Uniphore has early-mover advantage as there is secular demand for AI today: CEO Umesh Sachdev

Umesh Sachdev, CEO, Uniphore

Before the buzz around generational AI began in India last year, Uniphore, the IIT Madras-incubated software solutions startup, developed products using its unique AI capabilities like emotion AI and conversational AI to help enterprises decode their sales, marketing and workflow data and automate several processes.

Over 16 years, Uniphore has made significant investments in the three areas of AI, including knowledge AI, emotion AI and generative AI. This gives them the first-mover advantage in a world where every software company is trying to ride the AI wave and every enterprise customer wants AI solutions in their operations.

Uniphore today is worth more than $3 billion and services over 1,500 enterprise customers in 20 countries and has around 1,000 employees, globally.

Its cofounder and chief executive officer Umesh Sachdev, in an exclusive interview with Moneycontrol, said that the firm's AI-native advantage is transforming into increased client base, geographical demand increase and a significant jump in revenues.

Sachdev also shared his proud moment when the firm inaugurated its very first 'India AI Innovation Hub' right at the place where it started the journey of Uniphore -  IIT Madras Research Park. Sachdev also shared his thoughts on the impact of AI regulation in the US and the company's $1 billion in Annual Recurring Revenue  (ARR). roadmap and its IPO plans.

Edited Excerpts: 

Uniphore has inaugurated its first India AI Innovation Hub in IIT Madras Research Park in Chennai. Tell us why Chennai and do you think Chennai has the right talent pool for AI innovations? 

If you think about Uniphore’s journey, it is a very unique story of a company that was founded 16 years ago in the incubation lab in IIT Madras, which is right in the backyard of where we have set up this hub.Today, we have grown up to be one of the world's largest B2B AI-native firms in the world, with headquarters in Palo Alto, which is right next to Stanford University. So, if there is a true story of Indian innovation, global scale, and connecting Silicon Valley in India, that's Uniphore. For us, ‘why Chennai’ has an obvious answer. This is where the company started. We've constantly remained invested in Chennai. This is our biggest office anywhere in the world. We have offices in 13 countries. This is the single biggest real estate we have anywhere in the world.

We're very familiar with Chennai and its talent pool. Chennai has already shown to India and the rest of the world that it has tremendous enterprise SaaS talent. AI is slightly different. The way the products are built, software models, and the way AI is sold is slightly different from SaaS, even though the business model is still subscriptive. So our hope is, starting with Uniphore, we can create Chennai as not just the SaaS hub of India, but as the AI hub of India. And we're very excited with the inauguration of this office.

What will be the main areas of work that will happen from your Chennai AI Innovation hub which will support Uniphore’s global operations? 

So, the Uniphore platform has made significant investments in three big AI areas. The first is called knowledge AI.
Simply put, knowledge AI is an AI model that takes a lot of unstructured data and outputs structured data. The second is generative AI, and Uniphore is working on its own Large Multimodal Model. So it's LMM, as opposed to LLM (Large Language Model).

The third AI model is emotion AI, which is an AI model that can pick up human emotions, changes in tone, facial expressions, or video meetings with computer vision, etc. So gen AI and emotion AI are the two big areas that the Chennai office that will play a large part of that research in collaboration with our Silicon Valley teams.

Is Uniphore looking to hire more talent, especially for generative AI research and engineering? 

Uniphore has been having very healthy and steady growth even in a tight macroeconomic condition. The natural outcome of growth is in addition of more talent in various parts of the organisation. By virtue of this being our largest office, it's very fair to assume that Chennai will have the first priority when it comes to growing talent in engineering, AI, research, data sciences, and so on and so forth.

We are present in countries like India, Tel Aviv, UK, and the US If you think about those geographies, we are able to combine the knowledge and the best practices from some of the best engineering hubs in the world. So this is a story of Palo Alto, Tel Aviv, UK and Chennai coming together to make one of the world's largest AI company, Uniphore.

Uniphore has been working on generative AI and conversational AI for quite some time now. Did you have any advantage being an AI-native company? 

Uniphore is a company that's growing extremely fast, even in the current environment. We've already said this. We're now in the hundreds of millions of contracted ARR. And our official prediction of growth is 70 percent-plus for this year. Our belief is that we can maintain a high growth rate for the coming 3-4 years. That's partly driven by the massive demand for AI, across the world in enterprises and partly because there is no other AI company in the world, which has 1,500 customers, and 7,50,000 users. The fact that we've been around for 16 years doing AI just gives us that advantage.

Being an AI-native company, did the whole buzz around generative AI have any impact on Uniphore? Was there a necessity for the company to make any big changes in order to align with the new models of AI? 

We started as an AI company focusing on human speech, speech recognition, and natural language processing. As time went by, we've added computer vision, video, and text, which is email and chatbots. We have now become a multimodal AI player, which combines video, voice and text in a single model. This is why we're not building an LLM, but an LMM, which is a key difference. Very few companies in the world are doing this.

