Yandex Invests in San Francisco Chat Bot Startup's Latest Round

  • Y Combinator, 500 Startups and Knight Foundation also invested
  • Chat bots in messengers set to replace mobile apps, search

Russia’s Yandex NV has invested in Chatfuel, a U.S. startup that helps companies create so-called chat bots, programs that can hold discussions with users of messaging services.  

Yandex is the lead investor San Francisco-based Chatfuel’s new funding round, in which Y Combinator, 500 Startups and Knight Foundation also took part, the Moscow-based search engine said in a statement, without specifying the amount it invested. Google failed to agree to buy Chatfuel, then known as 200 Labs, last year, according to The Wall Street Journal.

Typically a chat bot refers to a piece of software or an application that automates text replies to messages or queries from a user in lieu of a human being. They may use a form of artificial intelligence to determine the context of a chat and provide lifelike replies or answers in real time. Quartz, a digital business news outlet, recently released an app that chats to users, in something resembling an ongoing conversation about the news.

Chatfuel counts Forbes and Techcrunch among clients and was used to create bots for Telegram messenger, a service that offers encrypted end-to-end messaging with self-destruct timers. Telegram has surpassed 100 million users, the company’s co-founder Pavel Durov told the Mobile World Congress in Barcelona last month.

"Bots are the new apps," Chatfuel founder Dmitry Dumik said in a phone interview. "They are simple, efficient and they live where the users are -- inside the messaging services.”

Yandex offers search, maps and other Internet services similar to Google products. To win users, Yandex has had to invest heavily in promoting its apps, while chat bots may offer cheaper and more efficient access to users, the company said in a statement.