Building Two Capital-Efficient AI Companies: Arijit Sengupta, Founder and CEO of Aible and BeyondCore (Part 4)

Sramana Mitra: The data sources are the ERP systems of these customers?

Arijit Sengupta: Initially, [the data sources were] CSV files. Eventually, we built connectors to SAP and Salesforce. At the time of funding, we were still taking CSV files. Not all of the features existed at that time. What was important for them was that we had customers talking to Menlo saying we replicated something we had spent months doing.

We not only did it; we did it better. That was the basis. I do think there was an important aspect to being cash-flow positive, which is from a negotiation strength perspective.

Sramana Mitra: Yes, sustainability.

Arijit Sengupta: It’s not a question, it’s easier to have a stronger negotiation play.

Sramana Mitra: Absolutely, very well-made point. How much did you raise from Menlo in 2014?

Arijit Sengupta: The total was $9 million. It was Menlo and some convertible debt converted.

Sramana Mitra: After you got the funding, what are the major milestones and accomplishments?

Arijit Sengupta: We got the product to a very different level. We would look at the landed deals and how much the deal expanded in the next six months. “When we landed, it was this much. Within this period of time, we bumped up this much.” That allows you to extrapolate.

Sramana Mitra: What were your average deal sizes at the proof of concept level?

Arijit Sengupta: The smallest was around $25,000. Most of them were around $100,000. 

Sramana Mitra: Substantial deal sizes. Great. 

Arijit Sengupta: We got to a point where three of the top 10 banks were working with us. We were horizontal. We were applicable to many things. You wanted to prove that you were truly horizontal. 

Sramana Mitra: In 2014, you raised money. In 2016, you got acquired by Salesforce. Was there any other financing in between?

Arijit Sengupta: There was some convertible debt right before we were doing the acquisition. We started getting multiple acquisition offers by 2015. We had become a visionary in the Gartner Magic Quadrant.

I don’t remember exactly when we had displaced Oracle from the Gartner Magic Quadrant. A lot of these guys were trying to acquire us. I, of course, thought that the valuations were too low. I ignored it. Eventually at some point, your Board says, “You have to evaluate these. You just can’t say no.”

It was a significant bump up from what we’re doing. We hired an investment bank. You will end up getting acquired because the deal they’ll bring is going to be good enough. My earliest investor made 30 times their investment. My latest investors doubled their money.

Sramana Mitra: It was a very quick exit. 

Arijit Sengupta: For the ones who doubled their money, it was even quicker than that. They got to put in money right before the acquisition. There were some people who had put in all the way back in 2004. They did really well because we had accrued interest and converted at discounts. 

This segment is part 4 in the series : Building Two Capital-Efficient AI Companies: Arijit Sengupta, Founder and CEO of Aible and BeyondCore
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