Ripcord, the Silicon Valley startup known for its innovative paper digitization robots, is reportedly raising $20 million to $25 million in a new funding round. The company aims to achieve a pre-money valuation of $110 million. Notable participants in this round include Alphabet’s GV, Lux Capital, and MUFG, a prominent Japanese bank chain. While both GV and Lux have previously invested in Ripcord, MUFG’s involvement marks a new partnership for the company.
Key Takeaway
Ripcord, the paper digitization robotics startup, is raising $20 million to $25 million in a new funding round, with a target valuation of
10 million. Despite past controversies, the company has achieved significant milestones, including securing partnerships with the IRS and the U.S. Air Force. Additionally, Ripcord’s revenue has been steadily increasing, and it plans to introduce a generative AI tool, Docufai, to further drive growth.
Having already secured a considerable amount of funding from investors such as Kleiner Perkins, Silicon Valley Bank, Tyche Partners, Icon Ventures, and Baidu, Ripcord aims to bring its total raised amount to approximately $150 million with this new round. It is worth noting that Apple co-founder, Steve Wozniak, participated in Ripcord’s series A funding.
However, the current funding round is significantly smaller than Ripcord’s previous Series B round, which closed at $45 million. The reason for this smaller funding and the three-year gap between funding rounds remains unclear at the moment.
Controversy Surrounding Ripcord
Ripcord has faced controversy in the past, potentially contributing to its current funding situation. Former employee Perry Coneybeer made serious allegations against the company’s former CEO, Alex Fielding, and other unnamed employees. According to Coneybeer, Fielding engaged in inappropriate behavior, including sharing explicit stories and making crude comments about her breast milk pumping. Additionally, Coneybeer claimed that she faced retaliation after reporting inappropriate sexual behavior to HR. In response, Ripcord pledged to investigate the allegations and take appropriate action. Interestingly, Fielding eventually became a director on Ripcord’s board before leaving the company to establish a space startup called Privateer.
Ripcord’s Achievements and Growth Potential
Despite these challenges, Ripcord has made significant strides and formed valuable partnerships. The company announced securing a pivotal deal with the IRS for tax document processing valued at over $4 million and an expanded deal with the U.S. Air Force. One of Ripcord’s investors, MUFG, also serves as a customer with an annual contract value of $5 million. Furthermore, Ripcord is in the final stages of a substantial agreement with Wells Fargo.
Ripcord’s revenue has been steadily increasing, reaching $11.8 million in 2022 compared to $5.9 million in 2021, according to the company’s pitch deck. While the company is not currently profitable, it expects to generate $22.5 million in revenue by the end of 2023 and aims to reach $49.2 million in revenue by Q4 2024.
Ripcord’s Innovative Approach to Document Digitization
Ripcord’s success can be attributed to its unique approach to document digitization. The company utilizes physical robots equipped with computer vision, lifting and positioning arms, and RGB cameras. These robots can handle a variety of document formats, remove staples, and autonomously scan the documents. Ripcord partners with logistics firms to transport files with barcoded labels containing metadata to its facilities, where the scanning takes place. The scanned documents are then either stored for compliance purposes or shredded and recycled.
On the software side, Ripcord’s platform integrates with various third-party business intelligence and data processing software, allowing for seamless uploading of documents to the cloud and conversion into searchable PDFs.
Future Growth Plans with AI Integration
Looking to the future, Ripcord is focused on further expansion and growth. The company recently integrated with OpenAI and is developing a generative AI tool called Docufai, scheduled for launch in September. Docufai is a freemium tool designed for document discovery, allowing customers to ask questions about scanned documents and receive answers. Ripcord plans to onboard 1,000 users to Docufai by the end of Q3 2023 and is expected to release paid tiers, including teams and enterprise options, in 2024.
