AI transcription startup Otter.ai today announced it has raised $50 million in a series B round that includes $10 million in convertible notes and was led by Spectrum Equity. With the funds, the company plans to triple its headcount over the next year as it hires across its AI, deep learning, natural language processing, frontend and backend engineering, and leadership teams.
There’s no shortage of competition in the audio transcription market, which is estimated to be worth $31.82 billion by 2025. But Otter.ai — formerly AISense — the startup behind speech-to-text service Otter, has managed to carve out a niche for itself in the five years since its founding. The company’s revenue skyrocketed 800% in 2020 as Otter saw adoption in more than than 230 countries. And the company says it has transcribed over 100 million meetings, spanning 3 billion minutes to date.
Otter.ai was founded by CEO Sam Liang and VP of engineering Yun Fu in 2016. Liang led the Google locations team that developed the “blue dot” on the Google Maps app and launched mobile startup Alohar, which was acquired by Alibaba in 2013.
Otter.ai’s core technology, which was developed by a team hailing from Google, Yahoo, Facebook, MIT, Stanford, Duke, and Cambridge, is optimized for conversations. It can distinguish between speakers using a technique called diarization, generating a unique print for each person’s voice. Transcriptions are processed in the cloud and made available from the web, in Dropbox, or in Otter.ai’s mobile app for iOS and Android devices. There, they can be searched, copied and pasted, scrolled through, edited, and shared with a word cloud at the top of each recording that tracks most-used terms.
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“Otter’s high accuracy is a result of the algorithms that enable the app to ‘learn,'” a spokesperson told VentureBeat. “These were especially focused in the early days on English speakers with a variety of accents — regional within the U.S. and also optimized to address accents like Liang’s and the billions of English speakers on the planet. Liang had always been frustrated that accents were not understood by natural language processing systems.”
Otter.ai competes with Microsoft 365, which can host live events with AI-powered features such as facial recognition of attendees and autonomous speech-to-text conversion, as well as meeting transcription tools from Cisco and startups Voicera, Verbit, Trint, Simon Says, and Scribie. But Otter.ai seeks to differentiate its service with competitive pricing. Otter Pro starts at $8.33 per month, making it only slightly pricier than the company’s business tier, which costs $20 per month. Otter.ai also offers a free plan, with 600 minutes of transcription per month and unlimited cloud storage.
Otter.ai recently brought Otter to the education market with Otter for Education, which lets instructors control access to recorded transcripts and complements student disability services and accessibility technologies. Otter.ai more recently launched Otter for Teams, a subscription solution designed to accommodate the needs of small and medium-sized businesses with account management, provisioning, reporting, and other features. This summer, Otter.ai debuted Otter for Events, a service that uses Otter’s natural language processing tech to capture event conversations and turn them into transcripts in real time.
Otter.ai offers plugins for Zoom and Google Meet that allow participants to get a live captioning of the meeting, followed by a transcript. It’s part of Otter Live Notes, Otter.ai’s offering that lets participants open a transcript directly from a videoconference or after a meeting. Otter Live Notes enables users to access some of the same real-time features available in Otter Voice Meeting Notes, which can be launched directly from a videoconferencing platform.
The growing list of organizations that have piloted or are actively using Otter includes California State University, Columbia University, and the Warwick Business School. Otter.ai claims to have millions of users and expects that the pandemic will continue to fuel growth.
“It is becoming more clear by the day that remote and hybrid working are trends that are here to stay,” Liang told VentureBeat via email. “Consequently, we need to rethink meetings in order to make them more productive for everyone participating in this new, virtual world with productivity and collaboration tools.”
Beyond Spectrum, Horizons Ventures, Draper Associates, GGV Ventures, and Draper Dragon Fund participated in Otter.ai’s latest funding round. It brings the Lost Altos, California-based company’s total raised to date to over $63 million.
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