SoundHound AI Secures $100 Million in Strategic Financing From Atlas Credit Partners

SoundHound AI, a global leader in voice artificial intelligence, announced that it closed a new $125 million loan facility, with $100 million fully-funded at closing, from Atlas Credit Partners.

This strategic transaction completes the Company’s plans announced at the beginning of this year to refinance its current debt and further solidify its balance sheet. This new facility will enable SoundHound AI to replace its existing $30 million debt with a more favorable structure that reduces the company’s cash outflows and extends the maturity date to 2027. Additionally, the funds provide substantial incremental capital to drive further innovation and support the Company’s growth plans.

With the significantly strengthened balance sheet, and SoundHound AI’s track record of groundbreaking innovation, the Company believes it will be able to accelerate its pace of innovation and market expansion. Recent advances in artificial intelligence, including Generative AI and Large Language Models, have catalyzed a wave of breakthroughs that are transforming how humans can converse more naturally and seamlessly with technology. SoundHound’s recent groundbreaking launches of Dynamic Interaction and SoundHound Chat AI showcase the latest chapters in its long track record of technological leadership. The Company has strengthened its unique position through its ability to efficiently combine market advances with its best-in-class voice AI capabilities.

SoundHound AI is poised to significantly grow its subscription business with its innovative customer service offering, which includes its suite of AI-based customer service products supporting call answering and food ordering for restaurants ranging from SMBs to large enterprises, and to drive continued growth in its licensing business, which includes smart devices, TV, and automotive verticals, while delivering against its $332 million bookings backlog as of December 31, 2022.

“The clear intersection between demand for sophisticated Conversational AI and adoption of SoundHound’s category-leading technology stack with 17+ years of maturity has created a unique opportunity,” said Keyvan Mohajer, CEO and Co-Founder of SoundHound. “Today, this potential has been acknowledged and underscored with a significant financial commitment from Atlas Credit Partners. Having this additional capital available will play a key role in setting SoundHound up for continued, long term success.”

This new minimally-dilutive financing gives SoundHound AI the flexibility to deliver on its short-term objectives and long-term vision through this four-year loan. By adding significant capital to an already robust balance sheet, the Company is positioned with ample liquidity to effectively navigate potential market uncertainties while fueling growth.

After closing costs, other expenses and repayment of existing debt, the Company is expected to have a cash balance of over $100 million. The Credit Agreement also allows SoundHound AI to potentially tap into additional capital of up to $25 million.

“Today’s announcement with SoundHound AI demonstrates our commitment to empowering technology leaders in their respective categories. After meeting Keyvan and the SoundHound team, the sophistication of their voice AI, robust data, and technology stack made our decision to partner natural,” said Drew Mallozzi, Chief Investment Officer and Managing Partner at Atlas Credit Partners. “We believe our investment will help SoundHound AI to accelerate the pace at which they are redefining voice AI and enable them to further extend their global lead.”

Union Square Advisors LLC and Cantor Fitzgerald & Co acted as financial advisors to SoundHound AI in connection with this credit facility.

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About SoundHound AI

SoundHound AI (Nasdaq: SOUN), a leading innovator of conversational intelligence, offers an independent voice AI platform that enables businesses across industries to deliver best-in-class conversational experiences to their customers. Built on proprietary Speech-to-Meaning® and Deep Meaning Understanding® technologies, SoundHound’s advanced voice AI platform provides exceptional speed and accuracy and enables humans to interact with products and services like they interact with each other—by speaking naturally. SoundHound is trusted by companies around the globe, including Hyundai, Mercedes-Benz, Pandora, Qualcomm, Snap, Square, Toast, LG, VIZIO, KIA, and Stellantis.


About Atlas Credit Partners

Atlas Credit Partners is a Houston, Texas based asset management firm specializing in credit investing and partnering directly with middle market growth companies; providing minimally-dilutive capital solutions to management teams to facilitate transition, accelerate growth and create long-term value for all stakeholders. Atlas committed over $750 million in 2022 to businesses in transition and leverages more than 70 years of combined business experience at top-tier institutions to help its portfolio companies grow through introductions, enabling management teams to connect with other partners within Atlas’ proprietary network while offering a multi-cycle runway for companies to enact their business plans.

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