6A East Partners’ Post

The future of Ops is being taught to us by fintech startup Klarna. Currently prepping for an IPO, the company has released a series of stunning updates, illuminating an extraordinary set of operational and financial strides achieved with the tools they are building on the back of OpenAI’s GPT models. Their approach eludes to the opportunities for startups to scale revenue while simultaneously reducing costs by deploying native, AI-centric systems to manage their operations. Klarna’s new customer-facing AI assistant independently accommodates nearly 70% of their customer requests in only its first few months of rollout. "Our AI assistant now performs the work of 700 employees, reducing the average resolution time from eleven minutes to just two while maintaining the same customer satisfaction scores as human agents.” Klarna CEO Sebastian Siemiatkowski Eleven minutes to two. Their repeat inquiries are down 25%. That’s critically insane (🤖💥🤯🌋). To be clear, it’s not 700 seats or instances of the application performing the work of 700; it’s a single application performing all the work. This has enabled the company to reduce customer service headcount by 50% and project their global workforce to drop from approximately 3,800 to 2000 employees in the time ahead. This forecast follows an initial reduction of 1,200 roles from 5,000 to 3,800. The assistant will drive $40 million in additional profit to the company's bottom line. Revenue per employee has grown by 73% over the past twelve months. Then, this week, the company announced it has replaced its Salesforce and Workday instances with internally developed AI tools. I don’t think the general market understands yet how seismic this shift will be. I’m sure I don’t fully comprehend what’s coming, either. But I do know the current systems so many companies rely upon were built for workflows that required human engagement, which will become irrelevant. It will be difficult for legacy providers to foundationally reshape their offerings without starting from scratch entirely. This creates a significant opportunity for startups. Looking to large, legacy enterprises for indicators of AI’s immediate value is also a mistake. Like the software companies, their entire structures are designed for workflows and decision-making that won’t make sense anymore. And it will take a long, long time to disassemble these bureaucracies accordingly. Therefore, if you want to know about the future of Ops as it relates to AI, you have to look at startups and companies that are small, trying to become big. If you want to understand what the future will be, look to the dreamers trying to build it anew. The future is coming. John Big thanks to Linas Beliūnas for all the amazing Klarna coverage. Follow him for incredible Fintech updates and an amazing newsletter! If you like my stuff a ♻️ would be great! #operations #startup #fintech #AI #founders #future

Stripe's Valuation Soars, Klarna's AI Revolution, and Startup Shutdown Services Rise: Explore the latest fintech trends: Stripe's valuation leap, Klarna's AI assistant, and the rise of startup shutdown services, ...

„According to an analysis of payments information from fintech group Stripe, top AI groups are reaching millions of dollars in sales within a year — far faster in a start-up’s life cycle than comparable non-AI tech groups.“ The big question this year was: can AI companies make money? Stripe’s latest data says yes. If that’s the case, the tremendous investments in data infrastructure could yield positive ROIs in the future. Link: https://on.ft.com/3MYEPfP #ai #startup #bigtech #investing #deeptech

👉 https://lnkd.in/gnb4RQ5U Top Startup News: Paytm's Problems On, Angel Tax To Be Reformed & More What are the latest innovations & shifts in the Indian startup scene? Discover how Google’s AI is breaking language barriers and what’s next for Paytm amidst investor pullouts. #google #paytm #zomato #startupnews #startupworld #technews #ai #dpiit

At our latest #GenLA meetup, Drew T., Vice President of Consumer Experiences at PayPal, and Cosmin Nicolaescu, former Chief Technology Officer of Brex, joined Lightspeed Partner Justin Overdorff for a fireside chat about the challenges and opportunities AI brings to fintech. Here are a few key takeaways from their discussion: → Although there have been significant advancements in AI and fintech, with models achieving much lower error rates than before, the remaining errors are more challenging to detect and often vary across different models. → If AI hasn't already transformed the hiring process and team evaluations, it will soon. With the rise of ChatGPT and other LLMs, companies should adjust their hiring process to deal with these changes. → Companies should start reevaluating skills that will increasingly be done by AI, such as certain engineering tasks that will probably be done automatically in the future. However, the devaluation of some skills will likely be offset by other skills becoming more valuable. Read the full blog here: https://lnkd.in/eHXP96zw

