On Wednesday, it was announced that Mexican startup Yalo had managed to close a US$15 million series B funding round led by B Capital Group. This group, El Economista writes, wants Yalo to be a 'Mexican unicorn'. This investment round was also joined by Sierra Ventures, which led a US$10 million series A investment round in September 2019.
Yalo, TechCrunch writes, offers different benefits to client companies, which include “upselling, collecting payments and providing better services to clients.” These are facilitated through its conversational AI software, which aims to facilitate natural conversation with its users.
The Yalochat platform has reportedly seen a message volume increase of 650 percent since the beginning of the COVID-19 pandemic. This has been aided by the fact that larger corporations outside the US are starting to use AI-based conversational tools to reach customers, TechCrunch reports. Already, customers such as Coca-Cola and Walmart are using the platform for things such as customer orders. The software is in use in different countries in Latin America and also entering the South-Asian and Southeast Asian markets. The fundraiser is a significant sign of confidence in the company and in the market it is targeting. According to a study by MarketsandMarkets, TechCrunch writes, the expectation is that conversational AI software will see investment of US$4.8 billion this year and will more than triple this amount by 2025.
In March, MBN spoke with Vice President of Marketing at Yalo, Phil Carpenter. “We focus on some of the largest companies in emerging markets, particularly in Mexico, and help them to build better and closer relationships with their customers,” he said. “(These companies) usually operate in four verticals: banks, consumer-packaging goods, retail and travel.” One of the advantages of facilitating communication and transactional services through an AI software, Carpenter stated was that it “helps companies decrease their costs and focus their human talent on solving harder problems or performing activities with higher added value.”
Considering that smartphone penetration stands close to 90 percent in Mexico, the potential of creating direct communication channels with customers seems very attractive. Already, Carpenter pointed out, smartphone users spend 84 percent of their time in conversation apps such as WhatsApp. Speaking with El Economista, Rashmi Gopinath, partner at B Capital Group, states that he expects between 40 to 60 percent of emerging market consumers to start doing purchases through conversational platforms.