Why We Invested In Fathom AI
/At Frontier, we’ve established themes that drive our areas of investment interest. Additionally, we use tested business frameworks to identify companies which have the highest likelihood of success and where we can add the most value, based on our unique strengths as a firm. We love to back founders and companies who are uniquely positioned to transform existing industries and disrupt the status quo.
That’s why we’re excited about Fathom AI, our latest addition to the Frontier portfolio. Fathom AI provides an AI-powered text analytics solution for businesses. Text analytics, also known as Natural Language Processing (NLP), plays a crucial role in extracting insights generated in large volumes of unstructured data. Fathom’s software platform transforms open-ended text responses into actionable insights, making it more efficient to interpret qualitative data at scale. The company has generated traction with customer profiles, including consumer-facing brands, tech companies, consultancies, and market research agencies. In brief, wherever there are users providing feedback, Fathom can help find the signal in the noise! Our conviction in this opportunity was driven by a few key factors:
Team: CEO Michiah Prull and COO Tovah Paglaro are multi-time founders, building a solution informed by years of experience solving this pain point for customers. From a technical perspective, both co-founders have a deep understanding of the quantitative foundations and qualitative inferences underpinning its technology. And yet, they’re also able to set company strategy, execute against plan, and nurture long-term customer relationships - this a compelling skillset! At Frontier, we believe a company takes on the culture of its founders. We found this team credible, resolute, and focused, with the poise and maturity needed to build trust with clients of any size.
Total Addressable Market (TAM): It’s estimated that 80-90% of the data an organization generates is unstructured, the majority of which is text-based. Within this repository of language and data, there’s a treasure trove of knowledge to be gained – opportunities for process optimization, improved customer relations and retention, user feedback to drive product roadmaps, etc. With this potential for impact, it’s easy to understand why the Text Analytics market is forecasted to grow past $10 billion in 2024 and $50 billion by 2029, as businesses large and small look to gain new insight from their data. Today, Fathom is targeted to community-generated data, such as customer feedback, public opinion, and employee sentiment. While these use cases represent a massive category on their own, there’s been increasing adoption across industries and new applications emerging along the way. With an extensible platform like Fathom’s, the opportunity for delivering value to customers grows even larger.
Technology: Fathom’s platform leverages a blend of computer intelligence and human curation. Its technology was developed over 5 years while partnering via closed API with OpenAI, Microsoft, and Anthropic, and combining this learning with the company’s own models, built on tens of millions of proprietary data points. This AI-driven insight is augmented further by Fathom’s own personnel, experts who supervise the application of models to ensure the highest level of accuracy, detail, and actionability. As a result, businesses can pinpoint critical issues affecting customer satisfaction and churn, allowing for segmented data analysis to better understand their customer base. It’s a novel approach that’s optimized for accuracy, cost, and scale.
In summary, Fathom AI provides an opportunity for Frontier to invest in the future of unstructured data analytics. This innovation is powered by computer intelligence, natural language processing, and advancements in artificial intelligence – as well as a rock star leadership team! We’re thrilled to invest in their next chapter of growth.