Reducto Raises $8.4M to Help LLMs Read PDFs and Spreadsheets Like Humans

Our customers choose us for our accuracy and speed.

Reducto, an AI-driven startup that turns unstructured data from PDFs and spreadsheets into formats that large language models (LLMs) can efficiently process, has raised $8.4 million in a seed funding round. The round was led by First Round Capital, with participation from prominent investors including Y Combinator, BoxGroup, SVAngel, and Liquid2. Notable angel investors such as Dropbox founder Arash Ferdowsi, Airtable founder Andrew Ofstad, Zeus founder Kulveer Taggar, WayUp founder JJ Fliegelman, WePay founder Richard Aberman, and PlanGrid founders Ralph Goottee and Tracy Young also joined the round.

Founded in 2023 and part of Y Combinator’s Winter 2024 batch, Reducto’s innovative solution addresses a critical pain point for AI teams across industries: the difficulty LLMs face when reading and extracting information from complex document formats. PDFs, in particular, often contain a mix of text, charts, tables, and images that are difficult for AI models to interpret accurately, leading to potential hallucinations and errors in output. With its advanced vision models, Reducto aims to bridge this gap by making these complex data sources easy for LLMs to read and process—similar to how a human would approach the same task.

“We just finished building what we believe is state of the art for spreadsheet parsing,” said Adit Abraham, CEO of Reducto, in an interview with Business Insider. “Our goal is to be the layer that connects human data with LLMs, enabling them to work with real-world documents at scale.” According to Abraham, Reducto’s models are capable of recognizing intricate visual cues in documents, such as spaces between paragraphs that signal topic changes or tabs that indicate nested hierarchies in lists.

Reducto has already gained traction in the enterprise sector, serving clients from legal tech startups to AI healthcare companies, and even a late-stage startup processing documents for U.S. government agencies. While specific names were not disclosed, Reducto counts among its clients a Fortune 10 tech company building out its AI capabilities.

“Many of the world’s best AI teams have adopted Reducto to handle their most complex documents and spreadsheets,” Abraham said in a recent statement. “Today, our customers process tens of millions of pages with Reducto’s models every month. This funding will help us improve our product to meet their growing needs.”

In a market where many AI-powered tools focus on personal productivity, Reducto stands out by catering specifically to enterprise customers. Its unique approach to document parsing has attracted considerable interest, with investors confident in its ability to reshape how businesses unlock value from their unstructured data. According to the company, more than 85% of business data is unstructured, and accurate extraction from this vast pool of information is critical for LLMs to provide reliable insights.

The funding will be used to enhance Reducto’s technology, allowing the company to better serve its growing customer base. “Our customers choose us for our accuracy and speed,” Abraham noted, adding that the company is particularly grateful to Liz Wessel, one of their key partners, and Diana Hu, Reducto’s first investor.

As the AI landscape continues to evolve, Reducto’s ability to transform raw, unstructured data into useful input for LLMs positions it as a vital tool for companies looking to harness the power of AI. With its fresh infusion of capital, the startup is poised to make even greater strides in the months ahead.

By the end of 2024, Reducto could well be the driving force behind many AI-driven breakthroughs, as businesses unlock the potential of data previously trapped in dense and difficult-to-parse documents. Summing up Reducto’s mission, founder Raunak Chowdhuri stated, “We are on a mission to help LLMs read unstructured documents, like PDFs and spreadsheets, the same way humans do. We’re already processing tens of millions of pages every week for hundreds of companies.”

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Picture of Anshika Mathews
Anshika Mathews
Anshika is the Senior Content Strategist for AIM Research. She holds a keen interest in technology and related policy-making and its impact on society. She can be reached at anshika.mathews@aimresearch.co
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