Lateral Capital Management, LLC

Acme Voice Analysis

Acme Voice Analysis (AVA) had developed software to evaluate the true intent of callers into call centers. They take customer voices apart to determine the caller’s “real” intent, satisfaction level, etc. in real time. Within 30 seconds they can signal the call recipient on whether the caller’s intent is to buy, learn more or defraud the seller. Key customers include Verizon, ATT and Amazon, which resells Acme’s services to other users on a white label basis.

  • Assessment: Incredible team with patented technology, led by a great sales person. The idea of determining whether or not callers are buyers or just shoppers, for example, is highly powerful, in that it feeds to much better outcomes for both parties. Could this technology be misused? Yes, this was a concern, as was the question of whether there is any value to the common good. But wow – what a toolkit for commerce.
  • Outcome: Sales in Year 5 were about $18MM. They raised $5MM on a $40MM pre-money valuation and then $12MM on $80MM. Our guess is that Acme will be sold in the next 3 years for a 10X+ return to the early investors.
  • Learning: Here’s another example of a situation where our strategy prevented us from making a great investment. We had the chance to invest in this company in Year 2, before they had customers; at a valuation of perhaps $8MM. We thought this was too high and that despite the “promise” of the technology, the lack of customers made it “off strategy.”