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AI-powered advertising and marketing automation startup Conversion, based 5 years in the past by two UC Berkeley dropouts, has raised a $28 million Sequence A led by Summary, with participation from True Ventures and HOF Capital.
The corporate’s founding story sounds prefer it may have been an episode of the HBO present “Silicon Valley.”
The story begins all the best way again when co-founder and CEO Neil Tewari, now 24, was in highschool. He bought busted at some point watching a TechCrunch Disrupt livestream throughout class, was despatched to the principal’s workplace and needed to keep late.
Afraid to name his dad and mom and inform them why they needed to choose him up, he as an alternative referred to as considered one of their shut associates. On the drive residence, Tewari defined to the pal what bought him in bother. “I instructed him I had this curiosity [in entrepreneurship], and 4 years later, he was really the primary particular person to put in writing us a test into the corporate,” Tewari instructed TechCrunch.
James Jiao, Tewari’s faculty roommate at Berkeley — now Conversion’s co-founder and CTO — additionally dreamed of founding his personal firm, so the 2 tried constructing varied merchandise, like one for serving to marketeers purchase product placement adverts. They discovered the thought for Conversion once they signed up for HubSpot to assist them with advertising and marketing duties and determined to construct a number of further automation options to layer on high of it.
“It was initially for us,” Tewari mentioned of his startup’s tech. The co-founders loved constructing their inside advertising and marketing instrument a lot, they questioned if they might promote it and commenced reaching out to advertising and marketing executives for “buyer discovery” interviews.
“We really spent like two months doing like 160 buyer interviews with VPs of promoting, 50- to 500-employee companies, and bought a way more optimistic response than we may have imagined,” Tewari mentioned.
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Advertising groups had these instruments deeply embedded of their workflows, however everybody had related complaints in regards to the elements they couldn’t automate.
The duo had discovered their concept. The household pal launched them to extra advertising and marketing execs, which helped them elevate a $2 million seed spherical. At age 19, they dropped out of school to work full time on Conversion.
The founders handled their raised funds so frugally, they lived in a two-bed, one-bath condominium with 5 different roommates: two folks to a room, with folks sleeping on the couches and within the closet.
As they constructed their product, ChatGPT burst onto the scene. Many legacy advertising and marketing automation instruments are including varied AI and chat integrations into their wares, however not all of their options assist these integrations. Advertising groups needed “to have the ability to enrich contacts, [be] capable of automate workflows,” as an example, Tewari mentioned. Conversion has baked AI in, which suggests it could possibly do issues like manage leads and automate customized follow-up emails.
As AI curiosity has soared, so has the corporate’s prospects. Conversion is nearing $10 million ARR over the previous two years, Tewari mentioned, and about 90% of its prospects are midsize companies which have yanked out a legacy app.
In fact, Conversion can be in a crowded subject. Apart from the legacy advertising and marketing automation instruments like HubSpot, Adobe Marketo, or Salesforce Pardot, there are different AI native startups like Jasper, Author AI, Iterable, Copy.ai, and lots of others.
However Tewari additionally has the traditional Silicon Valley confidence of a founder in a crowded market. His recreation plan requires focusing on companies that use the older advertising and marketing instruments. Conversion is just not, as an example, focusing on startups selecting a instrument for the primary time.
The corporate has raised a complete of $30 million between its seed and Sequence A, the CEO says, and is doing nicely sufficient that the founders have every moved into separate flats the place they’ve their very own rooms, and none of their roommates sleep in a closet.
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