Posts

After Facebook Messenger opened its platform to chatbots in 2016, it became the era of chatbots — more than 12,000 of them were deployed on Messenger by the end of that year. One year later, the number has risen to 100,000.

Despite rising popularity of chatbots around the world, they didn’t take off as expected in Southeast Asia given the region’s affinity for texting through messaging apps. This was especially true in the region’s biggest market, Indonesia.

Talent remains one of the biggest hurdles for AI or any other type of tech development in Indonesia, however, it is the inconsistency of the Indonesian language that presents an even greater challenge in developing the Natural Language Processing (NLP), that powers the chatbot.

According to Irzan Raditya, co-founder and CEO of Kata.ai, an Indonesian B2B chatbot service provider that raised $3.5 million last year, more industry partnerships could be a solution to these challenges.

“We need more collaboration between the service providers, API providers, and more local developers studying AI,” says Raditya. “Without the human resource, it will be impossible to make this technology a reality.”

Launched in October 2016, Kata.ai actually evolved from a free text-based personal concierge service called YesBoss that recorded over 100,000 users at peak.

Before the startup’s pivot, the company struggled to keep up with customer demand and chose to move to a more sustainable business model by targeting a new segment – B2B.

ecommerceIQ speaks with Raditya to understand chatbots, his thoughts on its most promising applications and how his turbulent experience with YesBoss helped build Kata.ai to its present state.

Learning the ropes

Right from the start, the four founders of YesBoss were realistic about their venture.

“We understood that it wouldn’t be scalable (to provide a concierge service) without AI,” admits Raditya.

“And in order to build the algorithms, you need data and we collected tons of data from YesBoss.”

“We learned how to make people’s lives easier through conversations gleaned from our concierge service answering different kinds of customer requests, be it booking a plane ticket or shopping online. Along the way, we learned we wanted a business that was more impactful and scalable.”

With the man-power heavy B2C service provided by YesBoss no longer active, Raditya saw an emerging opportunity in the chatbot space in Indonesia.

Sitting on a bank of data, Kata.ai became the first chatbot provider in the local Indonesian language.

“By studying all the texts in Indonesian from YesBoss — the uniqueness of abbreviations, the slang, and complexity of certain phrases — we did the dirty work and spent over a year researching machine learning to build a comprehensive algorithm compatible with the needs of the Indonesian language NLP,” says Raditya.

Now equipped with a chatbot able to understand the local language, what was the team going to do with it?

Serving the enterprises

As a conversational AI platform targeted at enterprises, Kata.ai develops a chatbot for companies to easily handle incoming customer requests and facilitate ecommerce in Indonesia.

One of the brands that has developed a chatbot with the company is Unilever.

Using a female persona named Jemma, the chatbot on LINE acts as a virtual assistant that liaises with customers on behalf of Unilever where customers can chat about everyday things including entertainment news and/or ask for beauty recommendations.

Raditya says the chatbot is popular among female customers who like to ask for relationship and fashion tips.

“As of now, Jemma has befriended over 2 million users on LINE and recorded over 200 million conversations to date within a span of one year since its launch,” says Raditya. “The longest chat session actually lasted for four hours.”

Veronika is chatbot created by Kata.ai for Indonesia’s biggest telco company Telkomsel.

Another chatbot that Kata.ai helped build is Veronica, the legendary brand persona of Indonesia’s biggest telecommunications provider, Telkomsel.

By texting with Veronica on LINE, Facebook Messenger, and Telegram, customers can access product information, Telkomsel’s latest promotions, a live customer agent, as well as facilitate transactions such as phone credit top ups, buy data packages, make bill payments and reserve appointments with the company’s nearest offline customer service center.

Envisioning a platform for all

If the company’s enterprise solution provides brands with tailored chatbots, Kata’s newest venture released last month, Kata Bot Platform, hopes to provide developers with a enterprise-grade framework to help them create chatbots and reduce costs on tech development and research.

“By releasing our platform to the public, we want to solve the ecosystem problem. A lot of Indonesian developers aspire to incorporate chatbots into their businesses but face the daunting task of building it from the scratch because there’s almost no platform that caters to the Indonesian language,” says Raditya. “Kata.ai provides the infrastructure so they can focus on building a good customer experience for the business.”

NLS, one of the features available on Kata Bot Platform

He also encourages all businesses to use the platform as it can accommodate up to one billion messages and isn’t restricted to only startups.

Do chatbots live up to the hype?

“We believe improving the technology of chatbots is important to capture an opportunity that exists in Indonesia’s strong chat culture and major shift in the interaction between people and technology.”

This shift, according to Raditya, will see people utilizing less apps as it impedes the customer experience; from installing the app, registering for the service, learning how to use it, constantly having to update to new versions, etc.

