Contxto – In light of Latin America’s growing interest in Y Combinator’s latest batch, it’s reassuring to see past alumni like Emi Labs attract investment dollars.
The Argentina startup that develops AI tools for human resources (HR) recently announced a US$2 million investment led by Khosla Ventures, one of Silicon Valley’s most famous funds.
Funding will go towards solidifying operations in Mexico and its native Argentina, as well as exploring other markets including Brazil. The startup is also planning on developing and improving its machine learning algorithms.
Interestingly, the company sent the entire team to San Francisco to participate in the recent winter batch instead of just the founders. After Demo Day, Emi Labs landed the valuable convertible note from Khosla Ventures.
I’m not sure about the exact timeline here since the Demo Day was a few months ago. Nonetheless, news about the round just broke.
Khosla Ventures, founded by Sun Microsystems co-founder Vinod Khosla, manages over US$5 billion worth of assets. This is the first time it has invested in an Argentine company.
“We are proud to be able to support the team formed by Emi in its mission to streamline the selection processes using Artificial Intelligence,” said Evan Moore, partner of Khosla Ventures. “With this proposal, partners are saving millions of dollars in recruitment and helping candidates find more and better opportunities.”
How does it work
Banking, retail and customer service partners use Emi Lab’s HR chatbot to accelerate the hiring process among massive pools of candidates. That’s to say, partnering businesses designate repetitive tasks to the software, such as contacting or screening individuals. This saves them time and resources.
In turn, job seekers proceed to fill out applications via texting for automatic consideration. On average, this takes between five and seven minutes, available during any time of the day. If candidates are qualified, they then physically meet a recruiter, take a survey or do an aptitude test.
Regarding numbers, the bot allegedly saves recruiters five hours per day by pre-filtering candidates and scheduling interviews. Waiting time between sending an application and having an interview also goes down by 82 percent, which greatly increases productivity for both partners and applicants.
Since its March 2018 founding, the company has been working with several clients, so its traction certainly caught the attention of YC. With offices in Mexico and Argentina, it’s also active in Chile and Uruguay due to how the bot “humanizes” the hiring experience.
Corporations such as Burger King and Farmacity use Emi Labs’ platform.
Mission-based yet profitable bot
After working for years at Quasar Venture Builder, and then meeting again at a non-profit, CEO Mateo Cavasotto and CTO Andres Aslanian realized that economically disadvantaged people had trouble landing jobs. Resumes and applications were part of the problem.
To remedy this, the chatbot streamlines the experience, eliminating any hidden biases in the hiring process. Rather than HR representatives interacting with candidates, the algorithm does it. That’s to say, it reviews profiles and oversees every stage.
Within Emi Lab’s first year of operations alone, it screened over 300,000 hopefuls. Keeping that in mind, the recent Khosla investment wasn’t about putting the startup in the green numbers, according to the CEO. Rather, it was more about team expansion.
“Even before we launched the round, we were totally profitable,” said Cavasotto. “We didn’t need the money to survive. We took the capital to be able to add incredible people to the team and take risks.”
Betting on Latin America
For Cavassoto, Khosla’s funding is a great advantage but also a great responsibility. According to him, if this investment fails, Khosla and their investors could tarnish the reputation of the Latin American startup ecosystem.
I agree up to a certain extent. If the investment happens to be a bad one because of mismanagement, it could leave a bad reputation. However, most U.S.-based VCs understand their game is a risky one. If the investment fails for legitimate reasons, capital most likely won’t disappear just like that.
In Cavassoto’s opinion, Latin American startups are actually trending among certain audiences.
“Today, being from Latin America is of great value in Silicon Valley,” said Cavassoto. “For them, it is a booming region. Investors didn’t see the opportunity before, but companies like Rappi and Grin opened the eyes of San Francisco investors.”
Perhaps they will always see us with caution, or they will not understand some specific problems that companies experience here, but now is a better time than a few years ago to be a Latin American entrepreneur.
Over the past few years, we’ve spoken with numerous Latin American founders trying to raise capital in the United States. For most, it’s definitely not as easy as it sounds. Matter of fact, many foreign investors won’t even consider Latin American startups.
Slowly but surely, though, others are starting to develop a sense of FOMO (fear of missing out) in the region.
-VC & JA
