SoundHound has raised a big $100M round to take on Alexa and Google Assistant

Published May 3, 2018

As SoundHound looks to leverage its ten-plus years of experience and data to create a voice recognition tool that companies can bake into any platform, it’s raising another big $100 million round of funding to try to make its Houndify platform a third neutral option compared to Alexa and Google Assistant.

While Amazon works to get developers to adopt Alexa, SoundHound has been collecting data since it started as an early mobile app for the iPhone and Android devices. That’s given it more than a decade of data to work with as it tries to build a robust audio recognition engine and tie it into a system with dozens of different queries and options that it can tie to those sounds. The result was always a better SoundHound app, but it’s increasingly started to try to open up that technology to developers and show it’s more powerful (and accurate) than the rest of the voice assistants on the market — and get them to use it in their services.

“We launched [Houndify] before Google and Amazon,” CEO Keyvan Mohajer said. “Obviously, good ideas get copied, and Google and Amazon have copied us. Amazon has the Alexa fund to invest in smaller companies and bribe them to adopt the Alexa Platform. Our reaction to that was, we can’t give $100 million away, so we came up with a strategy which was the reverse. Instead of us investing in smaller companies, let’s go after big successful companies that will invest in us to accelerate Houndify. We think it’s a good strategy. Amazon would be betting on companies that are not yet successful, we would bet on companies that are already successful.”

This round is all coming in from strategic investors. Part of the reason is that taking on these strategic investments allows SoundHound to capture important partnerships that it can leverage to get wider adoption for its technology. The companies investing, too, have a stake in SoundHound’s success and will want to get it wherever possible. The strategic investors include Tencent Holdings Limited, Daimler AG, Hyundai Motor Company, Midea Group, and Orange S.A. SoundHound already has a number of strategic investors that include Samsung, NVIDIA, KT Corporation, HTC, Naver, LINE, Nomura, Sompo, and Recruit. It’s a ridiculously long list, but again, the company is trying to get that technology baked in wherever it can.

So it’s pretty easy to see what SoundHound is going to get out of this: access to China through partners, deeper integration into cars, as well as increased expansion to other avenues through all of its investors. Mohajer said the company could try to get into China on its own (or ignore it altogether), but there has been a very limited number of companies that have had any success there whatsoever. Google and Facebook, two of the largest technology companies in the world, are not on that list of successes.

“China is a very important market, it’s very big and has a lot of potential, and it’s growing,” Mohajer said. “You can go to Canada without having to rethink a big strategy, but China is so different. We saw even companies like Google and Facebook tried to do that and didn’t succeed. When those bigger companies didn’t succeed, it was a signal to us that strategy wouldn’t work. [Tencent] was looking at the space and they saw we have the best technology in the world. They appreciated it and were respectful, they helped us get there. We looked at so many partners and [Tencent and Midea Group] were the ones that worked out.”

The idea here is that developers in all sorts of different markets — whether that’s cars or apps — will want to have some element of voice interaction. SoundHound is betting that companies like Daimler will want to control the experience in their cars, and not be saying “Alexa” whenever they want to make a request while driving. Instead, it may come down to something as simple as a wake word that could change the entire user experience, and that’s why SoundHound is pitching Houndify as a flexible and customizable option that isn’t demanding a brand on top of it.

SoundHound still does have its stable of apps. The original SoundHound app is around, though those features are also baked into Hound, its main consumer app. That is more of a personal assistant-style voice recognition service where you can string together a sentence of as many as a dozen parameters and get a decent search result back. It’s more of a party trick than anything else, but it is a good demonstration of the technical capabilities SoundHound has as it looks to embed that software into lots of different pieces of hardware and software.

SoundHound may have raised a big round with a fresh set of strategic partners, but that certainly doesn’t mean it’s a surefire bet. Amazon is, after all, one of the most valuable companies in the world and Alexa has proven to be a very popular platform, even if it’s mostly for nominal requests and listening to music (and party tricks) at this point. SoundHound is going to have to convince companies — small and large — to bake in its tools, rather than go with massive competitors like Amazon with pockets deep enough to buy a whole grocery chain.

“We think every company is going to need to have a strategy in voice AI, jus like ten years ago everyone needed a mobile strategy,” Mohajer said. “Everyone should think about it. There aren’t many providers, mainly because it takes a long time to build the core technology. It took us 12 years. To Houndify everything we need to be global, we need to support all the main languages and regions in the world. We built the technology to be language independent, but there’s a lot of resources and execution involved.”