Voice AI Developer SoundHound to be released to the public via SPAC
SoundHound, a California-based company that provides voice AI technology to businesses in various industries, has announced that its plans will be made public on Nasdaq by merging with a Special Purpose Acquisition Company (SPAC).
SoundHound announced the news of its agreement with Archimedes Tech SPAC Partners on November 16. The merger transaction is expected to close in the first quarter of 2022, with SoundHound receiving gross proceeds of $ 244 million (£ 181 million). PSPC will provide $ 133 million, while the remaining $ 111 million will come from a PIPE (private investment in public capital) with shares priced at $ 10 each.
The new merged company will be called SoundHound AI (SOUN). The transaction suggests an enterprise value for SoundHound of nearly $ 2.1 billion. SoundHound grossed $ 7 million on gross revenue of $ 13 million in 2020, up from $ 3 million out of $ 8 million in 2019. For 2021, SoundHound estimates it will achieve gross profit of $ 15 million. million dollars on gross income of $ 20 million.
Started by Stanford graduates
SoundHound’s conversational intelligence technology is aimed at businesses that want to add personalized voice assistants to their products and services, while maintaining and preserving their own brands, users and data. SoundHound customers include Hyundai, Mercedes-Benz, Pandora, Mastercard, Deutsche Telekom, Snap, VIZIO, KIA and Stellantis.
For example, SoundHound voice technology can allow drivers to verbally ask for directions in their car and receive a response.
According to the SoundHound website, the company was founded in 2005, when “a group of Stanford graduates embarked on a journey, fueled by a vision: In their lifetimes we would talk about products like we do. let’s do with other people. Inspired to make their vision a reality, our company was born with a simple and powerful mission: to add voice AI to everything.
Initially the company was called Midomi and focused on music recognition through an app which was renamed SoundHound in 2009.
In an investor presentation webcast on November 16, SoundHound CEO and co-founder Keyvan Mohajer explained the technology to listeners. He said most voice technologies typically turn speech into text and then determine the meaning of that text. But the developers of SoundHound took inspiration from the human brain, which doesn’t use a two-step process but instead converts speech directly into meaning. SoundHound has created proprietary technologies he calls “Speech-to-Meaning” and “Deep Meaning Understanding” to understand complex demands.
“With our Speech-to-Meaning, when you speak to SoundHound’s technology, we perform both speech recognition and language comprehension, which results in faster response time and greater accuracy because real-time language comprehension can feed real-time speech recognizer as an additional piece of information to reduce potential errors.
2.2 million views of the demo video
Mohajer said the company aims “to be in billions of devices with voice AI and provide conversational interactions with those devices.”
“Every business will need to have a voice AI strategy, and there will be success stories built on platforms like ours.”
In a YouTube SoundHound technology demo video titled “This is Insane,” a smartphone user’s voice is heard sprinkling their device with a series of questions that were answered quickly and successfully. The video received 2.2 million views.
81 patents plus 146 pending
SoundHound has filed for 227 patents. Eighty-one have been granted, while 146 are still pending.
SoundHound’s revenue comes from three streams. Royalties are levied on products that use its technology, such as vehicles and other consumer goods. Subscription revenue comes from functions performed by its AI technology, such as customer service, ordering food, and making reservations and appointments. The third source of revenue for SoundHound is monetization – people who use products and services using SoundHound technology will be a source of additional leads and transactions.
Devices will initiate conversations
Mohajer said he envisions human interactions with voice AI enabled devices to be both responsive and proactive.
“We believe that the devices around you can initiate conversation based on certain triggers and contexts before you start talking to them. This leads to more interactions with more devices and more monetization opportunities.
SoundHound plans to retain its existing management team following the merger.
PIPE is anchored by Oracle, Qatar First Bank, Koch Industries and MKaNN Ventures. There will also be investments from Cota Capital, VIZIO, HTC, FIH Mobile (a Foxconn Technology group company), Structural Capital, Provco Group, Sompo and Pejman Nozad, among others.
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