Listen Labs, a Sequoia-backed startup that uses AI to conduct thousands of voice interviews simultaneously for customer research, announced Wednesday that it has raised a total of $27 million.
The Seed and Series A rounds were both led by Sequoia’s Bryan Schreier, who was an initial investor in the customer experience platform Qualtrics. The company says clients including Microsoft, Canva and Chubbies are already using the Listen platform to generate questions, find participants, and run interviews using audio and video across demographics and geographies in a matter of hours. LLMs then turn the customer stories into reports, highlight reels and PowerPoint presentations for clients.
For co-founders Florian Juengermann, a German national champion in competitive computer programming, and Alfred Wahlforss, a Swedish entrepreneur whose brother founded SoundCloud, a struggle to discover what their own customers wanted sparked the original idea for Listen Labs. The duo, who met at Harvard, had launched an early image-generating app called BeFake that blew up in 2023, garnering over 20,000 downloads in one day.
“We were basically desperate to understand how to get customers to stick around,” said Wahlforss. “Then we had this epiphany of what if we could use LLMs to speak to every single one of our customers and then summarize what they all think about it and really understand what we should change in the product?” A basic prototype proved to be so powerful that the duo immediately sold BeFake and doubled down on Listen Labs.
Meanwhile, Sequoia’s Schreier had been on a lookout for a startup going after the $40B market research industry, which for decades has been led by expensive consulting companies – an opportunity he had “drooled over” when working with Qualtrics, which is a software platform used to manage and improve customer and employee experiences.
“Most companies are pretty limited in the pursuit of being customer-obsessed,” he explained. “You can put analytics on your websites and run a focus group maybe once a year through a market research company, but it’s expensive. It takes a long time. The feedback loop is delayed, and it’s just not ideal.” Listen Labs, was going after a giant market that “is just begging for an AI-first approach.”
Listen Labs uses a variety of AI models on its platform, allowing the company to keep up with the sector’s constantly evolving models and capabilities, said Juengermann. The models can be fine-tuned to make sure they ask customers the right questions about a product, service or brand, and can also work in a variety of languages. When Listen was doing customer research for graphic design platform Canva, for example, the AI was able to speak with customers in dozens of different languages, while the results could be quickly translated into English.
Listen Labs would not have been possible in the early days of ChatGPT, Juengermann pointed out. “The first version of ChatGPT wasn’t even able to have a coherent structure in the way that it was asking the questions, it wasn’t even able to follow instructions,” he said. One of the most important things is making sure the AI has a deep understanding of the business context before asking any questions — but until GPT-4, that was not possible.
Not surprisingly, the startup uses its own product to find out what customers want. “We’re testing things all the time, whether that’s our ads or our website,” said Wahlforss. The founders found that their ideal customer was not actually product managers, like they thought, but rather people in marketing. “Listen was able to interview 50 product managers and 50 marketers, and he was able to kind of tell us why,” he said.
With the latest OpenAI models now surpassing Wahlforss’ own capabilities as an interviewer, and the AI’s analysis of the data so greatly improved, Listen Labs is working on a prototype for its next big advance: An AI agent that can work proactively.
“It could come up with hypotheses, test them, go to market, continuously interview and learn, and also pick up on what you’re thinking about in the business and proactively run research,” he said. “I think it’s going to change not just our business, but every business.”
Listen Labs currently has a team of 10, but the co-founders say they are now ready to grow aggressively — in San Francisco. “There’s an AI revolution happening, and it’s happening in San Francisco, so we knew we needed to be here,” said Wahlforss.
This story was originally featured on Fortune.com