Otter.ai raises $320 million from General Catalyst fund

In short: Otter.ai, a tool that writes meeting notes, raised $320 million from General Catalyst’s Customer Value Fund.

What happened

Otter.ai said it has raised $320 million from General Catalyst’s Customer Value Fund, or CVF. Otter is known for recording meetings, turning speech into text, and creating notes and summaries.

This fund works differently from a typical startup investment. Otter said the CVF provides money without taking ownership in the company, and instead gets paid back based on how well the company’s marketing spending performs (similar to a store getting money to run ads and then sharing a cut of the sales those ads bring in).

Otter.ai said it plans to use the money to grow its business customers, expand to more countries, improve how it sells the product, and keep building new features. The company has been around for nearly a decade and had raised about $50 million before this, with its last round in 2021, according to PitchBook.

Otter said it passed $100 million in annual recurring revenue last year. That is a common subscription metric, meaning the company expects at least that much revenue each year from ongoing subscriptions if customers keep paying.

Otter also said 40 million users have tried its product, up from 25 million last year. It did not share key stickiness numbers like how many people use it each month or how many quit.

Why it matters

Meeting note tools are getting crowded, with many similar products fighting for the same workplace budgets. This large financing gives Otter more room to spend on sales and expansion, but it also puts pressure on the company to prove customers keep coming back.

Source: TechCrunch AI