Last week, Newark played host to the VOICE Summit, sponsored by Amazon Alexa and hosted at NJIT. It was attended by 2500 people and explored topics ranging from conversation design to companies’ voice strategy across industries, and yes, you guessed it: investing in voice tech. Our NVP Labs Director, Allison Williams, joined a panel on the mainstage, titled “Voice First Investors” with other investors in the space. We were excited to be part of the event as it highlights an area of investment focus for us, Voice Tech.
By now, you’ve heard a lot of talk about the role of voice as the next frontier of machine interface. Chances are you have heard Mark Zuckerberg, Jeff Bezos, Sundar Pichai and others talk about the trend in interviews, or you know from personal experience as one of the 50 percent of Americans who already use digital voice assistants. Maybe you received a Google Home or Alexa device for your birthday this year, and ask it for the weather every morning, or perhaps you use it at work to manage your meeting schedule. Wherever you fall, you know that voice technology is here and becoming more embedded in our daily routines.
What gets us excited from an investment standpoint is the emergence of a new product/application interface combined with the sheer potential market size. Within the next 5 years, we will see a massive increase in adoption by both consumers and businesses. U.S. retail shopping through voice tech will exceed $40 billion by 2022. ComScore forecasted that 50 percent of all searches will be voice searches by 2020. And the number of voice-first devices in the U.S. is more than 33 million, based on a new study by VoiceLabs.
Why the voice trend continues: distinct catalysts
We believe there are 3 catalysts driving voice technology adoption: 1) Improvements in natural language processing, enabling better comprehension, 2) growing presence of IoT enabled devices as an installed base where voice interaction can be the primary source of engagement and 3) the search for productivity gains across the digital landscape.
As the number of digital device touchpoints explodes, voice is faster than text (taking 1/3rd of the time) and works as an even quicker fix for generations that seek instant gratification. It cuts back on the information overload that is often delivered by search engines, and it feels more natural to ask a question out loud than it does to type it. Voice is a natural extension of our human nature.
Fundamentally, the voice market is propelled by a basic desire to communicate more effectively and therefore its potential customer base is massive. According to TechCrunch, by 2020, there are expected to be 6.1 billion smartphone users globally, and it’s no coincidence that voice is a mobile-enabled and mobile-first technology. Our founding Corporate Limited Partner, Audible, is a leader in spoken audio content and has benefited greatly from the growth in mobile device usage as a significant driver of audio consumption. Audible has paved the way for the current trend of “heads up” interaction with mobile devices. As voice technology is perfected, users will ingest and respond to audio content from their mobile devices as easily as they converse with friends.
Newark Venture Partners Areas of Focus
As we explore the Voice Tech opportunity we have been looking at a number of horizontal voice applications that we can validate across our corporate investor network. Technologies targeting cross-industry integrations capture a significantly larger market opportunity, and there has been a history of recent acquisitions and funding in this category.
We have seen potential applications across our corporate partner network, whether used for customer support at Prudential, IoT enabled device interaction at Panasonic or vertically focused use cases in the world of healthcare at RWJ Barnabas Health and Horizon Blue Cross Blue Shield. We’re also paying attention to what market leaders like Google, Apple, Amazon and Microsoft are doing that may help to support or undermine ecosystems in the voice space.
We’re seeing a robust pipeline of startups building and scaling really interesting products, and are particularly interested in developments around B2B applications. As an example we recently invested in Veritonic, an audio testing platform. Veritonic fills a critical gap in media and technology, allowing marketers and others to test responses to audio and voice interactions. As audio continues to grow, through a variety of voice-technology advances, and busy consumers continue to multitask, the need to effectively reach them through audio will be greater than ever before.
The VOICE Summit provided a forum to discuss these complexities, along with emerging trends, technological advancements and compelling new applications, making clear that voice is more than a market, it is the new way of life. Major leaps in technology have a way of defining a generation, from the age of fireside radio chats, to evolving audio/visual technologies, to cell phones and touchscreens. Children being born today in the U.S. will grow up in a world where speaking to devices is as natural as breathing, and investors with the foresight to invest now, will reap rewarding returns. Take our advice, put your money where your voice is, and, if you don’t believe us, just ask Alexa.