Cisco acquires conversational AI startup MindMeld for $125 million

This morning Cisco announced that it is buying MindMeld for $125 million. Founded in 2011, MindMeld helps businesses to build conversational interfaces with cloud-based services.

MindMeld, originally called Expect Labs, was launched on the stage of TechCrunch Disrupt SF 2012. At that time the startup wanted to build an iPad app that could listen in on your conversations and provide relevant contextual information. Since then the company has expanded its offerings to include a suite of APIs for parsing, reasoning about and generating language.

A sampling of API offerings from MindMeld

MindMeld had previously raised $15.4 million in venture capital financing from IDG Ventures, GV, Greylock Partners, Bessemer Venture Partners and Intel Capital, among others. Conversational AI continues to be a hot space for M&A activity. Samsung paid about $215 million for Viv last year with the purpose of repackaging it into Bixby, its own personal assistant.

“MindMeld lets someone deploy an AI-powered conversational interface from start to finish,” Alexander Rosen, a partner at IDG Ventures told me in an interview. “Not many people outside of Amazon and Google have that.”

Cisco has been on an acquisition spree as of late. The company purchased AppDynamics earlier this year for an astounding $3.7 billion. The company has been working to define itself as a software company.

“With MindMeld, we will enhance our Collaboration suite, adding new conversational interfaces to our collaboration products starting with Cisco Spark,” Cisco’s head of corporate development, Rob Salvagno, said in a blog post.

If Cisco is serious about software, AI is an indispensable core competency that forms the foundation for any and all future products. Cisco says that the MindMeld team will form the company’s Cognitive Collaboration team, a move that immediately evokes the aesthetic of IBM Watson’s cognitive computing group.