The Kata.ai team

Indonesian artificial intelligence (AI) startup Kata.ai today announced that it has raised a US$3.5 million in Series A funding round led by Taiwan-based Trans-Pacific Technology Fund (TPTF).

MDI Ventures, Access Ventures, and Convergence Ventures also participated in the deal.

In addition to them, VPG Asia, Red Sails Investment, and angel investor Eddy Chan also took part in the round.

As part of the deal, TPTF principal Barry Lee has joined Kata.ai’s board of directors.

Kata.ai targets the B2B segment, offering AI and Natural Language Processing (NLP) technology through Bahasa Indonesia-speaking chatbots that brands use for customer engagement.

The startup is the result of a pivot of virtual concierge service YesBoss, which announced their hiatus in late 2016.

It plans to use the new funding to fuel international expansion by establishing a wholly-owned subsidiary in Taiwan.

In a press statement, Kata.ai said that it will collaborate with local tech startups to serve market. The company also said that it is in talks with “potential strategic partners” throughout the Southeast Asian region.

To support their expansion plan, Kata.ai will also allocate funding for research and development, particularly in developing their NLP technology to be able to understand and operate in other Southeast Asian languages.

The startup is also set to launch Bot Studio Platform, a web-based software for developers to build their own chatbots using the same NLP technology that it has created and used.

The beta version of Bot Studio Platform is currently open for select partners; it will be formally launched in October 2017.

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The pivot

YesBoss was founded by Irzan Raditya, Chris Franke, Wahyu Wrehasnaya, and Reynir Fauzan. Launched in June 2015, it raised an undisclosed seed round in October 2015 from 500 Startups, IMJ Investment Partners, and Convergence Ventures.

The startup offers services such as restaurant and airline ticket booking through SMS and a mobile app.

It has also acquired the Philippines-based startup of similar service HeyKuya along its journey.

Despite having outlived its competitor HaloDiana, which had closed down in April 2016,  YesBoss made headlines in September 2016 when the startup announced that it is going to shut down its services for an “indefinite amount of time.”

After a month of hiatus, it announced that it has pivoted into the B2B segment with the launch of Kata.ai.

“I’d personally thank my fellow co-founders who keep having faith and sticking together through the ups and downs of our company’s journey; it is not easy to find a team like this. Our investors or backers, they also have been very supportive through our tough times, during the business transition,” CEO Irzan Raditya told e27 in an email.

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To support the process of rebuilding itself, the startup got renowned Indonesian computer scientist Jim Geovedi on board as an advisor.

Raditya explained that he played “an integral role” in advising the team in the early phase of its AI and machine learning development, based on the industry’s best practice and the research he has been doing for years.

Following the pivot, Kata.ai claimed that the total number of people who engage with its chatbots has reached six million within the span of eight months.

Kata.ai has built a chatbot in LINE messenger app named Jemma for Unilever, which is used to liaise with customers on behalf of the FMCG giant.

The startup also partners with global management consulting and professional services company Accenture to build a chatbot named Veronika for state-owned mobile operator Telkomsel.

It is currently working to adapt its technology for the telco, consulting, banking, and retail industries.

What are the most crucial lessons that Raditya has learned during the process of pivoting?

” … The first key is resilience. A startup journey is never a straight-line success, and resilience is required when you realised some things don’t work out. You need to fight and survive to bounce back,” he said.

“Another one is patience, there is definitely nothing such an overnight success. No matter how hard you try, some things just take time, be it getting the first customer who believe in you, waiting for the market to be ready, getting the product delivered, and so on,” he added.