We Got Funded: Personal Concierge App Elves On How They Raised A US$2 Million Seed Round Elves successfully raised US$2 million in its seed round in December 2017- one that the startup terms as having been "heavily oversubscribed."
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Real innovation, they say, lies in taking the uncharted path. At a time when enterprises globally are betting big on the power of chatbot technology as a gamechanging customer service tool, along comes a company that pairs users with real personal concierges to get their needs met. Egypt-based startup Elves connects you with a human assistant –who they call an Elf- who chats with you, understands what you're looking for, searches for options based on your preferences, and makes tailored recommendations for your needs. Be it to find the perfect gift for an occasion, book a cab, purchase a particular product, or deliver something to an address anywhere in the world, the Elves platform can make it happen through its iOS app or on Facebook Messenger.
Co-founded by Egyptian couple Karim Elsahy and Abeer Elsisi in 2016, Elves does not make use of any pre-defined algorithm to do what it does; however, the assistants do make use of artificial intelligence (AI) to learn about their customers, and thus offer better recommendations over time, which makes it, essentially, "a human-assisted AI assistant." The startup, with a team of over 40 employees, has admittedly had valuable global recognition come its way since its launch. The startup received an invitation by Facebook to its F8 developer conference, an invitation to the World Economic Forum where Elves was listed as one of the 100 most influential startups, and also won a shout-out from Facebook COO Sheryl Sandberg on a Facebook post.
Amid this, Elves successfully raised US$2 million in its seed round in December 2017- one that the startup terms as having been "heavily oversubscribed." The investment came from high profile investors including Emaar Group, the Kauffman Fellows Syndicate, Dubai Angel Investors ("their largest investment thus far") and other regional and US-based angels. Ask founder and CEO Elsahy how the startup managed to raise a seed round of a value that's likely to be considered quite substantial for the region, and he attributes it to one word: relevance. "Everyone we [would] talk [to] could find a use for Elves," he says. "Because the proposition is so compelling yet versatile and broad, everyone could find a use for Elves. It's hard to argue against it, when you see yourself use it constantly and effectively."
With considerable experience in managing large call center projects as part of their careers, Elsahy says he and Elsisi spent a lot of time in America's Bay Area observing the growth of machine learning. "We felt that pairing our background with machine learning could lead to something interesting," he remembers. Elves' proprietary technology allows the company to address a number of concurrent live user requests, which are handled by human assistants. As the company's website declares, "Bots understand you [user] as data; an Elf really gets to know you," and Elsahy describes this as "real intelligence- combining the empathy and understanding of a human with the efficiency and scalability of a machine; always ready, relevant, and constantly learning and growing."
To help them scale such a model, the company plans to utilize the seed investment primarily in "marketing our expansion to new markets, and continue to build our tech to enhance the user experience." Mohammed Sabry, CMO, Elves, adds, "Our main goal is to drive as much traffic as we can to our machine learner and recruit the best engineers to drive Elves forward. We are now ready to take Elves to the next million users." Without getting into specifics, Sabry says that Elves has managed to execute over a million conversations, and "with no marketing spend," it has captured over 24,000 users till date- double of where they were in August last year.
As for the process itself, Elsahy calls the fundraising a "surprisingly fun" experience for the team. "We enjoyed going on the road to tell people our story. When you have a strong and compelling proposition that is able to capture the imagination of smart investors, you feel validated and encouraged," he says. As a serial entrepreneur with experience in starting and leading several successful companies including enterprise software startup Konnecti.com, and VC firm Genius Ventures (which was itself acquired by Sawari Ventures), Elsahy stresses that the fundraising phase should be embraced by entrepreneurs. "We met some fantastic people along the way [during fundraising], and learned a lot about ourselves and different opportunities we could potentially explore," he says, noting the positive vibes they've encountered in raising finance for Elves. Interestingly, the evolution of the startup is reflective of the business model of the platform that it leverages the most- Facebook Messenger.
In fact, noticing Elves' performance on their platform, the Facebook team also reached out to start a conversation with the Elves team, and Sabry too says they have met members of the Facebook team at several industry events throughout the year. "Immediately, we felt that there was a lot of potential synergy between us; also because a large percentage of our users use Facebook Messenger to communicate with us." He adds that they have kept the dialogue open with the tech giant, and "seek their support regularly to enhance our user experience."
With external support, finance, and technology all going in their favor, I ask Elsahy if Elves' "humanassisted virtual assistant" model could pose a challenge to scaling the enterprise. But Elsahy shuts down the premise, saying "As our user base increases with conversations, our machine learns more and makes our Elves handle more concurrent users." He backs it up with an instance, as well. "To give you perspective, today we have the same number of Elves handling more than double the user base we had in July ," he says. "One Elf handling many concurrent users is important to our business model, comparing to a traditional customer service center where the model is one to one." As for the road ahead, Elsahy envisions their strategy evolving into a "many-to-many model, where anyone can be certified to become an Elf, and share their knowledge and experience with people local to them and in their language."