Every company today faces mounting pressure to deploy AI, but most solutions fall short on reliability and cannot handle complex, critical workflows. Applied Labs, founded by early Scale AI leaders, announced $4.2 million funding to transform how businesses deploy AI agents for complex support and operations tasks.
The seed round was led by Abstract, with participation from Point72 Ventures, Outlander, and Tetra. A few notable angel investors include Vercel CEO Guillermo Rauch, Modal CTO Akshat Bubna, and ex-Twitter exec Ali Rowghani. This latest round brings the total raised by Applied Labs to $5.2 million.
Founded in January 2024 by Michael Woo and Soham Waychal, Applied Labs emerged from their firsthand experience with AI applications at Scale AI, where they recognized how much time was spent on critical yet repetitive support interactions and ops workflows. Woo – who joined Scale AI as employee #20 and led a team of 30 focused on ops scalability – saw the opportunity to build AI agents that could handle complex workflows with unprecedented reliability. Waychal, who previously led engineering at a16z-backed Canal and holds 5 AI patents, brings deep technical expertise to the challenge.
“For companies, there’s an explosion of C-Suite and boardroom interest into the question, what is our AI strategy?” said Michael Woo, CEO of Applied Labs. “The bottleneck isn’t the model anymore – LLM quality, speed and cost have reached an inflection point where almost every business can save time, cost and improve the quality of their support and ops. The challenge is in the data, tools and platform for teams to easily setup and perfect AI agents on their business-critical workflows. We’re obsessed with making our AI agents the best where if you’re not using them, you’re falling behind.”
The company focuses on support and operations teams. Their current solution is an end to end AI customer support agent fine-tuned to the businesses’ knowledge base and empowered with AI actions which typically involve first and third party integrations. Digital employees in other domains like operations are incoming. But Woo emphasizes the importance of a human in the loop to ensure quality on all domains. “AI allows you to scale up your best human judgement on an infinite volume of tasks but human judgment is still necessary to get the best quality results and handle edge cases.“ Woo said.
Uniquely, the Applied Labs team is using their expertise at Scale AI to build high quality, reliable and easy to use AI agents. The solution uniquely combines three critical components to get what they believe are the best results: omnichannel interactions spanning chat, email and phone to handle 100% of volume; sophisticated AI agent orchestration for handling Q&A and AI workflows; and comprehensive evaluation tools for testing, auditing and monitoring AI outputs. This approach includes built-in human-in-the-loop escalations, recognizing that finding the right balance between AI efficiency and human touch for complex, emotional interactions remains crucial.
The stakes are high – a single misstep in handling customer inquiries or operational tasks can erode trust and escalate problems. “At Scale when we first did AI labeling or if you think about self-driving cars or even these AI sales agents, if you scale up a poorly thought out AI response or workflow on high volume, it’s deeply damaging.” Woo said. Applied Labs addresses this by building guardrails and monitoring systems to rigorously test the AI with human-in-the-loop auditing before any new capabilities are broadly deployed.
Applied Labs plans to double its headcount in the coming months to meet growing customer interest. The funding will accelerate hiring of engineers to advance the company’s ambitious product roadmap.
“Few founders truly grasp the operational intricacies of deploying AI in mission-critical workflows. Michael’s experience managing Scale AI’s core data product brings a rare fusion of technical acumen and practical experience — exactly what’s needed to make AI both dependable and transformative. Applied Labs’ commitment to pairing trust with capability, underpinned by their human-in-the-loop approach, is precisely what enterprises need to confidently embrace AI-powered customer support. We couldn’t be more excited to partner with Michael and his team on this journey” commented Ramtin Naimi, Founder & General Partner, Abstract.
“Technical decision makers will save their team countless hours everyday on the most frustrating and repetitive workflows,” added Woo. “AI agents, when crafted correctly by the right person, allow you to scale up your best human thinking on repetitive support interactions or ops workflows helping save significant time without sacrificing quality.”
Looking ahead, while the AI industry races to replace human workflows, Applied Labs is pioneering a more nuanced vision: high quality AI agents that combine machine efficiency with human judgment. By focusing on quality, reliability and empowering non-technical teams to resolve the most complex, painful issues with AI, the company is building toward a future where almost every company can confidently deploy AI across their most complex operations—transforming not just how work gets done, but redefining what’s possible when artificial and human intelligence work in harmony.
