UC Berkeley Dropouts Raise $28M for AI Marketing Automation Startup Conversion

Conversion, an AI-powered marketing automation startup founded by two UC Berkeley dropouts, has raised a $28M Series A led by Abstract, with participation from True Ventures and HOF Capital. The company was born out of a personal need for a marketing tool, which they later discovered had a broader appeal. The founders dropped out of college at 19 to work on the startup full-time, living frugally in a two-bedroom apartment with five roommates.

Conversion, an AI-powered marketing automation startup founded by two UC Berkeley dropouts, has raised $28 million in Series A funding led by Abstract, with participation from True Ventures and HOF Capital. The company, which was born out of a personal need for a marketing tool, has identified a broader market appeal and is now poised for significant growth.

The story of Conversion began when co-founder and CEO Neil Tewari, now 24, was in high school. He was caught watching a TechCrunch Disrupt livestream during class and was sent to the principal’s office. On the drive home, he explained his interest in entrepreneurship to a family friend, who later became one of the startup's first investors [1].

Neil met his co-founder and CTO, James Jiao, at UC Berkeley. Together, they tried building various products, including a tool for marketers to buy product placement ads. After signing up for HubSpot to manage their own marketing tasks, they realized the potential for automation and developed internal features to enhance their marketing efforts. This initial tool sparked the idea for Conversion, an AI marketing automation platform [1].

The founders conducted extensive customer discovery, interviewing VPs of marketing from businesses ranging from 50 to 500 employees. The feedback was overwhelmingly positive, highlighting the need for better automation tools. This validated their idea and provided a clear market need for their solution [1].

Conversion secured $2 million in seed funding, which allowed Neil and James to drop out of college at 19 to work on the startup full-time. They lived frugally in a two-bedroom apartment with five roommates, dedicating every dollar to product development [1].

The recent Series A round, which brought in $28 million, underscores the immense confidence investors now place in Conversion’s vision and execution. This funding will enable the company to scale operations, expand their team, and further innovate their AI marketing automation platform [1].

Conversion’s AI capabilities are an intrinsic part of its architecture, providing a significant competitive edge. The platform can seamlessly perform complex tasks like lead enrichment and automated personalized follow-ups, which legacy systems often struggle with [1].

The company’s rapid growth is a testament to its effective product-market fit. Neil Tewari revealed that Conversion is nearing $10 million in Annual Recurring Revenue (ARR) over the past two years. A striking 90% of their customer base comprises midsize businesses that have actively replaced their legacy marketing applications with Conversion’s solution [1].

The field of Marketing AI is increasingly crowded, but Conversion maintains a distinct strategy by focusing on businesses currently using older marketing tools. They aim to demonstrate superior automation and AI capabilities to compel established businesses to switch from their entrenched, yet less efficient, legacy systems [1].

The founders’ resilience and frugality, demonstrated by their early commitment and living frugally, instill confidence in investors and employees alike. Conversion’s success serves as an inspiring example of how a clear vision, combined with relentless execution and a deep understanding of market needs, can transform a nascent idea into a thriving business [1].

References:
[1] https://bitcoinworld.co.in/ai-marketing-startup-funding/