Artificial Intelligence (AI) has been overhyped in the past couple of years. As I’ve written, every startup is positioning themselves as an AI company, but most are not. So it’s quite exciting when I meet a team that’s actually built an Authentic AI platform and is seeing significant customer traction on their platform. AppZen – an AI company tackling the enterprise back office – is one such company, and today we are thrilled to announce that we are leading their $35M Series B financing.
The enterprise back office gets very little love. Although this is the heartbeat of many organizations, processing invoices and expense reports are not really a “sexy” business function. However, given the manual nature of a lot of the work, the enterprise back office is a perfect place to apply AI to help companies function more efficiently.
Take expenses for example. Let’s face it: filing expense reports sucks. Approving them sucks even more. And auditing them is the worst. How many managers actually open their employees’ expense reports and scrutinize them before hitting “approve?”
Meanwhile, many of us have met that salesperson who has no problem expensing a leisurely two martini lunch while putting a fictitious client’s name on the receipt (with a wink,wink, nudge, nudge). Or perhaps you know that executive who always flaunted company policy and upgraded to business class at the gate on the corporate card? And they got away with it… over and over again.
Expense fraud is a real thing. Earlier this year, over a dozen employees at Wells Fargo lost their jobs for submitting fake expenses. The problem is, today’s state of the art for auditing expenses for fraud, policy compliance or just plain data entry mistakes is to hire people in the back office to manually read receipts and compare them against a set of rules. Not only is manual audit a painfully tedious task, but it’s slow and prone to human error. Most enterprises are only able to audit about 5% of their total expense volume, and many unscrupulous employees know this and exploit it. The same goes for invoices, where a larger number of vendors and suppliers exploit an inefficient system.
It turns out that expense and invoice audit is a perfect problem for AI to solve in the enterprise. I hadn’t really thought about the sleepy world of expenses and invoices until I met Anant Kale (founder and CEO of AppZen) and Kunal Verma (co-founder and CTO). Two amazing things happened after I sat down with Anant and Kunal.
First, I knew that Anant and Kunal were a team that we absolutely wanted to partner with. As a team, they embody the classic Silicon Valley entrepreneurial story — deep technical expertise, strong product chops, a humble yet persuasive sales approach and an inspiring journey through a startup pivot to iterating with customers to find product / market fit.
Second, I realized that Anant and Kunal had built a unique AI-powered platform that solved a neglected, but very highly valuable business process, using a sophisticated combination of advanced technologies. Over the past five years, the AppZen team has built a platform to deliver 100% real-time audit of an enterprise’s expenses and invoices. This is an incredibly hard problem to solve which requires a combination of Natural Language Processing (NLP), Machine Learning (ML), some sophisticated models and a very large data set on which to train the AI engine.
AppZen not only has the technology to differentiate itself in the market, but also has incredible enterprise customer traction. Hundreds of smart, sophisticated customers, including companies like Amazon, Citi, Intuit, IBM, and Airbus have chosen the AppZen platform to automate their enterprise back office.
At Lightspeed, we’re extremely excited about our partnership with the AppZen team as they combine the power of cloud computing and AI to transform and modernize enterprise back office. For more information on AppZen, visit www.appzen.com
Arif Janmohamed is a Partner at Lightspeed Venture Partners. He lends significant enterprise cloud, AI and analytics expertise to the AppZen team. In his free time, Arif plays ice hockey with his wife, who yells at him for never passing the puck to her.
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