Chatbots, on the other hand, provide a more efficient way for users to interact with the service provider without having to familiarize themselves with a new interface as most Indonesians already know how to use popular messaging apps.

“Chat is the new standard of user interface.”

The CEO himself has a favorite AI-powered personal assistant service he uses to save time from shuffling through email chains based in Singapore called Evie.ai.

“Engaging and intelligent chatbots allow businesses to turn these channels from information centers to profit centers, as shown with the case of Telkomsel. They can now monetize an audience of over 10 million connected to their social channels by selling data packages — something that they were unable to offer before,” shares Raditya.

“If you take a look at consumer technology, changes are usually predicted in ten year cycles. The dotcom boom in 1997 changed the way people conducted business with websites. In 2007, Apple changed the landscape with the launch of the iPhone and app store,” explains Raditya. “During these periods, we saw companies coming out as winners carrying high valuation and delivering high impact to the economy.”

“Indonesia is always left behind.”

“With analysts predicting AI to become the one the driving consumer technology on 2017 onwards, Kata.ai can spearhead the wave of incoming local entrepreneurs by being the breeding ground for a new generation of botpreneurs,” says Raditya.

His “big picture” approach was sparked during the Microsoft Accelerator program in Bangalore last year, in which all founders participated. The program provided 14 B2B startups with Microsoft’s resources and network to help accelerate their growth and Kata.ai was a finalist out of 1,500 applicants.

Kata’s founding team. (L-R) Wahyu Wrehasnaya (CFO), Reynir Fauzan (CMO), Irzan Raditya (CEO), Ahmad Rizqi Meydiarso (CTO).

“We learned to see things from right to left, which meant focusing on the goal first and working backwards to the process in order to achieve it,” says Raditya. “Another thing we learned is how to sustain innovation by being the Category Creator, Category Sustainer, and eventually the Category Destroyer.”

“The program also gave us experience with the technical side of things, such as how to scale our infrastructure effectively to serve millions of customers.”

Although the company’s focus is currently on Indonesia, Raditya isn’t counting out expansion to other countries.

“Right now, we’re focusing on building chatbot technology that can offer customers a next level of service that is personalized using historical data,” closes Raditya. “But who knows, in one or two years, I think voice could be an interesting medium as well.”

Here’s what you should know today:

1. Alibaba experiments on cash-free store Tao Cafe

Alibaba has recently demonstrated an experimental cashless cafe, using AI and data technologies built-in the Alipay e-payment service.

Called the Tao Cafe, this experimental cashier-less and cashless coffee shop is another feature for Alibaba to outline its technology capability bridging the world of offline and online shopping, as said by Chris Tung, Chief Marketing Officer of Alibaba Group.

Users can use Taobao app to scan QR code in front of the shop where a camera armed with face-recognition to detect their identity. The link to their Taobao account also enables them to shop supported by voice-recognition technology. These technologies of Alibaba have effectively got rid of both queuing and cash in the context of this store.

“This is one example where Alibaba can provide its technology to improve users’ experience to retail shop,” Mr Tung said.

Read the full story here.

2. Amazon pace to break sales record on Prime Day

Amazon’s Prime Day this year is set to be the biggest shopping event in its history by sales.

The company claimed third-party sellers sold over 50% more items on the site by noon local time than in the same time last year. Although not disclosing the figures, analysts estimated last year’s event brought well in over $500 million.

The company also said the customers ordered three times as many Echo-family speakers than during Prime Day 2016, which at the time broke sales records for the device. Research firm eMarketer has forecast the number of the US consumers actively using voice-controlled devices will more than double this year to 35.6 million.

Read the full story here.

3. Zanroo poised to be the first Thai tech unicorn

Thai marketing technology startup, Zanroo, expects to be the first Thai unicorn startup by 2019 when it will have a presence in 40 global markets and obtain $30 million in revenue or close to 1 billion baht. Today, the company is active in 15 markets and its clientele includes more than 300 brands in various industries.

The company specialises in “insight discovery” provides its services spanning across social listening, social engagement and consultancy which enables real-time performance and data tracking complete with analyses and trends to help brands maximise the benefits of actionable insights in their marketing moves, crisis prevention and management, etc.

Zanroo recently raised $7.4 million in its Series A financing round from private funds, institutional investors, notable business owners and individuals to finance inroads into martech across Asia, the US and Europe.

Read the full story here

 

Here’s what you should know today.

1. Intudo Ventures venture capital debut with $10 million of capital fund

The launch debut fund is contributed by undisclosed limited partners as the founding general partners at leading venture capital firms, corporate investors, and top-tier family offices and founders from the US, Indonesia, Hong Kong, Taiwan, and Singapore.

