According to a person with knowledge of the situation and a presentation deck seen by TechCrunch, Ripcord, a startup that creates robots that can Steve Wozniak-backed File Scanning Startup, is looking to raise $20 million to $25 million in a fresh investment round, valuing the business at $110 million pre-money.
GV, Lux Capital, and MUFG, all owned by Alphabet, are in discussions to take part in the deal. MUFG, a Japanese financial conglomerate, looks to be Ripcord’s newest supporter; GV and Lux were previous investors. For a response, we contacted Molly Vernarecci, the marketing director at Ripcord, via LinkedIn. Before publishing, she had not responded.
However, in response to an email, Sam Fahmy, CEO of Ripcord, said that the current round is closer to $35 million and that $20 million of it has already been secured, including an alleged $8.5 million “bridge note” from March.
If the round is successful, Ripcord would have raised approximately $150 million in total, with the majority coming from prior backers Kleiner Perkins, Silicon Valley Bank, Tyche Partners, Icon Ventures, and Baidu. A notable participant in Ripcord’s series A was Apple co-founder Steve Wozniak.
Additionally, the new financing would be far less than Ripcord’s previous round, a Series B, which closed at $45 million. The reason wasn’t immediately apparent, and neither was the explanation for the three-year interval between Ripcord’s outside injections.
For customers like Coca-Cola, BP, Chevron, UCLA, Cantium, and several Fortune 100 firms, including three of the top five financial services providers and three of the top five insurance carriers, Ripcord claimed to process over 1 billion pages annually in 2020. By the pitch deck, Coca-Cola is still a client. Yet, the fate of some of the others remains uncertain.
Nonetheless, as per the pitch deck, Ripcord’s revenue rose from $5.9 million in 2021 to $11.8 million in 2022. Despite its current lack of profitability, the business foresees reaching $22.5 million in revenue by the close of 2023 and $49.2 million by the third quarter of 2024.
Steve Wozniak-backed File Scanning Startup:
Steve Wozniak-backed File Scanning Startup [Source of Image: Techcrunch.com]
Fielding, a former Apple engineer, Kim Lembo, a former NASA employee, and Kevin Hall are the three businessmen who founded Ripcord. The business creates real robots that can scan documents on their own and even take out staples. Ripcord sends files with barcoded labels and metadata to its facilities—one in the Bay Area, California, and two in Japan—through partnerships with logistics companies. There, it scans the files, keeps the information to satisfy compliance regulations or shreds and recycles it.
By charging between $0.08 and $0.25 for each image for document scanning, Ripcord generates revenue. However, according to Fahmy, the company also derives a sizable percentage of its income from “applying tech, including machine learning and generative AI, to understand and validate the data in the scanned documents.”
With the use of lifting and positioning arms, RGB cameras, and computer vision, Ripcord’s robots can handle various document types while classifying and extracting data. On the software front, the company’s platform uploads documents to the cloud and transforms them into searchable PDFs. It connects with a variety of third-party business intelligence and data processing technologies.
According to the pitch deck, Ripcord, which recently formed an integration agreement with OpenAI, is creating a generative AI tool to support its upcoming phase of growth. The business had planned to release the tool in September. Docufai is a freemium document discovery platform that enables users to ask questions about scanned documents and receive responses.
The pitch deck displays Ripcord’s suggested product roadmap for Docufai, which includes a collaborative notepad, the ability to identify similar documents, a future document translation function, and other sharing capabilities. By the end of Q3 2023, Ripcord hopes to have 1,000 customers signed up for Docufai. At some point in 2024, a premium tier will be made available, followed by teams and enterprise levels.