPal in today’s round is notable as the company’s first major AI investment. PayPal Ventures Partner Alan Du said the payment platform provider has already integrated Rasa’s technology into its customer service portal, and has seen an improvement in customer engagement. “We are making our first AI investment in Rasa because we believe it is the best platform for enterprises to develop robust conversational AI,” Du said.

Image: Rasa Technologies

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