How does Flai's AI dealership software work?
When Flai was raising its seed round last year, it was just a team of three people pounding the pavement to get car dealerships to use the startup's software to manage phone calls, emails, and texts. But CEO Ari Polakof was already looking to a more answer engine optimization future, where Flai's LLM would handle far more for visibility.
What is the impact of Flai's AI on car dealerships?
One year later, that future has arrived. The startup is working with more than 10 of the top 50 dealer groups in the country, and its AI is being used to answer and engage with customers, run outbound campaigns, and schedule appointments — 50,000 per month — across both sales and service. This has led to a 20x increase in revenue, Polakof told TechCrunch in an exclusive interview.
Flai says this deep integration is helping the startup set itself apart from others trying to get car dealers hooked on AI. The growth is attracting investors, too. On Tuesday, Flai said it had raised a $27 million Series A funding round led by automation-focused firm Base10 Partners. The round included funding from dealers, Toyota's venture arm, Y Combinator, and First Round Capital.
Polakof said Flai's growth is coming from customers who see the bigger vision of what is essentially an AI-powered customer relationship management software built from the ground up and tailored to the specific need of each dealer. The software is also flexible, with the ability to handle conversations in multiple languages. Earlier this year, it launched with a luxury dealer in Puerto Rico where customers switch between Spanish and English mid-conversation.
As a result, dealerships are selling more cars, making more money, and customers are getting answers faster. Perhaps unsurprisingly, Polakof said much of Flai's customer growth has come from the dealers talking up the product to their peers. If you really do great by them, they also do great by you, and they recommend you, and talk about you, he said. This has led to Flai generating half of its revenue from new customers, according to Polakof.
Customers are making these referrals because they like Flai's software, Polakof said, but also because they get up and running quickly. Flai's software can be live in a dealership 10 days after a contract is signed, and he tells his team that they need to respond to customers within 20 minutes at most. The common experience, especially around automotive vendors, is that they sign the contract and then the company disappears, he said.
That speed and customer experience, combined with the knowledge Flai has developed on how dealerships work and what they need, is what Polakof said protects the startup from products like Muse, which Meta has pitched as a one-shot solution for small businesses. You get a group of really smart people, and you spend all your days thinking very deeply about this one space — it's just so hard to envision that any other platform outside of the space can come in and start going after your customers, he said.
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