SoundHound acquires Amelia AI for $80M after it raised $189M+

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Shivam Thakre
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2 min read

SoundHound, an AI company that makes voice interface tech used by car companies, restaurants and tech firms, is doubling down on enterprise services by playing consolidator in a crowded market. The company said on Thursday that it is acquiring Amelia AI, which makes an AI agent that businesses can customize for internal or customer use.

SoundHound is paying $80 million in cash and equity for Amelia. It’s not clear what the latter’s valuation was prior to the deal, but according to PitchBook, Amelia had raised at least $189 million, including a $175 million investment in March 2023 from BuildGroup (PitchBook lists several investments, including two of undisclosed value).

Amelia’s customers include BNP Paribas, the pharma company Teva and Fujitsu. SoundHound said the two will together have some 200 customers, including big banks and Fortune 500 companies, and expects to see revenue of $150 million in 2025. Of that amount, $45 million would come from Amelia’s current business.

SoundHound is publicly traded and has had a bumpy ride since listing. When it initially went public via a SPAC merger in 2021, the company had a valuation of $2.1 billion. But in 2023, it laid off nearly half its employees and raised some extra funding to shore up its position. Its market position looks stronger in 2024 — its current market cap is around $1.4 billion compared with less than $300 million in January 2023. However, analysts still expect the company to report a loss when it announces quarterly results today.

The deal will see SoundHound assuming debt accrued by Amelia. The combined company will have $160 million in cash and $39 million in debt when the deal closes.

Both SoundHound and Amelia know something about the long game in AI. SoundHound has been around since 2005, and Amelia was founded all the way back in 1998 as IPsoft, during the first wave of internet businesses. Its founder, Chetan Dube, is still its CEO.

For SoundHound, the rationale here is fairly straightforward: Buying Amelia will help it move into verticals where it currently doesn’t have much business, such as financial services, insurance, healthcare, retail and hospitality.