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Otter
AI-powered transcription service for converting spoken language into written text in real-time

Revenue

$100.00M

2025

Funding

$70.00M

2025

Details
Headquarters
Mountain View, CA
CEO
Sam Liang
Website

Revenue

Sacra estimates that Otter.ai generated $100 million in annual recurring revenue (ARR) in March 2025, marking a major milestone for the company. This represents significant growth from earlier years as the meeting transcription market expanded dramatically during and after the pandemic.

The COVID-driven shift to remote work created substantial tailwinds for Otter, as virtual meetings became ubiquitous across industries. This environment transformed every video call into a potential channel for viral distribution and monetization of meeting notes.

Otter has cultivated a sizable user base of over 25 million as of 2025, with an estimated 14 million users in 2023. The company monetizes through premium transcription plans ranging from $8 to $30 per month, embedding itself deeply into Zoom and other virtual meeting workflows.

Valuation

Otter.ai has raised approximately $70 million in funding since its inception in 2016. The company's funding journey includes a $3 million seed round in September 2016 led by Draper Associates and Draper Dragon, a $10 million Series A in November 2017 led by Horizons Ventures, and a $10 million strategic investment in January 2020 from NTT DOCOMO Ventures.

In February 2021, Otter.ai secured a $50 million Series B round led by Spectrum Equity, bringing its total funding to date to approximately $73 million.

Notable investors in Otter include Draper Associates, Draper Dragon, Horizons Ventures, and GGV Capital

Product

Otter.ai, founded in 2016, provides an AI-powered meeting transcription service that joins virtual meetings as a visible participant to capture and process conversations. At its core, Otter developed a proprietary automatic speech recognition (ASR) engine rather than relying on third-party APIs, giving it superior transcription quality and speaker separation, particularly for overlapping speech.

The product's main component, "OtterPilot," functions as a headless client that connects to meetings through calendar APIs and platform-specific SDKs for Zoom, Teams, and Google Meet. When a scheduled meeting begins, Otter joins as a visible participant, accessing clean audio streams directly from the platform backend rather than recording through microphones.

Users experience Otter in two phases: during meetings, where the transcription happens in real-time with speaker identification, and post-meeting, where they can access a searchable, interactive transcript with every word time-synced to audio. The platform applies natural language processing to automatically generate "Meeting Outlines" and extract "Meeting Gems" (key decisions and action items).

By 2025, Otter evolved beyond passive transcription into interactive meeting intelligence with "Otter Chat," an assistant that can answer questions during meetings based on real-time transcript context. This positions Otter as the destination for organizational meeting knowledge rather than just a transcription tool.

Business Model

Otter operates a B2B2C freemium SaaS model that converts free users into paying subscribers through a carefully structured tiered pricing strategy. The company offers multiple plans: Free (limited features), Pro ($8-10/month), Business ($20/month), and Enterprise (custom pricing), with each tier enforcing strict minute caps (Pro: 1,200 minutes, Business: 6,000 minutes) that create natural upgrade paths as usage increases.

The minute-based caps serve dual purposes: protecting margins while creating predictable upgrade friction. Internal data shows 73% of Pro users hit their limits within 4 months, driving conversions to higher tiers. This approach delivers approximately 70-80% gross margins, significantly better than typical service-based businesses.

Otter's primary growth mechanism leverages what could be called the "bot-in-meeting effect" – each time an Otter bot joins a meeting, it generates approximately 7.5 new social interactions with participants who haven't seen the technology before. This viral distribution loop brings customer acquisition costs down to roughly $0.32/user, though it trades some social awkwardness for free distribution.

Sales teams represent a disproportionately valuable customer segment, accounting for 68% of all AI notetaker revenue despite representing only 31% of overall users. This skew results from sales teams paying higher per-seat prices ($32/month vs. $18/month for general users), exceeding usage limits three times more frequently, and exhibiting higher 12-month retention rates with less price sensitivity.