Intudo Ventures targets 12 to 16 early stage companies in the field of consumer, finance, healthcare, education, and media led by local founders and returnee talents from overseas market.

The founders has invested in dozens early-stage companies in Silicon Valley, China, Hong Kong, Taiwan, Singapore, and Indonesia since the 1990s. Their portfolio includes PayPal, SpaceX, Palantir Technologies, Netscreen Technologies, and Fortinet.

Read the full story here.

2. The biggest private bank in Indonesia BCA launched chat-based virtual assistant

Since its launch on February, the virtual assistant provided by Indonesia’s BCA (Bank Central Asia) has attract more customer because of its faster response time compared to the bank’s conventional call center.

The AI-based service has gained more than 180,000 users from various messenger apps, including Facebook Messenger, Line, and Kaskus Chat.

Through the virtual assistant, customers can also access a range of information, including exchange rates, transaction information and appointments for credit card and mortgage applications.

Read the full story here.

3. Alibaba launches Tmall World to serve overseas Chinese

Alibaba Group has launched Tmall World, a service aimed at giving 100 million overseas Chinese access to 1.2 billion products it sells through its Mobile Taobao app and other online platforms.

Tmall World is primarily targeting Hong Kong, Malaysia, Singapore and Taiwan, all of which have significant Chinese-speaking populations. It will offer logistics and localisation for each market.

Alibaba is also aiming to tap more English-speaking consumers in Southeast Asia. Under Tmall World, Chinese speakers can tap into Tmall and all other Alibaba marketplaces through PC or mobile devices.

Hong Kong users will see expanded product categories, and in Malaysia Alibaba is launching a Tmall shopping festival from June 18 to 20, offering discounts to customers in Mainland China and overseas.

Jack Ma says the company intends to have 2 billion customers by 2036, with a large proportion living and shopping outside China.

Read the full story here.

 

Here’s what you should know today.

1. Malaysian VC association joins forces with regional counterparts

The Malaysian Venture Capital & Private Equity Association (MVCA) is now part of the ASEAN Venture Council (AVC).  With four of ASEAN’s key VC associations now on board, the AVC could have a positive impact on growth prospects for startups across the bloc.

By linking the four national bodies together, the AVC is intended to facilitate greater knowledge sharing and collaboration among VC firms and early-stage businesses throughout the region.

This could lead to a boost in tech investment throughout Southeast Asia

While VC funding more than doubled quarter-on-quarter to US$191.6 million in Q1 2017, it fell far short of the US$330.6 million invested across 65 deals a year previously.

Read the rest of the story here.

 

2. Rocket Internet sells 51% of fashion site Namshi to Dubai’s Emaar Malls for $151 million

Today Rocket Internet announced that it has sold 51%  of Namshi, its Middle Eastern Amazon clone, to Emaar for $151 million.

Emaar lost out on buying online retailer Souq.com when Amazon got ahead of the game.

Emaar Malls has long been looking to ramp up its presence on the web and said that it will use the new asset to expand its logistics and expand more brands to selling online. Emaar earlier this month also acquired Dubai-based online marketplace JadoPado, and it’s also involved in a joint venture with Yoox Net-A-Porter to expand the latter company’s business into the region.

Read the rest of the story here.

 

3. Pinterest launches a ‘Shazam for food’ feature

Pinterest has announced a new recipe-finding feature that makes use of computer vision to tell you about a dish when you point your smartphone camera at it. The company is billing the feature as a way to perform real-time “dish recognition.” The new upgrade is eerily similar to the app from HBO comedy, Silicon Valley.

This is all part of a broader artificial intelligence push in the tech industry to apply machine learning techniques to everyday life.

By training neural networks on huge mounds of data and translating that into a real-time algorithm, tech giants like Google, Facebook, and Microsoft are now developing software products that can digest and understand the world, from text to photos to even videos.

Read the rest of the story here.

 

 

 

 

Here’s what you should know today.

1. Didi Chuxing, the Uber of China, confirms $5.5B raise for global and AI push

The company confirmed fundraising rumors today; it has raised a fresh $5.5 billion to continue global expansion and to invest deeper into emerging areas like artificial intelligence to bring more advanced systems to its transportation service.

The company didn’t close valuation but sources very close to the company confirm to us that it is over $50 billion, with new investors Silver Lake Kraftwerk joining previous investors.

Didi has also launched a lab in Silicon Valley.

As a global technology leader, DiDi is striving to advance the transformation of transportation and automotive industries through active internationalization plans.

What’s interesting also to contemplate is whether DiDi will finally be expanding its footprint outside of China. To date, the company has done so only in the form of partnerships, intended to make for a more seamless experience to travellers as they go outside their home market but want to continue to use the same app and payment system as before.

