Raising $4.7 million in a week: What one founder learned after moving his AI startup from Germany to San Francisco

Business Insider

2 days ago

Raising money in Germany for his AI startup? Nearly impossible. Raising several million in a week in Silicon Valley? Easy.
That's according to Kevin Wu, cofounder and CEO of Leaping AI, which builds voice AI agents for call centers, customer service, and other use cases. He founded the company in Germany in 2023 with Arkadiy Telegin, cofounder and CTO of Leaping AI. The company completed a round of funding earlier this year after participating in Y Combinator.
Leaping AI raised $4.7 million in seed funding led by Nexus Venture Partners. Other investors included Y Combinator cofounder Paul Graham and Shopify COO Kaz Nejatian, as well as Ritual Capital, Pioneer Fund, Orange Collective, and the founders of the voice AI platform Cartesia.
Wu, who is currently based in San Francisco, left his job as a consultant at Boston Consulting Group in Berlin to found the company. He said he was partly inspired by an experience he had years earlier as an intern at Amazon, when he was required to spend a day answering phones and talking to customers at a call center.
"It was such an unrewarding job," he said, explaining why he thought it was ripe for disruption.
Leaping AI's customers span industries, including travel, home services, health insurance, and real estate, and its voice agents currently handle 10,000 calls per day, the company said. For one client, a large travel company, Leaping AI said 50% of repetitive, booking-related calls can be handled without any help from a human. Their AI agents also have achieved customer satisfaction rates of over 90%, the company said.
Leaping AI plans to use the seed funding to expand its product and go-to-market teams, enhance its agent capabilities, and scale to meet demand.
Raising money in Germany vs. Silicon Valley
Initially, the Leaping AI founders tried to raise money in Germany, where Wu grew up and attended school, but struggled.
"It's so hard to found a company in Germany because there's no very early stage seed venture capital for technical founders with unproven businesses," he said.
Then, at the end of 2024, Leaping AI was accepted to Y Combinator after being rejected twice and moved to San Francisco.
"Our revenue doubled within essentially the first two months of being here. So we got more revenue in two months than one year in Germany," he said.
Leaping AI said it recently surpassed $1 million in annual recurring revenue.
When it came time to fundraise in Silicon Valley after being part of Y Combinator, Wu said he took 14 meetings a day in 30-minute blocks, back-to-back, for five days straight. By the end of the first week, he said they'd raised $4.7 million and had even more in offers. He said he canceled the second week of meetings they had planned.
"Here, pretty much everybody said 'yes,'" Wu said.
Wu said coming out of Y Combinator and having the backing of Graham made all the difference, adding it immediately expanded their network and made the startup attractive to investors.
" Paul Graham is the Kobe Bryant of startups," he said. "If Paul Graham invests, usually people see that as a very good sign."
Y Combinator has been investing heavily in AI. The startup accelerator's recent cohorts have been dominated by AI startups run by young founders. Y Combinator invests $500,000 in every company it accepts, and its alumni include Airbnb, Coinbase, and DoorDash.
Leaping AI also benefited from having already existed for a year, Wu said, adding that they had more traction than some of the other companies in their Y Combinator cohort that were run by recent college graduates.
He said that for computer science graduates in Germany like himself, making it to Silicon Valley is the dream, and he would encourage other founders to make it happen. If you can't get into Y Combinator, he said, founders can also make their own luck.
"You could literally just fly over here for a month, get to know investors, try to get funding with the promise of you're moving to SF. And once you have investor money, it's a lot easier," he said.
"I think YC is a good way to come to the US," he said. "But it's not the only way."
Wu said now that Leaping AI is based in the States, it's actually having an easier time selling its product back home in Germany.
"You're seen as having German roots and speaking their language, but you're a Silicon Valley company," he said, adding, "you're seen as setting innovation."