9 Startups Building AI Powered Chatbot Apps

Melanie Ring

In App Startups

October 19, 2016

Man and woman chatting with AI chatbot in a smartphone app. Vector illustration

The rise of chatbots has certainly got the mobile tech world talking. Bots have had some impressive coverage and adoption this year, especially since Facebook allowed businesses to deliver customer service and content through chatbots on Messenger.

Developments in artificial intelligence (AI) and the popularity of messaging apps are fuelling the growth of chatbots. In 2016, the number of messenger bots grew by 170% over 3 months, compared with 100% growth of apps, according to Citigroup research. But what does this mean for the future of apps? While the tech giants claim chatbots are the new apps, others warn us to beware of the hype, believing bots will form an integral part of a brand’s app-first approach.

Chatbots are particularly popular within concierge apps. The AI element does most of the work behind the scenes to automate simple tasks, while the chat-based interface provides more interaction. Of course, this also provides a much more economical option than the human equivalent. AI-driven chatbots now aim to replicate human interaction.

Rather than turning away from apps or dismissing chatbots as a fad, many startups are embracing these changes by integrating bot technology into their own apps. Here’s our pick of the thriving startups creating AI-driven chatbot apps.

 

Mezi-logo

Mezi launched its chatbot shopping app back in December 2015. The app uses artificial intelligence and natural language processing (NLP) to learn individual users’ needs and offer personalised recommendations for things like travel, fashion and gifts. It’s this seamless and engaging shopping experience, within messaging, that sees over 40% of its users return on a monthly basis. Co-founded by twin brothers Snehal and Swapnil Shinde, Mezi recently raised $9 million in a Series A funding round led by Nexua Venture Partners, to continue its growth.

  • Led by: co-founder and CEO Swapnil Shinde
  • Funding total: $11.8 million

 

Haptik logo

Haptik is a mobile concierge app based in India. The chat app processes thousands of requests each month for tasks like shopping, food delivery and travel. Although the majority of requests are dealt with by a team of human assistants, Haptik plans to increase its focus on artificial intelligence (about 25% of requests are currently completed by AI). Since launching in 2014, the app has over one million downloads. And this year, Haptik raised a reported $11.2 million of Series B funding from India’s media giant Times Internet.

  • Led by: co-founder and CEO Aakrit Vaish
  • Funding total: $12.2 million

 

Duolingo app logo

Duolingo’s language learning app now allows users to have text conversations with AI-powered chatbots. You can practice your language skills through conversations with bots (currently available in French, German and Spanish), and they’ll even make suggestions if you’re struggling to reply. Duolingo has already had huge success with its language learning platform and attracted investment from the likes of Union Square Ventures and Ashton Kutcher. In 2015, a Series D round, led by Google Capital, added a whopping $45 million to its funding pot.

  • Led by: co-founder and CEO Luis von Ahn
  • Funding total: over $83 million

 

MagicX

MagicX is an on demand chat-enabled app that helps users with every tasks like paying bills, making travel plans, and grocery shopping. MagicX has evolved from its human powered predecessor MagicTiger, to focus on artificial intelligence and machine learning to scale its service. It has been the Number 1 New Shopping App in the Play Store and had over 100,000 downloads, since launching in February 2016. This was also the year that MagicX raised a $1 million seed from investors including Aarti Grover, Hari Kumar and Kris Gopalakrishnan, to expand its team and product.

  • Led by: founder and CEO Pratyush Prasanna
  • Funding total: $1 million

 

babylon-health-logo

Babylon Health built the world’s first artificial intelligence triage platform. Babylon claims the app’s symptom checker outperformed doctors and nurses across 102 mock consultations. Earlier this year, the health startup closed a $25 million Series A round, led by Kinnevik AB including investment from AI company DeepMind. The new funding helped Babylon launch its AI feature, in which the app analyses a users’ symptoms to help them decide whether to follow up with a consultation. One in every 200 people in the UK are on Babylon.

  • Led by: founder and CEO Dr Ali Parsa
  • Funding total: $25 million

 

Lola-logo

Lola is an AI-assisted app that includes a human element in its on demand travel service. Chatbots handle the basics of requests, before handing users over to a human travel agent (also via chat) to sort the details. Lola is the latest venture from Kayak co-founder Paul English, who was inspired by the rising popularity of messaging. The app is currently only available in the US but this year’s $19.7 million Series A funding is sure to fuel further growth.

  • Led by: founder and CEO Paul English
  • Funding total: $19.7 million

 

Chip-logo

Founded by Simon Rabin and Nick Ustinov, Chip is an automatic savings app powered by AI. Chip connects to a user’s bank account, analyses spending habits and calculates how much they can afford to save. Rather than relying on an existing messaging app, Chip built its own iOS and Android app with conversational interface. The chatbot communicates with users through informal messages and emoji (yes, it’s geared towards millennials) to help them manage their money and encourage saving.

  • Led by: co-founder and CEO Simon Rabin
  • Funding total: undisclosed

 

Mona app logo

Mona is a personal shopper app with chatbot to help users source and buy high-end fashion pieces. The app combines artificial intelligence with big data to provide highly personalized fashion recommendations. It even connects to a users’ email to shift through receipts and learn more about their preferences. Founded and built by former Amazon techies Orkun Atik and Nurettin Dag, Mona is integrated with over 100 retail sites and searches more than 1,300 premium brands.

  • Led by: co-founder and CEO Orkun Atik
  • Funding total: $100,000

 

Dunzo app logo

Dunzo is an app that combines AI and human operators to manage daily tasks. Users can create to-do lists and collaborate with team members using its chat-based interface. Dunzo currently processes 10,000 transactions per month and is working towards more automation. This year, the Bangalore-based startup secured $650,000 of seed funding to build a larger engineering team and expand its product.

  • Led by: Kabeer Biswas, Dalvir Suri, Mukund Jha and Ankur Aggarwal
  • Funding total: $650,000

 

Summary

Advancements in artificial intelligence and messaging is resulting in the rapid adoption of chat apps. The conversational nature of chatbots provides a great opportunity to engage with users. Dan Olds, founder of Gabriel Consulting Group, believes the potential of chatbots goes far beyond customer service, for example, combining chatbots with video in edtech and revolutionising areas such as recruitment.

Discover more about the app industry in our other app startups articles.