Layer: Cost-Effective AI Copilots
Enabling companies to autonomously launch AI solutions
Alumni Ventures portfolio company Layer presents an attractive AI software alternative for small and mid-sized businesses (SMBs). Layer allows companies to easily deploy and manage cost-effective AI copilots — next-gen chatbots that serve as dynamic virtual assistants. Layer’s copilots seamlessly integrate with complex web platforms, enhancing user experiences and streamlining web interfaces.
Enterprise Demand for AI Solutions
It’s difficult to overstate the potential benefits of AI for business, creative, and personal applications. According to PwC, AI could contribute up to $15.7 trillion to the global economy by 2030 — “more than the current output of China and India combined.”Even just narrowing to Enterprise spending, the total is projected to surpass an astounding $300 billion by 2026.
However, the resources required to implement an AI platform have proven prohibitive for many small and mid-sized businesses (SMBs). Third-party AI software typically costs $40,000 a year, while a custom solution can cost as much as $300,000. For example, Microsoft’s 365 Copilot AI is only available to customers with 300+ users for $30 per month, per user — or $108,000 annually.
The Next Evolution of ChatGPT
AI copilots are considered the next evolution of chatbots. While popular chatbots like ChatGPT can respond to specific prompts, copilots are trained to serve as ongoing virtual assistants. A copilot is programmed with complete knowledge of a specific platform and designed to take actions on a user’s behalf.
Layer is creating AI copilots that are lower cost and easy to deploy on any web app. The company’s solution is driven by document object models (DOMs), which make web pages easier for programmers to navigate by organizing HTML in a structured hierarchy. DOMs are critical for collecting data from webpages to effectively train and test AI copilots.
Layer is building a framework that allows developers to build and deploy copilots autonomously. The company is initially focused on SMBs in the financial sector but envisions a future where software companies across sectors and sizes use Layer to build their own production-grade copilots at a fraction of the cost of doing it today.
What We Liked About This Opportunity
Driven, Entrepreneurial Founding TeamLayer’s co-founders have demonstrated a high level of grit early in their careers. CEO Jonah Katz and CTO Andrew Hamilton previously founded the sound detection platform Wav AI, which was selected for the Entrepreneurs Roundtable Accelerator in New York.* They founded Layer after hearing fellow founders complain about unreliable and inaccessible AI copilot options.
Strong Customer Appetite for AIDemand for enterprise AI solutions is robust and growing. Global spending on AI software, hardware, and services passed $100 billion in 2022 and is expected to triple in the next four years.**
Conviction from Established Lead VCDrive Capital is a stage-agnostic VC with $2.2 billion in AUM.*** The firm was founded by former Sequoia Capital partners Mark Kvamme and Chris Olsen to focus on startups outside of Silicon Valley. Drive has a reputation as a high-touch investor, a notable benefit for Layer’s young founding team.
*Carrie Ghose, “AI ‘Copilot’ Startup Moves to Columbus From NYC After Drive Capital Investment,” Columbus Inno, October 25, 2023
**Michael Shirer, “Worldwide Spending on AI-Centric Systems Will Pass $300 Billion by 2026,” IDC, September 12, 2022
***Dan Primack, “Ohio’s Drive Capital Moves Forward As Co-Founder Mark Kvamme Takes Detour,” Axios, November 22, 2022
How We’re Involved
Bascom Ventures (for the University of Wisconsin community) sponsored Alumni Ventures’ investment in Layer’s $3 million seed round in October 2023. Bascom had a natural connection with Co-Founder and CEO Jonah Katz, who studied at UW-Madison. Our ~50 investing professionals leverage their alumni connections, personal networks, and AV’s 600k+ member community to source promising investment opportunities.
Drive Capital led this seed round, with additional participation from Resolute Ventures, Detroit Venture Partners, and Expansion Venture Capital. AV sibling funds invested in the round include Bleecker Street Ventures (for the NYU community), Stadium Avenue Ventures (for the Purdue community), and AV’s AI Fund and Total Access Fund.
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