People.ai: How to find an investor at Burning Man and raise sales by 40%

This is a story of the success of a startup with Ukrainian roots. Oleg Rogynsky, a talented Ukrainian entrepreneur,  and his company People.ai achieved incredible sales and recognition thanks to artificial intelligence technology and they continue to innovate.

Website: https://people.ai

Founders: Oleg Roginsky

Offices: Kyiv (Zhylyanska 75), Los Angeles, San Francisco, London, Atlanta, New York

Company valuation: $ 500 million

Total funding: $ 100 million

Employees: 146-200 people

Year of foundation: 2016

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From idea to realization

Our story begins in Dnipro, the city where the future founder of People.ai Oleg Rohynsky was born and raised. Being ambitious by nature, he moved to United States as a teenager to study at Boston University as a  Business Administration major. In the sophomore year, Oleg decided to start his own small business, publishing a magazine with photos from the entertainment scene. After a while, Oleg realized that not many wanted to buy his printed magazine due to a high price tag and began publishing online. It turned out, however, that in 2004 humanity was not yet ready for such an invention. Success was waiting for another startup, one that would be founded in a neighbouring university in Boston - Facebook.

After graduation from BU, Oleg thought about what to do next, as there was no work in Boston and he did not want to return home. A door opened in Canada, where it was much easier to obtain residency and find a job. In a few months, he joined Nstein Technologies as a sales manager, getting the job in part because of his experience operating the publishing business during college years.

Oleg Roginsky in an interview for Bloomberg Technology  https://youtu.be/EzDQTM2t_C8

A few years later, Oleg realized that the homeland of startups was still the United States and decided to go back and start working on his first startup Semantria - an application that could analyze information on social networks and give various recommendations to businesses. Semantria was later sold for $ 10 million, and Oleg went back into the corporate world. After several years working in Silicon Valley at H2o.ai, he realized that this was not what he wanted to do. He decided to visit  Burning Man, where he met a mysterious friend who pushed him to quit his job and left the envelope with a check for $ 150 thousand.

People.ai is a CRM application that helps companies increase sales by finding examples of successful interactions with customers. The software connects to all systems used by the sales staff. Analyzing telephone conversations, e-mails, and online meetings, artificial intelligence helps to examine employees' work. It prepares a report on which areas need to improve their work to increase sales. For example, if the last transaction amount of a sale was small, the bet is made on the number of customer outreach activities; if the sales amount was high - attention is turned to quality of sales interactions. Once implemented, the platform calculates the sales effectiveness for each sales person. As the result, the People.ai client's profit increases by 2-3 times.

One of the peculiarities of People.ai’s own sales process is that they invest thousands of dollars in project presentation to potential customers and building a proof-of-concept (POC) to raise the interest of the client. After the POC, the client's investment pays off in a week. That is why People.ai does not work with small businesses with less than 1,000 people. In such companies, the sales department is 100-200 people who can be easily trained. Development of sales scripts for each sales segment takes 3-9 months. That's why People.ai looks for big companies with large enough budgets to do it profitably. It takes from 4 months to 2 years to close a proof-of-concept.

Investments

Nick Belogorsky was the first investor in the company  and he also helped recruit software engineers. He was the first to believe in this “crazy” idea and support Oleg’s dreams.

In 2017, during their Series A, People.ai received $ 7 million from Lightspeed Venture Partners, after which Andreessen Horowitz invested $ 30 million in Series B. In the Series C round in 2019, ICONIQ Capital invested $ 60 million to improve the software. The company has been around for less than three years, however, investors estimate its valuation at nearly $ 500 million. According to Roginsky, after another round, the company will be ready for an IPO. TechCrunch estimates that the company's profits have increased almost five times over the past year, and thanks to the service, its customers have achieved sales totaling $ 100 billion.

According to TechCrunch, People.ai tried to raise several million dollars as part of a Debt Round. The outcome of the deal is, unfortunately, unknown. Nevertheless, the company still has a share of  the $ 60 million that they raised in 2019. That is why the company preferred debt financing, so as not to erode the equity of existing shareholders. 

David Jan, the founder of ABBY, called Oleg’s company  “a 100% future Unicorn” ( a company with a capitalization of $1 billion or more). Ukrainian startups such as Grammarly, GitLab, Ring have already achieved this title. According to David, Oleg knows how to make products and knows what the market wants. After analyzing the company's data, People.ai helps its clients spend less and earn 10 times more. This is an ideal formula that every company needs.

CRM system People.ai.

Locations in Ukraine and the world

Today, People.ai's offices are located in San Francisco, Atlanta, Kyiv, London, New York, and Los Angeles. The company is headquartered in San Francisco, where the vast majority of employees work. Choosing locations was a strategic decision: since the company works with the B2B segment, they need to communicate with their customers as easily as possible, and that is why they open so many locations outside of Ukraine. People.ai’s  customers include Dropbox, Lyft, Uber, Twitter, and other technological companies.

Currently, the Kyiv office has about 30 employees, and thanks to the latest $ 60 million investment, the company plans to expand its headcount to 100, most of whom will be engineers. According to Oleg, Ukraine can become a base for the support department and a place for the sales team to serve European customers.

Achievements

People.ai's team is proud to be in the top Y Combinator companies. However, achievements do not end there. According to Aragon Research, People.ai also carries the title of "The Happiest Little Company in the United States" as well as a "Hot Vendor". Forbes included the company in the list of the most promising companies working on artificial intelligence. Oleg Rogynsky assures that his greatest achievement and value is his People.ai team. In 2019, the startup was recognized as the best place for Equity and Inclusion and received an award for the best corporate culture. The team also was recognized as one of 10 best companies for minorities. This includes people with disabilities, LGBT people, immigrants, people of different religions and backgrounds. This is very important because women are often discriminated against in the IT business, and many hold the belief that the IT industry is not a place for women. According to Oleg, there is no direct, open discrimination in the United States, but prejudice appears from time to time.

Plans for the future

According to Oleg, all industries are rapidly transforming, moving every business function to the Internet. The People.ai team believes that 2021 is when this transformation will make a quantum leap forward, as data automation meets artificial intelligence's practical use. In 2021, the startup will automatically collect data on market activity and how email, video conferencing, and meetings affect sales. This will facilitate the practical use of artificial intelligence. 

The Ucluster team hopes that you were inspired by the People.ai story and are ready for a new batch of startup stories. Next time we will talk about BIO BIN - a mobile application that helps improve the environment and teaches consumers to reduce food wastage.