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A startup taming AI language models to build virtual personal assistants that automate tasks on software platforms has moved to Columbus following an investment by Drive Capital LLC.
Layer has raised a cumulative $3 million since its founding this year in New York City. Columbus-based Drive is the most recent and lead investor in the seed round. Other participants include Rough Draft, Resolute Ventures, Alumni Ventures, Detroit Venture Partners and individual angel investors.
The proceeds will go toward hiring engineers and rolling out a self-service model next year – a key shift to enable faster growth without hours of customer service, co-founder and CEO Jonah Katz said.
“There’s this massive opportunity to provide this technology to all these smaller and medium-size companies," Katz told Business First. "We’re taking a fundamentally different approach to solving this problem than anyone else on the market."
Katz and Andrew Hamilton, co-founder and CTO, started working out of Drive's Short North office a few weeks ago. Friends since kindergarten in Cleveland, they're now also roommates in a Columbus apartment – better at their price point than anything they could find in New York, Katz said.
This year's exponential growth of AI language models such as ChatGPT created both buzz and skepticism. Layer's founders say they have unlocked a safe way for customers to gain entry to a long-lasting change in technology interface.
Layer's subscription software builds "copilots," which unlike a chatbot can actually create and execute commands. Customers use them to automate mundane tasks like filtering data and setting up if-then commands in software platforms.
"The way we use software, the way we interact with computers, is going to shift from click-and-drag to a much more natural, much more human interaction, which is natural language," Katz said. "I can say, 'Hey, do this for me,' and it will automatically know how to do it without me punching a bunch of buttons.
“I could just say or type: ‘Create an email campaign targeting CTOs of large tech companies and schedule it for early tomorrow morning,’” he said.
The technology could have many more uses, said TJ Dembinski, the Columbus-based Drive Capital partner who led the investment.
The $2.2 billion firm has an "outbound" approach, Dembinski said. He saw what Layer was doing and made first contact via LinkedIn.
The lifelong friendship between business partners with complementary skills – business development for Katz and complex software engineering for Hamilton – was a big plus.
"One of the biggest risks of any early-stage investment is the team," Dembinski said. "We have a high degree of confidence they’ll be able to work together.
"They have some very promising early customer traction with customers who have used the product and gained value. ... They're maniacally focused on solving problems for their customers – they have a planet of opportunities."
Still in its first months, Layer has booked subscriptions that would annualize to $70,000 in recurring revenue, Katz said. Financial services are the first target market – another reason to locate in Central Ohio.
Just like natural language AI for search, software copilots so far have been unreliable in other attempts. Tech giants have spent millions trying to build their own, Katz said.
"Large language models mess things up," he said. "They often hallucinate and spew out things that just aren’t true."
If that happens with a copilot that can execute commands, it could damage a company's core database. Layer created a proprietary data structure that validates a workflow is safe before executing.
"No other framework is able to do that," Katz said.
The back-office specificity of Layer's model works better than a general AI search engine seen in popular culture, Dembinski said.
Last year, a different startup by Katz and Hamilton, Wav AI, was selected for Entrepreneurs Roundtable Accelerator in New York. That startup focused on AI for sound detection, such as city sensor systems for locating gunshots.
While working in the accelerator co-working space, they heard fellow startups complain about the cumbersome steps of working with software platforms and unreliability of copilots then on the market.
The pair started selling their in-house software to fellow accelerator companies, Katz said. Now Entrepreneurs Roundtable's website credits Layer as the company that emerged.
Drive did not force the move, but similar to past Columbus relocations by portfolio companies, Layer's choice is "indicative of the broader opportunity here," Dembinski said.
“We saw it as a great opportunity,” Katz said. “There’s a ton of talented engineers.”
Drive, especially its team devoted to finding tech talent, has helped the startup, Katz said.
“They’re sharp investors," he said. "We've very excited to bring them on board.”
After high school, the two friends parted for different colleges – Wisconsin for Katz, Cornell for Hamilton – then started building together. "We've built a bunch of different things, failed a bunch of different times," Katz said.
"When you’re building a company with someone, you go through the highs and lows together,” Katz said. “We learn a ton from each other. We have a strong friendship; we also have a strong business relationship. They fluctuate.
"Andrew’s the only person in the world who’s as persistent as I am. We’re really excited to build something that really matters."