Bootstrapping with Services at the Cusp of AI and FinTech: Vahe Andonians, Founder of Cognaize (Part 4)

Sramana Mitra: Interesting. You’re doing almost like an AI fintech incubator where you’re doing services projects for large companies. Those are exclusive. The datasets are on their premises. You’re not touching them, but you’re building the models for them. Then you’re taking the knowledge and turning them into SaaS that you take to the midmarket.

Vahe Andonians: It is correct, but not that we’re learning from the data and selling that. We develop our platform and we sell it.

Sramana Mitra: In doing AI in any domain, there are two significant kinds of knowledge. One is domain knowledge and the understanding of the workflow. Then there is the model that learns from the data itself. You need to train the models with that knowledge.

This is a very interesting business model that you’re proposing here. I presume these large banks are paying you multi-million dollars to solve their use cases.

Vahe Andonians: We are slightly over $9 million ARR. It grew very fast. We’re still growing at a pretty healthy rate.

Sramana Mitra: Are you still self-financed?

Vahe Andonians: One and a half years ago, I took on a seed financing from two VCs. That was $1.75 million.

Sramana Mitra: It’s a modestly-capitalized company.

Vahe Andonians: Right, because we bootstrapped initially. We are in the process of closing the Series A. I think we are going to close this pretty soon.

Sramana Mitra: Tell me about your Armenia operation. Why Armenia?

Vahe Andonians: I’m an Armenian. My wife is directly from Armenia. The first two companies also had an operation here in Armenia. When I first came to Armenia, it was a business decision. I didn’t feel like an Armenian per se. Now I feel much different. I feel like an Armenian. It makes a lot of sense to be here.

Sramana Mitra: How many people do you have in Armenia?

Vahe Andonians: 400.

Sramana Mitra: There are a lot of trained people that you can hire?

Vahe Andonians: Yes, the level of education is very high in Armenia. They have a good foundational education here. My experience is that the strength of this country is creativity and their work ethics.

Sramana Mitra: You’re doing AI work there?

Vahe Andonians: A lot of AI work. If you think about AI, it’s just moving a little bit away from the scientific approach and infusing it with an engineering practice. It’s about scale now. We have lots of data.

Sramana Mitra: There are also aspects where tremendous domain knowledge is put into AI.

Vahe Andonians: Absolutely. That’s why we’re focusing on finance industry. We find enough talent here. We also have operations in Malaysia, mostly because of Chinese language. As a US company, it’s a little bit difficult with China. Malaysia has a lot of native-speaking Chinese people. We have operations in Portugal. That is mostly because of GDPR or other compliance issues.

Sramana Mitra: Very interesting. What I really like is the model that you suggested which is creating this AI science shop and then working with large banks on their specific use cases. You’re developing a lot of domain knowledge out of that.

We have a track called Bootstrapping with Services. I believe heavily in that. You have to learn the domain knowledge somehow. The biggest AI technologists are not necessarily finance experts. They have to learn that somewhere.

Thank you for your time.

This segment is part 4 in the series : Bootstrapping with Services at the Cusp of AI and FinTech: Vahe Andonians, Founder of Cognaize
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