Lawrence Flynn, CEO February 2019
TODAY’S PRESENTERS Lawrence Flynn Chris Bushnell Andreas Wieweg CEO CFO CTO
AGENDA 1. Introduction to Conversational AI 2. About Artificial Solutions 3. Conversational AI Market Opportunity 4. Teneo Conversational AI platform 5. Scalable & Profitable Model 6. Growth 7. Financial overview 8. Experienced Management 9. Summary & Close 10. Appendix
Conversational AI
“By 2020, 500m+ consumers will use voice-enabled Conversational AI to purchase on digital commerce platforms” Gartner: Top Strategic Predictions for 2018 and Beyond (Published: 29 September 2017 ID: G00340316)
“By 2020, 25% of customer service and support operations will integrate virtual customer assistant technology” Gartner Trend Insight Report “Predicts 2019: Leadership Means Expanding Options, Not Limiting Them”
“Conversational platforms will drive a paradigm shift in which the burden of translating intent shifts from user to computer” Gartner: Top Strategic Predictions for 2018 and Beyond (Published: 29 September 2017 ID: G00340316)
About Artificial Solutions
A CONVERSATIONAL AI PIONEER ▪ The world’s most advanced, conversational AI platform – Teneo. ▪ Supports 35 languages, delivering millions of conversations annually. 1 (inc. 52 AI, ML and linguistic experts). ▪ 104 staff ▪ HQ in Stockholm, offices in 7 countries. ▪ Patents valued at $96m 2 ; further patents pending. Global Blue-Chip Clients Strategic Partners ¹Artificial Solutions had at the end period ending 31 December 2018, 104 full time employees ² IP portfolio valued by Oxfirst Ltd January 2016
Conversational AI platform for enterprises that allows non-specialists to rapidly develop, deploy and analyze artificially intelligent conversational applications
LEADING TECHNOLOGY COMPANIES TO WATCH - In the recent independent “Emerging Technology Study” by research group ETR, Artificial Solutions was listed as a “company to keep an eye on”. https://etr.plus/products/the-state-of-emerging-technology-in-the-enterprise-ets
HISTORIC RECORD & FUTURE VISION HISTORIC RECORD & FUTURE VISION Growth Investment Transformation Commercialization ▪ ▪ ▪ ▪ New customers with Scope invests in Lawrence Flynn joins Expansion into US ‘2nd generation’ Artificial Solutions. as CEO. with new office in ▪ Huge ‘data - lake’ of ▪ projects for Company pivots to Silicon Valley. ▪ conversational human-machine product-led Strong focus on early- systems secured. language data built. conversational AI adopters in global ▪ ▪ Global partner network European and Nordic software business. enterprises. heritage from start – ▪ ▪ endorse technology & Teneo developed by Addition of new-name, deliver scalability key differentiator & some of the best flagship accounts to core to multilingual computational the portfolio. approach. linguistic talent in 2019- Europe. 2015-18 2010-14 2008
Conversational AI Market Opportunity
MARKET OPPORTUNITY FOR CONVERSATIONAL AI Artificial intelligence revenue, world markets 70 2016-2025 (USDbn) 1 60 50 40 30 20 10 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1 Tractica “Artificial Intelligence Market Forecasts” Q3, 2018
“Overall global intelligent virtual assistants market set to reach $22.3bn by 2025 1 , with 38.8% CAGR 2017-23 2 ” 1 Tractica Natural Language Processing Q3 2017 ² Markets&Markets
DEMAND DRIVERS Customer expectations are changing . Increasingly, they demand conversational understanding. Data is the new oil . Conversational data is the king of all data. Amazon Echo & Google Home remove hurdles to user acceptance. Not designed as enterprise strength platforms; they do not easily deliver cross-device capabilities and data ownership is a major concern.
