According to a Markets and Markets report, the global AI industry is estimated to grow at a CAGR of 37% to $190.6 billion by 2025 driven by the continued adoption of image recognition, speech recognition, and data mining services. Washington DC-based Afiniti is a Unicorn player in this space that is expected to list soon.
Afiniti was set up in 2009 by Zia Chishti. Prior to setting up Afiniti, Zia was a founding CEO of a teeth-straightening device company called Align Technology since 1997. In 2003, he left Align and moved to Washington and worked on another business called TRG where he explored several ventures.
But Zia was still searching for the next business idea that could address a market much larger than teeth straightening and build more market value. He narrowed down on call centers and began working on SATMAP in 2006. He developed an initial algorithm of 80,000 lines out of his Washington DC apartment. For the first few years, Zia focused on the BPO industry for his product. In two years, he had managed to patent some of his code, and by 2009, SATMAP’s client list started to expand. It added Caesars Entertainment in Vegas as its first US-based client and even began to attract big names like TMobile to its platform.
SATMAP continued to expand its code by integrating machine learning capabilities to it. Over the next few years, SATMAP expanded its international presence. In 2016, it rebranded itself to Afiniti. Today, Afiniti’s code has more than 4 million lines and uses AI to identify and predict behavior patterns of consumers to help improve interactions for businesses.
Afiniti uses behavior patterns such as prior interactions with the company, purchase history, and demographic information for customers and employee’s historical performance to pair customers and employees. These pairings help deliver higher quality interpersonal exchanges for the business because of the “connection” that the employee is able to establish with the customer. Afiniti believes that its pairing makes it very similar to Tinder for call centers.
It has more than 200 patents and is present across 18 countries globally and its customer list spans a variety of industries including telecommunications, pay TV, insurance, financial services, healthcare, and hospitality.
Afiniti has been venture funded so far. It has raised $197.2 million from investors including McKinsey, former Thomson Reuters CEO Tom Glocer, former BP CEO John Browne, Greyrock Investments, The Resource Group TRG, Global Asset Management, Verizon CEO Ivan Seidenberg, CEO and publisher of the Washington Post Fred Ryan, and Zeke Capital Advisors. It raised an undisclosed sum in a series E round in May this year. Prior to this round, it had raised $75 million in October 2018 at a valuation of $1.6 billion.
Afiniti does not disclose its financials, but claims that it had turned profitable in 2018. It has also been delivering 100% revenue growth year over year over the last five years.
Afiniti has a very interesting pricing model. Instead of charging customers on the basis of seats deployed, or monthly subscriptions, the company sells its services on the performance it delivers. It integrates its customer’s CRM, sales, and telephony systems at the back end to route calls and to track sales. It then runs its system in intervals and calculates the difference in the revenues earned while its system was running versus revenues earned while its system was not running. Afiniti gets a percentage of this difference in revenues as its revenue. It is a complicated sounding pricing mechanism, but it is able to offer a true performance-based pricing solution to its customers. Afiniti believes that it is able to improve sales for its customers by 4-6%.
In 2017, Afiniti had confidentially filed for an IPO. But it decided to cancel those plans as money from investors was easy to come by. Zia still does not know if he will take the company public soon. He believes that the pairing technology can be leveraged in other services as well – such as helping the organization staff better for text chat, store interactions, or even on the sales field. He still hasn’t decided what the next steps for Afiniti will be, but he knows that the opportunity is endless.