Thursday, 25 January 2024, Bengaluru, India
Series A funding of $4 million, has been secured by DXwand, a startup located in Cairo and Dubai that uses conversational AI to help Middle Eastern organizations automate employee assistance and customer care.
(Image Source: https://innovation-village.com/)
The investment was led by Cairo-based Algebra Ventures and UAE-based Shorooq Partners, with the participation of current investor Dubai Future District Fund. With the help of the Series A financing, DXwand will be able to grow even more in the MENA area and focus more of its research and development efforts there on generative AI, knowledge mining, and omnichannel conversational AI.
CEO Ahmed Mahmoud was at Microsoft before starting DXwand, overseeing enterprise sales for data and artificial intelligence throughout the Middle East and the Gulf. His career began with an engineering background, working in software and fake intelligence development teams. Mahmoud moved to the business side of the sector. He worked for Microsoft and Vodafone, where he interacted with clients to discover how artificial intelligence (AI) could improve user experience and efficiency.
He noticed something clear when working at Microsoft: Silicon Valley’s solutions did not support Arabic or other regional languages. Therefore, conversational AI and more general AI technologies must be wholly developed and matured in the Middle East. “I tried to see whether we could create AI models for the spoken languages in the area at that time, but we ran into some difficulties. Realizing a business opportunity led me to leave Microsoft and start DXwand to close this gap.
Mahmoud established DXwand in 2018 to offer small businesses a customer-focused chatbot designed for social media platform sales after its acceleration program. The company first received $150,000 seed money from angel investors in Egypt and Qatar. However, the team quickly saw that it was necessary to change business models to achieve profitability and discover a product-market fit.
The artificial intelligence startup based in Egypt radically changed course in 2021, focusing on large corporations and companies rather than startups. It also shifted its focus to the knowledge mining and retrieval augmented generation (RAG) areas. Back then, the buzz around massive language models hadn’t yet taken off as they have now — and DXwand sought to construct a knowledge graph that eliminated the need for consumers to classify data manually. Using this method, it is possible to pre-label data, which speeds up the onboarding of new clients and supports complex use cases, ultimately assisting businesses in their adoption.
Imagine an organization managing an extensive collection of regulations and information—enough to fill a room with PDFs. The difficulty comes when they try to automate sales or customer support through their digital platforms, as these tasks usually require laboriously identifying all that data. Achieving this is a realistically tricky task that many may think is unfeasible. Knowledge mining can be used in this situation. These businesses can now input their raw data and let DXwand’s technology handle the labeling by producing a pre-labeled set and optimizing their workflows to provide conversational experiences for their employees or clients without dealing with the laborious effort of human data labeling.
In summary, phone and text chats between businesses, their clients, staff, and citizen-facing government services are automated by DXwand’s AI-powered software. This feature works across several channels, such as websites, SMS, Facebook Messenger, WhatsApp, and call centers. According to the platform, it can understand slang in both Arabic and English, pulling insightful information from discussions and displaying it on dashboards so businesses can make wise decisions. The company claims that offering analytical tools and dashboards that provide insights into these discussions and convert them into leads and sales improves client acquisition and retention.
The firm raised an additional $1.3 million seed extension from SOSV and other investors and $1 million in pre-Series A funding from the Dubai Future District Fund between 2021 and 2022 to develop this concept throughout the Middle East and Gulf regions. Large language models were becoming more and more popular throughout this time. As these technologies developed, DXwand AI took advantage of the chance to broaden its product line and meet the growing need for these solutions among its clientele.
The CEO emphasized that the chatbot platform serves more than 40 clients in the MENA area, representing various industries, including government, law, e-commerce, healthcare, and finance. Mahmoud continued, “Since its founding, the AI startup has enabled over 5 million conversations and is currently profitable.” Annual membership fees for clients range from $50,000 to $400,000, depending on usage volumes. Mahmoud also disclosed that the business generated over $5 million in recurring annual sales in 2023—a gain of two times year over year—highlighting the platform’s growing importance and uptake in a market where AI platforms are scarce.
With this fresh funding, Mahmoud revealed on the call that DXwand is looking to expand throughout Saudi Arabia and Africa, noting that these two markets are significant to the startup’s business goal. He adds that the startup’s primary priorities are stepping up research, particularly in knowledge extraction and retrieval enhanced creation, and developing partnerships with digital companies like telecom operators to create significant relationships within the communities they serve.
(Information Source: Techcrunch.com)
