In this issue of This Month in Voice, I’m packing two months. The main reason for this has been the launch of Voxalyze, the first user acquisition analytics platform for Alexa skills. With Voxalyze, we are trying to fix one of the biggest problems of Voice: skill or voice apps discovery. The launch has been epic, but very time consuming as we immediately started onboarding users and received inbound inquiries from early-stage venture capital firms as well as business angels. But enough said here is your monthly digest.
Some noticeable investments in January & February
- Bespoken raised around $2million
Bespoken, the US, and Peru (this explains their logo) based company closed a new financing round late in 2019 as Voicebot.ai reported. The company offers a SaaS solution for automated testing and monitoring tools for voice apps. While neither the amount nor who participated in the round was disclosed, it seems that the round size was north of $2million, pretty much the same size as what they raised in July 2018. The lack of information shared and the fact that the rounds are of the same size lead to some questions
Did their valuation increase? Typically early-stage startups raise money every 18 months, with each round marking a step forward (product-wise, sales-wise…etc.) with the valuation increasing along the way. With an increasing valuation, comes usually bigger and bigger financing rounds with investors taking more or less the same stake of equity in each round. This doesn’t seem to be the case here: does it mean that their valuation hasn’t changed since last month? Was it an internal round? Did some people already opt-out?
Most important is the identity of the new investors: are there any new investors at all? If so, who are they? It makes a big difference having either a venture capital fund (growth focus), a strategic investor (synergies focus), or any investor (focus could be anything) joining the list of equity owners.
- Yac.chat raised $1.5million
The Orlando-based startup, Yac, just raised $1.5 million in financing to reinvent voicemail. The 6 people startup aims at providing verbal feedback and communication asynchronously instead of needing to respond in real-time. Think like “I let you a voice message” rather than “I sent you an email”. Investors include Boost VC (Adam Draper) as well as Betaworks and Active Capital. The main word there is asynchronous as most of us using Slack/Whatsapp…etc. know how annoying those could be, while leaving a message via a voicemail that could be listened to (and answered) later is less obtrusive.
- Labworks raises £500k
Europe the UK, Alexa skill studio Labworks raised £500k. While this doesn’t seem to be a big deal at first, it actually is. London-based Labworks is behind some of the most popular Alexa skills or Google action. To make a mobile analogy, Labworks is one of the leading game-studio out there. The fact that they raised money signals two things:
- Investors start to believe in the voice-gaming space. So far, other skill studios managed to raise money, but this was mainly from strategic investors like Amazon or Google. This time the round has been led by RLC Ventures.
- Skill studios are on the path to profitability. While I don’t know the economics of Labworks, I know of a few studios that have some of their games breaking even. They are not printing money – yet – but after months iterating on the games, the funnel, and monetization via ISP (In-Skill-Purchase), they are finally getting there.
So, congrats Tom and his team. Now, if you need help with discovery and attribution when it comes to attracting new users….you know who to ask 😉
What happened at CES?
January feels like a long time ago, but it was only a bit more than a handful of weeks away. What to take away from the Las Vegas show? Amazon announced that there are now more than 200 million Alexa enabled devices in customers’ hands worldwide. That’s twice as much as a year before. At this stage, it’s fair to say that the Seattle giant has won the household battle. Some analysts estimate their market share at around 70% in the United States. Amazon is now focusing on the car and aiming at dominating the infotainment panel. Several announcements went in that direction with partnerships with the likes of Bosch, Here, and Tomtom, not to forget the fact you will soon be able to pay for your gas at Exxon and Mobil stations. Alexa everywhere is about to become a reality.
During the show, Google announced a set of new features for Google Assistant. Some of the highlights include the assistant being able to read full webpages to users, interpret and translate across languages in real-time and schedule assistant actions to be done at a specified time.
But for my the main takeaway from the show it that exhibitors don’t brag about voice integration anymore. For them, this is not a novelty or an innovation anymore, but a must-have feature that their clients expect.
Amazon tested audio ads on Alexa
So, Amazon tested audio ads with a few selected brands such as Colgate and L’Oréal. From my point of view, there are two drivers behind this test. The first one – and my favorite topic – is that Discovery is broken on Alexa and audio ads could be a way – but not the only way – to fix it. Then, of course, this would open monetization opportunities for Amazon. They invested and keep investing so much into Alexa that they can’t completely ignore monetization be it via a 30% cut on In-Skill-Purchase, or Advertising on the platform.
The test proposed to hand-picked advertisers the possibility to run interactive ads: listeners could speak to the ads and tell Alexa to add products to shopping carts and other functions. Something trackable, measurable and that is not possible with radio. For Amazon, the stated goal of the test was to better understand customer response to a new audio advertising experience. As an advertiser puts it “Amazon hasn’t quite figured out how to insert the ads in a way that makes sense and they haven’t thought out the usability for brands”.
Looking ahead, this is a great move. Those audio ads address a niche audience and could offer fantastic targeting options. This could also be an opportunity to start fixing discovery 😉 and generate significant income. Spotify makes around $140m a quarter with audio ads and Pandora has been testing a similar setup on smart speakers. We are still far from the expected $2 billion revenue from Apple Search Ads (the search on the App Store), but it’s a beginning.
Well, this is the main reason behind me being late on posting this newsletter. As you know, I’m obsessed with the discovery of voice apps and the discovery of Alexa skills in particular. I have run countless marketing experiments for my own skills to measure such things as the conversion rate from paid campaigns, the impact of keyword ranking in your skill description….etc. I have always found that the missing link was a proper, easy to user attribution and analytics service. Attribution is a very complex topic in itself and a deterrent for many. What we have built is based on years of experience with attribution of TV campaigns, managing marketing budget in the 10’s of million euros as well as a deep understanding of the Alexa skill store.
Brands, skill studios, and voice startups are signing up for the service every day and if you happen to have a skill, I think you should too…