Ethosphere, a new Seattle startup building voice AI for retail operations, raised $2.5 million in a pre-seed round led by Point72 Ventures. Other backers include AI2 Incubator, Carya Ventures, Pack VC, Hike Ventures, and J4 Ventures.
Founded last year, Ethosphere uses wearable microphones and audio processing software to analyze in-store conversations with customers. Large language models help digest the data and provide feedback to frontline retail workers.
The goal is to help associates improve their performance while giving managers better visibility into what drives sales, CEO Evan Smith said in an interview with GeekWire.
Smith, who held leadership roles at Starbucks in technology and operations, said that high-performing managers are the biggest driver of retail success.
“At our core, we’re inspired by empowering people to be great in what they do and using AI to give people superpowers,” Smith said.
Employees wear lightweight, watch-sized microphones during their shifts. Ethosphere’s software cleans and transcribes the audio, then uses LLMs trained on the retailer’s own training materials to assess how well employees followed the brand’s selling approach. Associates get feedback on what they did well and where they can improve; managers see data on who’s excelling and who could benefit from targeted coaching.
Ethosphere built its system to capture only the employee’s side of the conversation, not the customer’s. Retailers work with the company to implement appropriate in-store disclosures. In luxury settings, Smith said the company is exploring opt-in use cases where stylists offer to record conversations as a white-glove concierge perk.
Smith noted that some employees enjoy using the system to get feedback in a new way.
“The gamification element of this shows up in a much more powerful way than I would have predicted when we started this,” he said.
The CEO said one of the main reasons why people leave retail jobs is the lack of feedback.
“Feeling seen, feeling heard, and feeling recognized is really a big piece of the puzzle that, in some respects, is missing in retail,” he said.
Ethosphere isn’t naming customers but said it is working with brands in the quick-service restaurant industry, clothing shops, and high-end luxury retailers. The 9-person startup is generating revenue from some customers while working with others on custom pilots.
It’s part of a wave of voice AI startups gaining traction and attention from investors.
“In an increasingly busy landscape flooded with theoretical AI, Ethosphere stood out to us with a practical, powerful application that we believe has the potential to directly impact the sales and customer experience,” Sri Chandrasekar, a Seattle-based managing partner at Point72 Ventures, said in a statement.
Smith, who began his career in education and public affairs, co-founded the company with CTO Ahad Rana, a veteran technologist with experience at AWS, Google, Factual, and AOL. Both held entrepreneur-in-residence positions at Seattle’s AI2 Incubator before launching Ethosphere.
