Dive Brief:
- PayPal Ventures and StepStone Group led a $30 million investment in the startup Rasa, a generative artificial intelligence company, according to an announcement on Feb. 14. Andreessen Horowitz, Accel and Basis Set Ventures also participated in the round.
- The funding round marks PayPal’s first investment in the AI industry. PayPal Ventures announced the launch of its new AI Fund to pour capital into early-stage stage AI startups in multiple sectors, the release said.
- Rasa, which currently works with banks, insurance, travel and hospitality companies, said it will use the funding to hire more employees in North America and Europe in marketing, sales, engineering, customer service and other positions, per the company statement.
Dive Insight:
PayPal is investing in artificial intelligence technology providers as the company seeks to integrate the technology into its own business. PayPal CEO Alex Chriss said last month that the payments platform plans to use AI to provide customers with purchase offers.
“We are thrilled to mark the launch of our AI Fund with our investment in Rasa,” PayPal Ventures Partner Alan Du said in a statement regarding the Rasa funding round. PayPal believes Rasa’s platform will allow “for enterprises to develop robust, conversational AI,” Du said in the release. “We have seen how its concierge solutions improve customer engagement and business performance,” he added.
The investment comes as PayPal is trying to regain its footing under new leadership. The company hired Chriss last year and he has been building his management team this year. The new CEO has said he’s seeking to streamline the company, by divesting some operations if necessary, in a bid to jump-start profitable growth.
The San Jose-based PayPal said this month that it’s cutting its workforce to reposition the company. Last month, the digital payments giant announced plans to eliminate 2,500 positions, amounting to 9% of its employee headcount. Earlier this month, PayPal CFO Jamie Miller hinted at the possibility of making more employee cuts in the future.