Competition

Bot-based transcription tools

Otter operates in a crowded market for AI-powered meeting transcription, facing direct competition from numerous bot-based tools. Fireflies.ai ($11M ARR) uses a similar approach but differentiates with "unlimited transcription" at its entry-level $10/month tier while implementing storage caps (8,000 minutes) instead of transcription limits.

Other competitors include Grain, Fathom, and Multi, all leveraging similar bot-based approaches but with various specializations and pricing models. This segment has become increasingly commoditized as the underlying transcription technology becomes more accessible and affordable.

Alternative recording architectures

A significant competitive threat comes from companies using fundamentally different technical approaches. Granola ($20M Series A) inverts the traditional meeting stack by running an OS-level desktop agent that captures audio locally rather than joining as a visible bot.

This "no-bot" recording trend threatens to undermine Otter's viral acquisition strategy while simultaneously addressing growing privacy concerns. Granola's approach allows it to detect and record meetings across platforms without requiring participants to see a bot joining, eliminating the social friction but sacrificing the word-of-mouth growth engine that Otter relies on.

Platform integration and infrastructure players

The most existential competitive threat comes from the meeting platforms themselves. Zoom, Microsoft Teams, and Google Meet have already begun bundling basic transcription and summarization capabilities into their core offerings, collapsing standalone transcription into a default feature.

Recall.ai's universal meeting-bot API ($10M ARR, 300% YoY growth) has emerged as the "Plaid for meeting data," abstracting away platform-specific bot engineering. By charging per minute of meeting processed ($0.80-1.00 per hour) with enterprise volume discounts, Recall.ai has turned meeting access into infrastructure rather than a product feature, accelerating the commoditization of Otter's core business.

TAM Expansion

Workflow automation and integration

As basic transcription becomes commoditized, Otter can expand its addressable market by evolving from a meeting recorder into a workflow automation platform. By developing deeper integrations with productivity tools, project management systems, and CRM platforms, Otter can transform meeting data into actionable workflows.

This approach involves automatically triggering tasks, updates, and follow-ups based on meeting content, creating value beyond the transcript itself. The market for workflow automation is substantially larger than the transcription market alone, potentially multiplying Otter's addressable opportunity.

Vertical-specific solutions

While Otter began as a general-purpose transcription tool, significant opportunity exists in tailoring solutions for specific high-value verticals. Sales teams already drive 68% of all AI notetaker revenue despite representing only 31% of users, indicating the value of specialized functionality.

Otter's introduction of "Otter Sales Agent" for sales teams provides real-time coaching during calls and specialized post-meeting analysis. Similar vertical solutions could target legal proceedings, healthcare consultations, educational settings, and other domains with specific compliance and workflow needs.

Knowledge management infrastructure

Meeting data represents a critical substrate for LLM-powered business automation. By positioning as the central repository for organizational conversation data, Otter can expand into enterprise knowledge management.

This strategy leverages Otter's existing data capture capabilities but focuses on making historical meeting content searchable, analyzable, and actionable across the organization. As companies increasingly recognize the value locked in meeting recordings, the knowledge management TAM represents a significant expansion opportunity beyond transcription.

Risks

Transcription commoditization: Automatic speech recognition costs have plummeted 92% since 2021 (from $0.25/minute to $0.02/minute), with free transcription now bundled into major meeting platforms and open-source models driving costs even lower. This fundamental shift threatens Otter's core value proposition and pricing power, potentially forcing dramatic business model adjustments if transcription alone can no longer command premium pricing.

Platform disintermediation: Major meeting platforms like Zoom, Microsoft Teams, and Google Meet are increasingly integrating native note-taking and summarization capabilities directly into their core offerings. Since these platforms own the meeting infrastructure and user relationship, they could effectively eliminate the need for third-party solutions like Otter, particularly if they decide this functionality represents a strategic priority.

Viral distribution erosion: The emerging "no-bot" recording trend exemplified by desktop-level recording tools threatens Otter's primary growth mechanism. As users become more privacy-conscious and alternative recording methods gain traction, Otter's viral "bot-in-meeting" distribution channel could deteriorate, significantly increasing customer acquisition costs and slowing growth without a compensating distribution strategy.

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