How 2 UC Berkeley dropouts raised $28 million for their AI marketing automation startup

Conversion, an innovative startup specializing in AI-driven marketing automation, has successfully secured $28 million in a Series A funding round led by Abstract, with contributions from True Ventures and HOF Capital. The company was established five years ago by two ambitious entrepreneurs who dropped out of UC Berkeley, and their journey resembles a plot twist from a tech-centric comedy series. The story of co-founder and CEO Neil Tewari began in high school, where his fascination with entrepreneurship led to a memorable incident involving a TechCrunch Disrupt livestream that got him in trouble with school authorities. In a twist of fate, the friend he called for a ride home would later become one of the first investors in his startup. Tewari teamed up with his college roommate, James Jiao, who now serves as the CTO of Conversion. Together, they experimented with various products before discovering a gap in the market while utilizing HubSpot for their own marketing tasks. They realized that existing tools lacked essential automation features, prompting them to develop their own solution. After conducting extensive customer interviews with marketing professionals from mid-sized companies, the duo received an overwhelmingly positive response, validating their concept. With the help of connections from Tewari's family friend, they raised an initial $2 million in seed funding. At just 19 years old, the pair decided to leave college and fully commit to their startup. In the early days, the founders lived modestly in a cramped two-bedroom apartment with several roommates, a situation that reflected their frugal approach to managing their funds. As they developed their product, the rise of AI technologies, including ChatGPT, transformed the landscape of marketing automation tools. Conversion has integrated AI capabilities to enhance functionalities like lead organization and personalized email automation. The company is on track to achieve nearly $10 million in annual recurring revenue (ARR) and has attracted a customer base largely composed of mid-sized businesses transitioning from outdated marketing solutions. Despite facing competition from established players like HubSpot and Adobe Marketo, as well as newer AI-focused startups, Tewari remains optimistic. The company's strategy is to target businesses that are looking to upgrade from legacy systems rather than new startups just beginning their marketing journeys. With a total of $30 million raised across both seed and Series A rounds, the founders have now moved into their own apartments, leaving behind the crowded living situation of their early entrepreneurial days.