Raffle.ai, the Danish provider of an AI-based search tool for businesses, is already being approached by potential investors ahead of a Series A funding round in about 18 months, CEO and co-founder Suzanne Lauritzen told Mergermarket.

The Series A round is not planned in detail yet but is expected to be around DKK 50m (EUR 6.5m) for a negotiable stake, she said. There are also venture capital investors tracking the company with an aim to invest in a Series B round, she said. However, a Series B round is not planned being at present and Raffle.ai is focusing on the Series A round, she said.

Raffle.ai raised EUR 1.3m in a seed round in late January, as reported. To date, Raffle.ai has raised EUR 2m, the CEO said. An internal valuation has been done, the CEO said though declining to give further details.

The capital raised in the seed round will be spent on growing the company and hire more staff such as sales people and developers, she said.

The number of staff is expected to rise to 20 by the end of this year from the current 12, she added.

The Danish home-market will serve as a test market for the next 12-18 months after which Raffle.ai will developed a scalable product, the CEO said. Raffle.ai has three Danish customers, Visma, Accenture and Coop and expects to have a further 14 next year, she said.

In about 18 months, Raffle.ai will be ready for a global launch, starting with the US, the UK and the rest of Europe, for which the Series A funds will be used, she said.

Raffle.ai was founded in 2018 by Suzanne Lauritzen and Ole Winther, a professor at the Danish Technical University (DTU), specialised in AI, the CEO said. The two founders still own a majority stake, while the rest is held by two venture funds and five private investors as well as management, she said. Existing investors are expected to participate in the Series A financing round, she added.

An exit through a sale to a strategic is the most likely scenario in future, Lauritzen said. However, there is no time horizon in place at present, she added.

Raffle.ai has not mandated financial advisors but this may be relevant at a later stage, the CEO said. It uses Kromann Reumert as legal advisors, while KPMG is the accountant, she said, adding that both firms offer advisory services for start-ups.

There are no direct competitors for Raffle.ai, but US-based Algolia and Finland-based M-Files are comparables, although both use different technology from Raffle.ai, the CEO said. Algolia raised USD 110m in a Series C round in October 2019, as reported. M-Files raised USD 36m in a Series B round in 2016, as reported.

There are no financial figures available for Raffle.ai as it is still to report its first earnings report.

by Karin Jensen
Feburary 28, 2020
Mergermarket, an  Acuris company