When asked about investing in AI startups, venture capitalists often mention that businesses are experimenting with AI solutions but are slow to implement them in their existing business processes.
However, there are exceptions, one being the rise of AI sales development representatives (SDRs) utilizing large language models (LLMs) and voice technology to personalize outreach emails and automate calls to potential customers.
Shardul Shah, a partner at Index Ventures, has noted the success of multiple AI SDR companies in a short period, a trend rarely seen in the startup world.
Index Ventures has yet to invest in these startups, as it is still early to determine their long-term success and effectiveness compared to traditional human outreach methods.
Small businesses embrace AI sales LLMs
Arjun Pillai, founder of Docket, attributes the high adoption of AI SDRs to the accessibility of these tools for small and medium businesses seeking to improve their email response rates.
While AI SDR startups like Regie.ai, AiSDR, Artisan, and 11x.ai are experiencing rapid revenue growth, it remains uncertain if they are truly enhancing sales effectiveness for businesses.
There is skepticism within the venture capital community regarding the long-term sustainability of AI SDR adoption despite its rapid growth.
Will established companies overpower AI SDR startups?
Chris Farmer from SignalFire believes that without unique data access, AI SDR startups risk being overshadowed by established players like Salesforce and HubSpot.
Investors are cautious about the potential free offerings from competitors that could threaten the growth of AI SDR startups, as seen in the case of Jasper, a copywriting startup.
Overall, investors are acknowledging the quick adoption of AI SDRs but are unsure if this trend will persist in the long term.
Updated: This story was originally published on August 22 and was updated December 26 with comments from Tomasz Tunguz.
