LimeChat, based in Bengaluru, has introduced an AI-powered chatbot in collaboration with technology giant Microsoft. The startup anticipates reaching an annual recurring revenue (ARR) of $2 million by the end of the current quarter and aims to triple its revenue in the next 12 months. LimeChat is also targeting profitability in the first half of the current year. “All SaaS (software-as-a-service) companies want to be profitable, and I’m very happy to notice that we’re on a path to profitability maybe (in) the first half of this year. That gives a founder like me a lot more leverage to think about more innovative solutions and build large R&D (research and development) teams", Nikhil Gupta, Co-founder of LimeChat, said.

LimeChat collaborates with ecommerce brands, assisting them in sales and conversion through various chat channels like WhatsApp, Instagram, and web chat. The optimism expressed by Gupta is rooted in the partnership with Microsoft, where the tech giant will promote LimeChat's chatbot to its enterprise customers, marking the startup's entry into this segment. Gupta emphasized that the favorable unit economics associated with larger enterprises are instrumental in driving the startup toward profitability.

Elaborating further, he mentioned that LimeChat aims to triple its revenue without expanding its team, avoiding the necessity to triple its workforce to reach the target. LimeChat identifies two primary costs – cloud and salary expenses – both of which the startup asserts to have effectively managed through its partnership with the tech major. The startup will be able to leverage Microsoft’s “very large sales machinery, which is a replicable model across all the 192 countries” where it provides its services. The sales playbooks in these regions are 80% similar, and the rest require tweaking to suit specific needs, according to Sangeeta Bavi, Executive Director, Digital Natives, Microsoft India. 

“The kind of automation that LimeChat can provide it’s about 70-75% automation rate or even more than that, and some of the products are far behind that. In terms of business thinking, the clarity of saying, “Hey, you know while we address the SMB and the mid-market segment, the whole idea is that how do we basically start pivoting and looking at selling to enterprises”. And that is also the sweet spot for Microsoft", said Bavi. 

Through their partnership, LimeChat has constructed its latest platform utilizing Microsoft Azure OpenAI Service. The company asserts that this new platform delivers superior responses to customer queries through its chatbot compared to its previous version or competitors. Currently engaged with 300-400 brands, LimeChat notes that a majority of them have adopted the new features and functionalities. According to Gupta, there are no commercial dimensions to the collaboration with LimeChat, and Microsoft has not made any investments in the startup thus far, as stated by Bavi.