Bootstrap First, Raise Money Later and Build a World-Class AI Startup from India: Raghu Ravinutala, CEO of Yellow.ai (Part 1)

Raghu has built an incredible AI startup from India with a global base of enterprise clients. Fabulous story!

Sramana Mitra: Let’s start by introducing our audience to yourself as well as the genesis of Yellow.ai.

Raghu Ravinutala: I’m the Co-Founder and CEO of Yellow.ai. Yellow.ai enables enterprises to drive automation on their customer experiences and employee experience by integrating a whole set of enterprise data and delivering phenomenal experiences that the companies can leverage for sales, marketing, HR, and IT automation.

I’ve been in the semiconductor and EDA industry for about 15 years before starting the company in 2016. The genesis has been serendipitous. I was chatting with my friends over a break. We were talking about the Facebook acquisition of WhatsApp. One of my friends commented that “I think WhatsApp is going to monetize conversations with businesses.” I could relate to it quite strongly because I could sense the frustrations that I used to have in talking to enterprises.

I launched a mobile app where consumers can chat with businesses. I did that with my friend Kishore who used to work for Flipkart. That got traction. We had to automate it, because we didn’t have a lot of employees. That was the genesis of the story. One thing led to another and, now, we’re automating more than a billion conversations every single quarter.

Sramana Mitra: Where are you located?

Raghu Ravinutala: I’ve always been located in India and Bangalore. Now I’m making the shift to the Valley.

Sramana Mitra: What about the company? Is this a Bangalore-based company?

Raghu Ravinutala: The company is a Delaware C-Corp. It’s a US-incorporated company with customers across 15 countries. In the US, we have 40 people.

Sramana Mitra: In Silicon Valley?

Raghu Ravinutala: In Silicon Valley, about 15. The rest are spread across different states and cities.

Sramana Mitra: You’re doing a virtual company?

Raghu Ravinutala: Yes.

Sramana Mitra: Do you have an operation in India?

Raghu Ravinutala: We have a very large operation in India. We have about 600 plus people in India. A large part of our development and support is in India.

Sramana Mitra: That’s Bangalore?

Raghu Ravinutala: Yes.

Sramana Mitra: Going back to the genesis, you and your friend started the company. How did you get it going? Was it bootstrapped?

Raghu Ravinutala: We bootstrapped till our first million in ARR. In 2016 just because we started on the software and built some automation when Facebook opened up their Messenger platform, we were one of the companies who had some kind of platform ready to automate conversations on Messenger. We initially partnered with Microsoft. We were on Azure.

We got the initial set of 5 to 10 customers working with Microsoft. Most of them are still our customers even after six years. That helped us prove the entire concept of automation on top of their websites. These were all large enterprises with large consumer volumes. They also helped us generate that initial revenue. We were profitable from year one.

Sramana Mitra: Microsoft helped you get to those customers?

Raghu Ravinutala: Yes. There was this global launch of Messenger. There was enough demand for customers to explore automated chatbots. Microsoft didn’t have a lot of presence during that time. The first partner they wanted to introduce was someone who is hosted on Azure and who has some ready-made technology that we can showcase. That helped us get to the initial set of five to 10 customers.

This segment is part 1 in the series : Bootstrap First, Raise Money Later and Build a World-Class AI Startup from India: Raghu Ravinutala, CEO of Yellow.ai
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