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According to a recent report, the conversational AI market is projected to grow at 25% CAGR to reach $49.9 billion by 2030 from $13.2 billion in 2024. The growth in the market is driven by the continuing development within the computer vision and voice recognition technology that in turn is driving more in-depth and personalized interactions.
Rasa’s Offerings
San Francisco-based Rasa is an emerging player in the conversational AI space. The company was founded by Alan Nichol and Alex Weidauer in 2016. The idea to set up Rasa was born in Alex’s kitchen while building a chatbot using Dialogflow and other chatbot frameworks. As part of Alan’s PhD in physics, he applied machine learning to simulate small molecules. He realized that he enjoyed machine learning more than physics.By 2014, when large neural networks were gaining ground, Alan found himself gravitating towards natural language processing. This was also the time when the world was building out chatbots. Around 2016, they were building a bot because everyone wanted to automate conversations, but they soon realized that it was hard to build a bot because the developer tools were “just not there yet.” That was the inspiration behind Rasa.Rasa began to fill the need for a sophisticated chatbot framework by providing developers the tools that would help them take control, improve, and customize their chatbots. They decided to build a solution that was more mathematical, than one focused on language with the intention that the model could then by deployed by any company to tap its own resources to train their bots.Today, Rasa’s platform offers innovative solutions that use gen AI to facilitate impactful and personal conversations at scale, thus transforming how businesses engage with their clients. Its CALM (Conversational AI with Language Models) system simplifies the complexity of dialogue systems and is the base for building contextual AI assistants. CALM integrates natively with retrieval-augmented generation-based enterprise search so that when a user asks a question, CALM is able to decipher which component of that question needs to be answered using enterprise search.While Rasa began as an open-source offering, today it has two key products – Rasa Pro and Rasa Studio. Rasa Pro is available for free for small deployments but is an enterprise grade generative conversational AI framework and infrastructure suite that helps organizations scale, secure, and monitor their AI assistant.Rasa Studio is a no-code UI for enterprise customers that allows them to design, review, and personalize their AI assistant. Known as one of the most extensible generative conversational AI framework, Rasa Studio allows for a simple UI where users can drag and drop dialogue components for easier AI assistant development. Rasa has drawn traction from major enterprises, including American Express, Deutsche Telecom, Adobe, Orange, Dell, Accenture, and T-Mobile. With funding that it secured last year, Rasa has now been pushing forward to scale its enterprise level offering.
Rasa’s Financials
Rasa operates on a freemium model. It still offers a free developer edition for developers and teams starting an AI assistant project. The free offering provides access to one bot per company, with up to 1000 external conversations/month or 100 internal conversations/month and access to a free community support in its forum. Besides an Enterprise scale model, they also have a mid-tier model that allows for a much higher volume of conversation and is priced starting $35,000.Rasa remains privately held and does not disclose its financials. It has raised $80 million in funding so far. Its last round was held in February 2024 when it raised $30 million at an undisclosed valuation from investors including StepStone Group, PayPal Ventures, Andreessen Horowitz (a16z), Accel, and Basis Set Ventures.The high growth AI market has created a whole trove of startups like Rasa, with some who have deep pockets. Competitors like Yellow AI, Aisera, Cognigy, Finn.ai, and Kore AI are also creating AI-based solutions to transform the way companies engage with their customers.More By This Author:AI Unicorns: BigID Uses Machine Learning To Simplify Data Privacy
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