Read the rest of the story here.

 

2. Silicon Valley innovation builder Singularity U launches Singapore chapter

Technology and innovation builder Singularity University (SU) officially launched its Singapore chapter this week.

Silicon Valley-based SU is described as a community of thinkers and innovators that apply “exponential technologies to address humanity’s grand challenges.” It’s a lofty mission statement.

One of the areas of focus will be better ways to deliver healthcare tools and services to people in Asia, says Lee Chon Cheng, a member of the Singapore chapter’s leadership team. That’s why SU Singapore collaborated with global medical technology company BD for this challenge.

The global outlook is key to SU’s mission to solve world problems.

Read the rest of the story here.

 

3. Recommended Reading: Banks are loosening up internally so they can work with startups

As banks and financial technology startups collaborate more closely, banks are beginning to pull apart the image of their institutions as segmented bureaucratic machines that can’t innovate quickly.

With public confidence in them in the U.S. below 50 percent across the political spectrum, banks have a branding problem — one that gets even more problematic when they have to work with those outside the industry.

Wells Fargo is one of the banks that has taken active interest in facilitating dialogues with startups. While most most major banks have accelerator programs, Wells Fargo said one of the focuses of its startup program is helping banks understand startup culture and vice versa.

Read more about how banks in the US are re-branding themselves here.

 

Thailand’s startup media outlet Techsauce published two detailed reports this month; Investor Guide Q1 2017: Thailand Tech Startup Report and its annual Southeast Asia’s Top 75 Fintech Startups Report. What were the key takeaways to know about Thailand’s startup ecosystem and Southeast Asia’s tech investment landscape? We take a look at both reports:

How did Thailand startups do in terms of funding?

An introduction to Thailand

Total funding figure in Thailand is getting bigger – no less than $85.2 million as seen in the chart below. The exact number can’t be pinpointed as there were several undisclosed Series B investments.

Notable funding mentions: 

  • E-book platform Ookbee raised $19 million from Chinese giant Tencent to create a digital content ecosystem in Thailand
  • Fintech startup Omise raised $17.5 million led by Japanese firm SBI Investment
  • Ecommerce marketplace Orami (now Moxy) raised $15 million from Facebook’s Eduardo Saverin B Capital
  • 3 food tech deals were made in 2016. At the beginning of 2017, B2B food supplier platform Freshket has raised an undisclosed six digit funding round
  • Corporate Venture Capital was a trend in 2016 that saw numerous corporations shift focus to technology and innovation as both direct investors and limited partners. This trend is expected to continue well into 2017 with the emergence of property tech in Thailand, pioneered by real estate giant Sansiri

In the graph below, you can see that the number of funded startups has shot from 3 to 75 in only four years. The number of active angel investors and the number of VCs have also grown in tandem.

Data from the report also shows that ecommerce still remains the top category for investors and increased steadily on a year-to-year basis. The second category is logistics with funding raised by aCommerce, Giztix and more.

 

Only two months into 2017, and already eight startups have already raised funding this year.

The diversity of Thai startups attracting investors show that there is more room for verticals such as education tech (edtech) and travel tech.

The report also predicts that by Q2 2017, there should be more funding given to a variety of startups in different sectors and investment opportunities in Thailand’s ecommerce landscape.

Southeast Asia’s top fintech trends

  • While core technologies such as blockchain and AI have gotten a lot of publicity, startups that can realistically develop it or utilize it are still limited but extremely attractive to investors
  • Each country in this report is making moves to launch regulatory fintech sandboxes to test out financial technology framework – Indonesia, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.
  • Many fintech firms in the region have mandates to work with banks and regulators, which means expanding beyond their domestic market may be a challenge
  • The entry of Alibaba’s financial arm, Ant Financial, into the region has caused startups that offer similar services to quickly adapt or risk getting squeezed out

Fintech players by country

The image above shows that Singapore is well ahead of other countries in terms of number of fintech companies with 31 players, followed by Thailand with 14 players. More doesn’t necessarily mean better, it will be time until one emerges.

With each country taking initiative to become less cash dependent, for example, Thailand government’s PromptPay initiative, this will be a continued trend into Q2 of 2017.

Insurance technology is still a minority but with Thailand’s Asia Insurance introducing online insurance packages and companies such as AXA and FWD offering online insurance in Singapore, the space is growing.

Financial technology in Southeast Asia is still growing and must in a region where only 27% of the population has a bank account. That leaves around 438 million people unbanked and endless opportunities for fintech firms to bridge the gap that traditional financial institutions are struggling to fill.

2017 is already shaping up to be another year of startup growth in Thailand but investors will be more strategic with their money. As fintech matures, it can only nurture the growth of online transactions.

The original reports from Techsauce can be found here and here.