BENEFITS Counter the Customer Reduce cost and Improve the Customer Disconnect optimize resources relationship Deliver individualized Derive actionable Vital market service to everyone insight differentiation
Conversational AI for Enterprise
THE TENEO PLATFORM
TENEO ARCHITECTURE
TENEO’S FOUNDATIONS ▪ ▪ ▪ The ‘humanlike’ brain ▪ Analytics and Multilingual capabilities Easily create reporting application key - 35 languages of the conversational conversational apps for provides insights into already supported, with application vast range of use cases customers ability to scale ▪ ▪ Uses rules and Utilizes unique hybrid ▪ ▪ Track response and Machine learning advanced linguistics approach to building behaviour from combined with expertise to decide replies and conversational solutions analysing customer of experienced linguists, actions conversations used to map out the structure of languages
TENEO PROTECTED THROUGH IP PORTFOLIO Five key patents valued at USD96m 1 underpin the majority of Artificial Solutions’ product site Network of Virtual Assistants A system for the operation of a virtual assistant (VA) network, comprising a plurality of VAs and related brokers operating on network-connected devices, wherein the VAs receive user requests and send these to VA brokers which delegate these to other VAs for fulfilment. (Patent nos 9172747; filing 12/11/2014; US) Teneo: Core The system comprises a dialogue interface module, a natural language engine, a solution data repository per domain and language, and a plurality of flow elements and rules for managing interactions with users, and an interface software model. (Patent nos 8346563; filing 30/12/2012; US) Teneo: Development Conversational AI applications enable users to interact with technology in a humanlike manner. This patent covers the data, training, automation system, methods and tools to build, test and optimise such applications in a semiautomatic manner utilising usage data in the form of transaction log files. ( Patent nos 8892419 & 8903711; filing 04/12/2012; US) Teneo Data A system for natural language (NL) analytics, comprising a NL application data importer, a NL application data augmenter (Patent pending) that enriches the data, and an analytics component which provides a means of querying and analysing structured and unstructured data. (Patent pending; filing 13/05/2015; US) Teneo Hybrid Methodology A system for combining both linguistic and machine learning approaches for developing, optimizing and executing conversational interaction applications. (Patent nos 10068174; filing 04/09/2018; US) 1 IP portfolio valued by Oxfirst Ltd January 2016
WHAT MAKES TENEO UNIQUE? Data Proven Conversational Enterprise Hybrid Award winning and Leverage conversational Delivers a humanlike, Teneo is the only Uses linguistic and already implemented by data to achieve a intelligent user platform designed for machine learning for enterprises worldwide competitive edge experience enterprise use optimal performance
DATA Conversational Data Data Privacy and Security is critical. is the ‘New Oil’ Core feature in Teneo
WHY ENTERPRISES USE TENEO ▪ New channel for customer engagement ▪ Adds differentiation ▪ Increases customer satisfaction ▪ Reduces churn ▪ Drives revenues ▪ Reduces costs
Scalable and Profitable Model
POSITIONED FOR RAPID GROWTH ▪ Highly scalable and profitable business model. Professional Services Utilize partner channel for sales and services to drive fast ▪ growth. 35 languages differentiates and provides opportunity to ▪ 90% margin Automotive target new geographies . Telecom Banking Oil and gas Banking Telecom ▪ During 2018-20, revenue will shift to higher gross margin license/usage fees . ▪ Usage fees grow as client usage increases. 30 % margin ▪ License and usage fee grow as each client implements new use cases (additional channels, languages, applications). # Customers Platform Device licenses Applications Languages Usage *Industries and companies used as examples
LEVERAGING THE PLATFORM FOR SCALABILITY The initial installation of the platform is a ▪ High low gross margin business rolled out with EURk the help of partners 1,200 ▪ After the lower gross margin of the revenue 1,000 decreases, the allocation in skewed towards the higher margin license and usage fees 800 Low After the initial investment, companies often ▪ 600 add services and products with high margins 400 Once the Teneo platform and its additional ▪ 200 offerings have been implemented, customer stickiness is achieved 0 Year 1 Year 2 Year 3 Year 4 Margin PS License Usage
Growth
STRONG ORGANIC GROWTH PLAN ▪ Lighthouse accounts secured: – Expand within same verticals. – Across similar use-cases. ▪ Partner channel of global SIs and digital agencies established. – Global sales channel, direct access to C-level contacts in target enterprise accounts. – Services delivered through partners providing reliable scalability. ▪ Model underpinned by proven technology. ▪ Majority of R&D costs complete - when revenue grows, dev costs will remain flat.
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