AI Voice-To-Text Startup Wispr Flow Raises $280 Mn At $2 Bn Valuation

AI voice-to-text startup Wispr Flow has raised $280 million in a Series B funding round, taking its valuation to $2 billion and highlighting continued investor interest in artificial intelligence (AI) companies developing hands-free workplace tools.

The latest valuation is nearly three times the $700 million at which the San Francisco-based company was valued nine months ago, as per Reuters.

Wispr had raised $25 million in a Series A extension round in November last year.

The Series B round was led by existing investor Menlo Ventures. Existing backers Notable Capital, NEA and Neo Ventures also participated, while Acrew, Forerunner, Goodwater and Peak XV joined the company as new investors.

With the latest financing, Wispr Flow's cumulative funding has risen to $361 million, per Reuters.

The fresh funding and sharp increase in valuation place Wispr Flow among the latest AI startups to benefit from strong investor demand for companies building specialised tools around emerging AI technologies.

The company's software converts spoken words into text and is designed for writing and workplace-related tasks. Its products are currently used by more than 10,000 enterprises.

The funding comes amid a broader flow of venture capital into artificial intelligence, robotics and semiconductor businesses. Investment activity in these sectors has contributed to the emergence of more billion-dollar startups, quicker follow-on funding rounds and higher valuations for a relatively small group of rapidly growing companies.

However, maintaining the pace of growth that attracts investors could become more difficult as companies move beyond their initial users.

"The value may be there if the growth rate survives, since triple digit quarterly growth off a small base is the easiest number in venture capital to generate for a few quarters and the hardest one to keep producing once the early adopters stop being the entire customer base," said Michael Ashley Schulman, partner at Cerity Partners, as per Reuters.

Company Unveils Speech-Recognition Model

Alongside the funding announcement, Wispr Flow unveiled a preview of Canto, its first proprietary speech-recognition model.

CEO Tanay Kothari said the model had been developed around the conditions in which users typically rely on the company's Flow product, including environments affected by background noise, wind, music and heavy accents.

"We built this model for where people actually use Flow. In the hardest conditions, with background noise, wind, heavy accents or music, error rates fall from more than 30% of words to somewhere between 5% and 10%," CEO Tanay Kothari said in a blog post, as per Reuters.