Khosla-Backed AI Startup Debuts with $80 Million in Funding

Bloomberg

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00:00David, I would love to start with you. You're trying to tackle the concept that you have labeled

00:05the Franken-stack. Even though the term is new to me, the concept is something that's been

00:12discussed on this program a lot. Just explain what Revo wants to achieve here.

00:17Sure. Well, first off, thanks for having me. It's a big day for us.

00:21Look, AI is the biggest shift in enterprise software since the cloud.

00:25But the reality is revenue teams are still stuck in, like you said, what we call the Franken-stack,

00:29which is a dozen different tools that don't really talk to each other, causing sellers to

00:34waste over 70% of their time wrangling software instead of talking to their customers. And that's

00:39really painful. Revo is looking to fix that via one unified revenue operating system built from the

00:46ground up with AI at its core. And with this 80 million raise, we're scaling quickly to help all

00:51companies win in the age of AI. Vinod, I was talking with my team this morning about the structure of

00:58this round. And so it's basically a combined seed and series A. And Revo is coming out and kind of

01:04announcing itself to the world. Would you kind of give us the backstory? You know, you are an

01:09experienced investor in the world of technology. When this crossed your desk, how did you know that

01:15you needed to get involved? And how did you determine at this very early stage the potential that Revo had?

01:22Well, the opportunity didn't actually cross our desk in a traditional way. We've known David for a long

01:31time, from DoorDash to OpenDoor to OpenStore, sorry. And now Revo, we've been incubating ventures with

01:40him. My partner Samir has worked closely with him on Revo. And we cooked up the concept and brainstormed it and

01:50thought it was important enough to do. In the age of AI, I think most applications and application stacks need to be

01:58rethought. And this is David just a superstar on to know. So it was pretty easy.

02:04Vinod, is this an example of you investing in the known quantity founder then, rather than the idea?

02:15Absolutely. When we invested, the idea wasn't clear. That was a year and a half or two years ago. But the founder was very clear.

02:25David, I'm trying to track the growth that you've had. So spring of 2024, you kind of come up with the idea, I guess,

02:35incorporate a business. And you've hired, I guess, aggressively, you know, you're a sub 100 people still, but you've

02:42basically gone to companies that are well known globally, not just here in the Valley, and taken the best people you

02:48can. What was that like?

02:51Well, yeah, that's, that's, you're spot on there. The company you build, taking a page out of Vinod's book, but the company you

02:59build is a, the team you build is a company you build, not the plans you make. And when we thought about tackling the space of

03:05unifying all of go to market tech in one system, expanding marketing, sales and success, we really needed to make sure that we had the

03:13talent density, both from a technical perspective, but also from a go to market to really bring together the combination of the

03:20depth of domain knowledge, plus the ability to access the first party data to really pull this vision off. So global talent is

03:28necessary for us to make this a reality.

03:32David, what else do you need the $80 million for?

03:34Yeah, well, it's over the next few months and quarters and years, our vision is clear, we need to continue accelerating our

03:46product roadmap to build out both the breadth of the surface area to serve our customers, but also making sure that every

03:53single capability is the best possible from a depth perspective. But more importantly, in the age of AI, context

04:00matters. And it's very important for us to double down on making sure that our AI operating system is able to work

04:06seamlessly across every single one of these modules, capabilities, jobs to be done. So we're not replicating another

04:13Frankenstack for the future world. So that's what we're going to use the proceeds to do.

04:20Vinod, I go back to you with the concept of the Frankenstack. You know, you're invested everywhere. One of the first checks

04:28into open AI, the world has changed a lot since then. You know, we had yesterday, Sridhar from Snowflake on the

04:36program, talking about the problems right now and in the data layer. What do you make of the Frankenstack? Is that a

04:43real thing? Or this is just a marketing opportunity around this round?

04:47No, I think it's a real thing. Of course, AI enables each startup to do a lot more than it could do.

04:5320 engineers can do the work of 60 engineers if you use the productivity tools AI enables.

05:00But more than that, the user experience can be dramatically different with the help of AI.

05:07As I like to say, in the old world of applications, users had to learn an application and they learned

05:14each vertical stack. In the new world of AI, the application learns the human and responds the way it's

05:21shared. It's my favorite way to think about the transition AI makes possible. You don't have to

05:27be trained on an application like SAP or Hubstack. The application gets to know you and other humans

05:35on your team. And so it facilitates not only the function, but also workflow across people and

05:43across applications. I think it's a pretty important shift in software.

05:48To both of you, I'd like to end the conversation by going a little bit bigger on the world that we're

05:55in right now. David, if you could reflect on what it was like doing this round, there is a lot of

06:01energy behind AI right now. But at the other end of the spectrum, there is valuation concern.

06:07There's no difficulty in OpenAI or Anthropic, those kinds of frontier labs gaining capital.

06:13But there is a lot going on right now. Would you just reflect on what the last few weeks has been

06:17like in trying to close this? Well, you know, the fundamental difference is clear with our

06:23approach. We are AI native and purpose built for revenue teams. And so, you know, when you talk about

06:29the old players that are trying to build AI onto legacy stack, it just doesn't work. What we're

06:34building with Revo is akin to how Tesla built its cars, vertically integrated with AI at its core.

06:40This way, our AI is able to see and act across the full customer journey. So the old players are

06:49held back by their past. And the new players, to your point, you know, don't have the depth of domain

06:54knowledge, nor the access to the full suite of first-party data to pull this vision off.

06:59So Revo is building with both. And yes, it's hard, but that's really what makes it defensible and worth

07:04doing. You know, you're co-leading this round with your friends at Kleiner Perkins. Again,

07:11the same question, like what does the environment look like to you right now? This is a very sizable

07:16debut round. You had the conviction to do that. Well, it was a while ago we did the seed round of

07:2510 million. That wasn't announced. And now we just participated in the $70 million round.

07:30Obviously, we think highly of the team. But I think it's the magnitude of the opportunity this opens up

07:38for AI-native companies. I'd like to say most valuations won't hold up in the AI space, but the ones

07:46that are really high-quality companies will return disproportionate returns. In 2018, people said to me

07:55a billion-dollar valuation for OpenAI was too high. Then they said $26 billion was too high, and then $100 billion,

08:03then $300 billion, and then $500 billion were all too high. So a small percentage of the companies, I suspect

08:11much less than 5%, will actually do extremely well and return 10, 50, 100 times their money invested.

08:21Most companies will still lose money, and I think that's why you want to back quality founders like

08:28David. David's a superstar. I'd back him in almost anything he did.

08:32David's a superstar. I'd like to recognize that, but to the parties above being achieved just make everybody

08:35a great才能.

08:36David's a superstar.

08:37David's a superstar.

08:38Valeriansplementy

08:39a superstar.

08:40David's a superstar.

08:42David's a superstar.

08:45David's a Kanal serum going on to reassemble the Commissary

08:45astounding.

08:49David's a superstar.

08:50David's brightness

08:52a superstar.

08:53David's a superstar.

08:56David's a superstar.

08:59David's a superstar.

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