Netic raises $23M Series B from Founders Fund to bring AI agents to HVAC, plumbing, and essential services

this has been talked here in this program too. There's a national shortage in skilled labor in these industries too. So, it's actually I mean Jensen talks about it a lot and it is the type of labor we need in the country and until then they're all Is that what Jensen was talking about?

I feel like he said he like like we you know we don't have enough plumbers but I felt for some reason he was talking about like plumbing in data centers like it's the same right so HVAC technicians or plumbers what the data centers need cooling or not many or to be able to stand it up but if you think about it um it takes a lot of years to get actually trained for these jobs probably more than I went to school for at Stanford or you went to school for actually it's it's very important and then afterwards you have to do a in real life the training as well.

So with data centers and consumers and businesses across the world the need for these businesses a lot and not it's not only about HVAC plumbing electric when you say essential services right it's also across energy and solar or um consumer health like the bake club right that we have been serving.

So it's really the things that everybody in their daily lives need and has to interact with. Yeah. Walk through the typical stack of of HVAC repairmen. I I imagine somebody could just have, you know, like a Yelp page and a Venmo account.

Then some of them have a full website with a booking system and almost like their own little mini ERP, probably not something they built themselves. Maybe they have a Shopify site or something.

And then at a certain point, they get a roll up happens, they get bigger, they get more uh industrial, they get more mid-market. Uh and then I imagine that there's some sort of central, you know, point of record. uh are you plugging into that? Are you trying to replace that?

Are you trying to be the first uh the first choice for setting up every all the touch points? Yeah, so we primarily work with what you described as midmarket and large enterprise.

So a lot of these businesses are owned by private equity and uh or still owner operated, but they have built it from zero to hundreds of millions of dollars in revenue. So they will actually uh I love that you went through that stack. they might have a more sophisticated tech stack than here, right?

So for these businesses run on ibita, right? Okay. So it's extremely important that they think about their efficiency, the customer relationship and how do they serve their communities.

So primarily it will focus on you know what type of data they have and where do they keep it various software solutions and of course third party aggregators where they might do advertising.

So we will partner with different solutions that they might have to um take make benefit of any of the data they can but primarily what we're doing is bring frontier AI to these industries so that when their demand is very high instead of losing that they can handle it all at the same time and when the demand is soft they can generate net new demand.

Right?

as you know these industries just like we talked about San Francisco today is very volatile due to seasonality or some other external effects that they can't really control right um so that's why it's very important how you need to be efficient when the demand is coming you have to capture it all and when it is not you're thinking about it's like [clears throat] if you can't sell during Black Friday if you're in Q4 you're cooked like you're probably not profitable exactly or even how to predict the next thing like one One of our customers, there were tornadoes in Missouri a few months back and before the tornado literally happened using Netic, right?

Reached out to potentially affected areas and talked about generators. How would you feel if your electricity went in the studio? You would not like that because your business would be down, right? And but then afterwards, I tried to get a generator when the power was out last year.

It was a denied by doesn't work [laughter] well. It doesn't work once the once the crisis stops out because the electrician like, "Yeah, buddy. I got 200 people calling us to do the same thing. I will I will help you out with the best one. I got one. I'm covered now.

But also, you know, when the disaster actually happened in 90 minutes, maybe they got thousands of calls, right? So, how do you help?

But it was great for them because they could answer every call with NetC and they had already maybe rescheduled the non-essential jobs that they had so that they could help the community in that moment.

So that type of proactivity and focusing on um the future and like revenue generating interactions for the businesses is very important for these talk about traction. Yeah, sure. Yes. You raised a new round. I did. Today we announced very very low delution.

Let's let's let uh let's let her hit the as hard as you as hard as you can. As $23 million series B led by Founders Fund hit that gong. Wow. with authority at a 45 $450 million cap, which is a strong 4x step up in valuation. Very low delution. Very low. Yeah. Why? Yeah. Why?

Well, I think from the beginning, I really You hear this good omen still going when it still goes the same strength we put into our business, right? No, I mean that is actually the answer. From the beginning, what was important to me is that we build a business with strong fundamentals, right? It is not about the hype.

It's not about the valuation.

For me the most important thing even in investments we work with the best and we're lucky and grateful that same people triple down in a row um in netic and when you have a business with strong fundamentals and strong margins and scaling efficiently you don't want to raise more than you need and if you do that by the way that would be a detractor actually in the type of talent that we're hiring today they do want to work in nimble teams they do want to run through walls.

They want to be here because they want to build the future of S. [laughter] Get one of the one of your customers to build us a wall. We'll run through it. Exactly. I have a question about models.

Uh we we we were talking to Brian Chesky and uh he's starting to add features to Airbnb that uh that allow the booking of like a chef. It's a very different it's a very different uh model uh for someone who's traveling. they want a private chef or something like that.

Uh but he mentioned that he's having a lot of success with open-source models. Obviously, he's operating at massive scale. Uh and so every dollar counts. Uh are you seeing luck with open- source models or are you sticking to the the closed source models? Yeah, you actually can't stick to one. Yeah.

Uh the way to the because if you think about it, maybe the difference there is we serve essential services industries. I'm like a utility to these companies. I can't go down. I can't be wrong. So the way that so we build our own ML orchestration, right?

The way that you build um and think about models and what's really helping with each task that you need to do in that orchestration is very important. So you have to think about what's best fit in terms of address verification in this case versus understanding what does Jordy need when he's calling me, right?

Or messaging me. So that would be need finding.