That said, the Gen AI by ChatGPT made a big difference by making an announcement last year. So we, today, by the way, have thousands of customers, who, for the last four years, have been benefiting from generative AI, or LMMs, as part of the Uniphore’s technology stack. So if you ask me from a technology front, did something change for us last year? No.

What did change, though, and it's a big change, is that, I tell my team half- jokingly, ChatGPT’s announcement and Microsoft putting $10 billion in LLMs was the biggest marketing event for Uniphore, without us having to spend anything on it. I say that because, all of a sudden, the customers that I need, the CEO counterparts, the CIOs around the world that we sell to, whether they're a large bank or telecom company, before ChatGPT’s announcement would not necessarily care too much about what's under the hood of the AI model, trained or powered. They will care about business outcomes. “Just tell us the ROI”, they used to say.  Now, it is a topic that CIOs want to really understand and this has opened the eyes of the world towards Uniphore.

Do you see a significant jump in your AI product adoption and revenues now? 

Yes, we do see increased adoption and If I quantify this for you, last year, when enterprise markets around the world began to slow down, when every SaaS company faced slowness in their growth projection, Uniphore grew its top line to 62 percent. That was the year when we crossed 100 million dollars of contracted ARR.  This year, we are growing 70-plus percent. That tells you we are accelerating as we are becoming bigger.

It is like a hockey stick effect, if you were to plot us on a graph. It is the biggest indicator of the fact that the global demand for AI, not just in North America, but in the Middle East, in India… we see government officials beginning to talk about what we are seeing as a secular demand for AI around the world.

Is Uniphore venturing into newer markets, apart from North America and Europe? 

Yes. More than half of our revenues come from North America. And the remainder is split between Europe and Asia-Pacific. The Middle East, India, Philippines, Japan and Australia are the key markets today. It is true that if you do a time analysis of just enterprise software of any category, 50 percent of the global target market is North America and the remaining 50 will be split between the rest of the world. So the size of the North American market is just, you know, equal to the rest of the world. So, it is no surprise that Uniphore’s revenue mix is following that trend.

What about the Indian market? Do we see adoption here and is there a scope for India to be a talent hub for AI innovation, just like how it is for developers and engineers today? 

In India, I’m pleasantly surprised that the government recognises we have one of the largest technical talent pools in the world. If we were to give them the right training, we can be the supplier of AI talent to the rest of the world. So, even countries, which, in the internet period, in the cloud period, were followers to what Silicon Valley does, in the AI wave, I'm beginning to find that countries don't want to follow Silicon Valley. They want to be at the leading edge of it. And that is different. Probably I've not seen this as much in my 16 years of experience.

Which school of thought do you ascribe to: that AI will replace jobs or AI will only be a co-existing innovation? 

In my interactions with companies and governments, I find there is a shallow level of understanding in some cases, which leads to some of these fears or panic.

I was recently meeting in another country, the Secretary for Labor. She said that with all these co-pilots for coding, we don't need coders anymore. Not true. The definition of a co-pilot is that it works alongside humans who know what they are supposed to do. And if done well, what it will do is make each coder at least 50-60 percent more efficient. Similarly, Uniphore has copilots for call centre regions. We have copilots for salespeople and that is not to say that they're replacing those humans. But they're making each of those employees 50-60 percent more efficient.

Having said that, if you do the math, if employees become 50-60 percent more efficient, it means lesser number of people are required to do the same job. So, my advice to policymakers is that, very swiftly, think about reskilling the talent pool in your countries, and give them the skills needed to participate in the AI revolution. There will be, on a net basis, more jobs than before. They will just be different. This is the moment to start educating themselves or skilling themselves.

US President Joe Biden signed an order to regulate AI in the country. Given that Uniphore has a lot of presence in the US market, will you feel any impact? 

No, in fact, it's a very welcome executive order. I have been one of the few who has been saying that it is really important that governments around the world focus on putting guard rails around AI. For the first time with generative AI, we have a technology that can make decisions without human supervision. That was never the case with any other technology development in the past. Therefore, just in theory, the risk for technology getting into the wrong hands is very high.  So, putting responsible guardrails is a very welcome step. The US has taken the lead. There's a lot more needed from that executive order. By no means, it is thorough. Countries around the world, including India, should think about it and think about how you make models that are going to be used within the country, be run, hosted and maintained within the country.

Can you please share Uniphore’s business roadmap and outlook for 2024? Is there any new segment, apart from sales and marketing, that Uniphore will venture into in the coming years? 

On the business side, in the next 3-4 years, we want to cross a billion dollars of ARR and raise over $600 million of capital. Our shareholders have been extremely supportive and allowed us to build this wonderful business, but giving those shareholders liquidity along the way is important. Therefore, at some point, considering going to the public markets for that liquidity will be an actual outcome. Today's not the day for that day, clearly. Neither is Wall Street conducive. We're still in a phase where we're investing in these big models. The business milestones we look at are more geographic expansion. We look at more segments, service sales teams, contact centre teams, government sector, but there are applications in marketing in HR that we're not yet servicing. We are also actively evaluating acquisition opportunities for gen AI capabilities.