UNICORN WATCH THIS WEEK: In the wake of Thrasio's Chapter 11 filing, e-commerce aggregators Razor Group and Perch have combined and now boast an enterprise value of $1.7 billion. Concurrently, Monzo has confirmed a successful $430 million funding round that it hopes will propel its expansion into the US market. Monzo Bank $430 million raise elevates its valuation to $5 billion with CapitalG spearheading the investment. Chief Executive TS Anil stated that the capital infusion would fuel the company's entry into the US market, following an unsuccessful attempt in 2021. Ebury is in discussions with banks as it considers a London initial public offering that could value the company at up to $2.5 billion. The cross-border payments platform is in the early stages and engaged in the pre-RFP process, with deliberations still underway. Razor Group has acquired Perch while simultaneously raising $100 million in a funding round spearheaded by Presight Capital. The merger of these ecommerce aggregators now sees them with a combined enterprise value of $1.7 billion. Mews secured $110 million in a growth round, valuing the company at $1.2 billion post-money, with Kinnevik leading the investment. The company focuses on providing SaaS solutions tailored for the hotel industry, boasting a clientele of over 5,000 hotels. Perplexity is in the final stages of securing a new funding round, which would value the company at $1 billion, roughly doubling from its previous financing round just a few months ago. The AI startup is determined to rival Google in its web search capabilities. MinMax AI is on the brink of finalizing over $250 million in funding for its AI solutions. Established in China in 2021 by former employees of SenseTime 商汤科技, the company is now positioned to receive funding from an entity associated with Tencent. Axonius picked up $200 million in a Series E extension round, led by Accel and Lightspeed. Positioned as a frontrunner in cybersecurity asset management, Axonius surpassed $100 million in annual recurring revenue in 2023. Salla E-Commerce Platform raised $130 million in funding from investors such as Investcorp and STV. The company builds websites and provides online payment management for ecommerce businesses. Notably, Investcorp made its investment through a fund specializing in pre-IPO companies. Claroty, the industrial cybersecurity firm, secured $100 million in financing as its CEO sets sights on an IPO. The company caters to organizations with extensive operational technology environments and specializes in cyber defense tools. Deel, a startup specializing in human resources and payroll services, has acquired PaySpace, a South Africa-based HR company. In addition to announcing the acquisition, Deel revealed that its annual recurring revenue has surpassed $500 million, marking a 25% increase since November. #technews #preipo #privatemarkets #unicorns #ipo #venturecapital

🚀 #AI #startups generate #money faster than past hyped #tech companies, according to Stripe, the fintech group in #SiliconValley that makes payments for other companies. Their #sales are growing much quicker. So you could see them making #money in lots of interesting ways. Madhumita Murgia, from the Financial Times, explains why #AI native #startups are bringing in #revenue quicker than any other buzzy #technology that’s come before. #business #economy #fasterthanever #paradigmchange

Why Payments and AI Don’t Mix This week, the biggest VC firm in the world Andreessen Horowitz raised a new fund, of $7.2 Billion. The interesting thing about this fund is that it is mostly focused on investing in tech startups in the Artificial Intelligence sector. The bulk of this funding, $3.75 billion, is allocated to be invested in scaling startups, while $1.25 billion will go to AI infrastructure companies and $1 billion to startups developing apps on top of these infrastructures. However, the one thing that I took away from it was this particular quote by Ben Horowitz: “Each area requires deep expertise, so it’s not wise to try to cross-train someone in, for example, Games and Infrastructure,” The reason why, is that in Payments, I have experienced the exact same thing. Let me explain… In 2018, I wrote an article on Medium called The Algorithmization of Payments, in which I predicted the importance that AI will have on the Payments industry by explaining how the plethora of data is ideal for developing new products and features. Fast-forward to 2022, after helping over 50 companies develop Data Strategies, and implement infrastructure like Amazon Web Services (AWS), Google Cloud, and Snowflake, the whole industry changed overnight when OpenAI launched ChatGPT. This was a catalyst that helped change the minds of C-level executives, to AI seriously and build infrastructures to develop new AI-driven features. While I haven’t been deeply involved in AI projects in the last 6 months or so, I still research and read a lot of work about them. What I took away from Ben’s quote was that if we want AI to succeed and become a multi-billion dollar company, we need to stop mixing Payments with AI. Let me explain further. I think that what Ben is alluding to is that for AI to work, you have to build your infrastructure from the ground up to support it instead of building it on the side or just using an API. However, that is what we have been seeing in Payments for the last couple of years. Companies are swept up in the hype and drastically change the wording on their website to “proof” that they are an AI-driven company. From Klarna, exchanging 700 people for their new customer service chatbot, Ramp's integration of Microsoft Copilot, or Brex launching an AI assistent to help companies manage their expenses. Apps that are great but, nowadays, wouldn't be enough reason for AZ16 to invest in. So, what should you do, if you were thinking about launching a startup and wanted to leverage AI? I think you should either focus on creating foundational models or identify which AI platform infrastructure will do well and dedicate your company to building an App on top of that. Let me know what you think. Will AI help current Payments companies become better, or is this the beginning of a new wave of Payments startups with AI in their DNA? P.S. Check out my newsletter https://buff.ly/3RXzt7Z

Klarna announced that their AI system was doing the work of "700 customer service agents" and doing it faster and more accurately. They even replaced SalesForce and Workday with in-house built AI systems. Goldman Sachs and Morgan Stanley are introducing AI tools that will replace much of Wall Street’s entry-level white-collar work. And it’s not just large businesses. Even restaurants are now using AI tools to book reservations. AI is eating enterprise SaaS. For Founders, using an AI first approach in their products is not really a choice anymore. It’s a matter of survival for their product not in the Long Term, rather in the short to medium term. #AI #Founders #Startup #Scaleup

We’ve been sharing a lot of our research on AI agents and the infrastructure needed to truly bring them to life. So today it is incredibly special to announce our partnership with David Singleton and his new company, /dev/agents 🚀 The potential of AI in our daily lives is enormous, but to unlock it, we need the right foundational infrastructure: security & privacy, intuitive user interfaces, robust data operations, and a world-class developer platform. It takes an entirely new operating system. And who better to build it than David, Hugo, Ficus, and Nicholas —a team that both built the backbone of Android and scaled Stripe to process over $1 trillion in annual payments and handle 500 million API requests daily. We couldn’t be more excited to join one of the most exceptional teams in AI on this journey to build the OS of the future—one that empowers everyone to focus on what matters most to them by making agents a reality. Let’s go! #ai #agents Former Google, Stripe Executives Raise $56 Million for AI Agent Startup https://lnkd.in/eq_ShfkD