Generative AI is transforming the way businesses run, and one startup just raised a fresh round of funding to help companies become more global.
The startup, Smartcat, just raised $43 million in Series C funding led by New York-based VC firm Left Lane Capital with Lead Edge Capital also participating. The firms are joining a list of prior investors that includes Koro Capital, Marbruck Investments, and Chrome Capital.
Smartcat previously raised a $4.5 million seed round in 2017, a $7 million Series A in 2018, and a $15 million Series B in 2020, according to PitchBook data.
Founded in 2016, Smartcat provides businesses with AI-generated translation services for written and spoken documents. The startup’s cloud-based program can translate a variety of corporate content — from marketing copy to internal training videos —into more than 280 languages.
In situations that require extra polish, the startup also uses AI to help companies hire human translators as well as manage their work and payment.
Generative AI has boomed over the last couple of years, and Smartcat founder and CEO Ivan Smolnikov said that the momentum has supercharged the startup’s existing offerings and piqued investor interest.
“Smartcat has been focused on language AI from the start, so when generative AI emerged, it opened up even more opportunities to create valuable use cases,” he told Business Insider. “The round was oversubscribed, and it also became clear that investors had cooled down after the initial AI hype and were looking beyond AI storytelling for solid proof of high ROI for enterprise customers. This shift worked in our favor.”
VC investment in AI startups is continuing to go gangbusters, topping out at a whopping $24 billion in the second quarter of 2024 — the biggest quarter for AI funding in recent years, according to Crunchbase.
While some consumer and healthcare AI startups have raised eye-popping rounds, the tech is creating plenty of opportunities in the B2B space. Other startups focusing specifically on AI-aided translation services for enterprises include DeepL, which raised $300 million on a $2 billion valuation earlier this year, and Lilt, which raised $55 million in 2022.
With its new round of funding, Smolnikov said that a big focus for Smartcat going forward will be to improve the way humans and AI work together to provide translation services.
“We are working on a variety of new use cases for multilingual AI content generation and translation, all powered by a human editing feedback loop and all serving the primary goal of helping enterprises achieve their global ambitions 10x faster and at a fraction of the cost,” he said.
Check out the six-slide presentation Smartcat used to raise $43 million in Series C funding.