So the whole point is how do you think of these modules and what do they need to get done and what is the model that can give you the best answer right and you have to obviously build a lot on your internal evolves to be tracking that continuously and make any changes as you need right so today definitely like we do use quite a bit of more closed source um uh models but depending on your evolves if something is not you know like keeping up with what we need and the new functionality we add.

We would always test and think about any other models. What about 10 years? You think in 10 years you before that are are you using voice models at all like like you have like Yeah, we don't do voice to voice.

We do have voice actually today we support our customers from voice, text, online like any type of channel you can we are we're the single inbox right for anything that they're really getting. Um so voice yes we support but voicetovoice is actually not there yet speech to speech.

So we do really orchestrate all of that in terms of speechto text reasoning models and then text to speech afterwards to really give that accuracy reliability as well as the flow the feel right and hopefully maybe in 10 years you were asking we will have to think think that not in 10 years maybe even a few where's voice speech to speech is going so according to that we have to what's the sales cycle like to be frank with you I think we really sell based on ROI.

So we show our customers right and they can talk to our existing customers at any point anyone interested uh private equity firms that we support large companies private equity firms been one of the main channels in here where they're just like hey we have a we have a roll up of a bunch of different underlying businesses let's roll a number of rollups and we want the same software we have a roll up of rollups I mean that's what private equity firms are these days today um that is correct it has been one of the good channels but also it can be direct to large companies itself.

I think the reason we love working with private equity because in today's world they understand the importance of AI and they're looking for an AI partner. Yeah. Right. It's not really about we need an AI strategy. What can we buy? Yeah.

Actually, you'd be surprised like I think a lot of tech companies may be looking for something or a strategy to put on a board deck. A lot of these businesses I work with, I will say they're absolutely incredible and better entrepreneurs than entrepreneurs in Silicon Valley sometimes I see.

And they are focused on real value. They've experienced free cash flow. Yeah. It's I mean you can't hide behind raises and valuations, right? Like all you see is that does this help my revenue? Very easy. And for me too, I can say hey I will not give you any random words AI this AI this blah blah blah.

No, let me show you how is this going to affect your revenue. Let's talk about that. So, when you do it that way, I think the cycles are pretty fast. Yeah. Exactly. Do you think people are scared to compete with you? [laughter] You seem like a pretty formidable opponent. Um I don't know.

I I hope not because I You enjoy crushing. I [laughter] Yeah, I do enjoy crushing. Crushing. Uh how are you? Not only me, my team too. And this is just for them from here. You all that are watching right now, you're all beasts. And there's no one else in this world that I would rather work with other than you.

Incredible people coming from scale, HRT, Data Bricks, MIT, Stanford. But I don't want to even talk about the accolades. Who cares?

They all most of them have deployed AI applications in the real world in production and they run through walls every day to deliver for the real world even though they could be anywhere they could go in any [clears throat] company. Well, for the series C, we will get a wall built and you can run through. Exactly.

I will be doing that. Yeah. Thank you so much for coming on the show. Amazing progress. Congratulations. Thank you for having me. We'll talk to you soon. Um, we have one more guest. Stay with us. The market is crashing. Everything is in turmoil, but the business continues. The show goes up.

White House, The White House needs to announce mortgages. Second round. Let's move to 100year mortgages. Uh, that will be the solution to all this. Uh, no. The only thing that can save us right now is numeral. com, sales tax, and autopilot. Spend less than five minutes per month on sales tax compliance. Also, Finn.

ai, AI, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bakeoffs, number one ranking on G2, and our next guests are here. Let's bring them into the TBPN Ultradome. We have Jeffrey Katzenberg and Tomas, welcome to the show, folks.

Thank you so much for taking the time to come down to the TBPN Ultra Dome. Good to see you again. Uh, congratulations on the news. Uh, let's get some introductions first. Uh, who are you? What uh organization are you with? Let's kick it off there. I'm Tomas Pig. I'm the CEO and founder of Olympic. Thank you.

Jeffrey Katzenberg, uh GP at uh Wonderco. Uh third time on the show, second time on the show, something like that. But first time on the show here. Uh congratulations. And what's the news today? Oh, well the news is is that we actually just raised $145 million. Fantastic. Why don't you go hit that bomb, please?

Enjoy the dragon. Yes. Yes. Yes. It's a Whoa. around the world actually. You haven't seen that before. Different style. Different style. That was a very aggressive ring. I like it. I like it. It's still ringing now. It has a nice sound. So, uh, take us through the business. Uh, how how are you pitching it these days?

So, what's really interesting about it is we do a little bit of a different thing in the AI space. We do causal AI. Mhm.

And really what our executives that we work with and these Fortune 500 and Global 2000s want to know is they want to know every chain reaction and lever that moves the metrics that they care about in the business at any time. And so where we started originally was on the marketing and sales side.

And so they would be like, "Hey, I spent a $100 million on a stadium name, all these unknowables, these large content pieces, all this brand. We all know it worked at the time. " Mhm. But nobody could actually prove down to the dollar down to the actual effect of what it would be.

And so when we uh built the company originally, we were you want to know how to shine a light inside this black box and actually be able to get the real dollar value so that you can start telling stories because there's been so much of this improvement in say the programmatic side of the house buying these ads.

Well, what ended up happening is once we built that, we found out it actually worked really, really well and we got a lot of incredible clients and then they started to ask us to do other things like being like, "Oh, hey, now can you see how all that affects foot traffic?

Now, can you see how that affects my ordering systems? " And as we started putting this causal model out further and further, we realized it actually worked on an incredible amount of stuff. And so then our clients started asking