In a crowded market of AI sales rep startups, Actively AI is taking a distinct approach by leveraging "reasoning" technology to help companies identify high-value prospects. The New York-based startup has just raised $17.5 million in Series A funding from Bain Capital Ventures, following a previously unannounced $5 million seed round from First Round Capital, bringing its total funding to $22.5 million.

The AI sales rep market has been gaining traction, with billboards in San Francisco promoting the idea of "stopping hiring humans" and "hiring AI SDRs." However, some venture capitalists are skeptical about the effectiveness of these startups. Anshul Gupta, co-founder of Actively AI, acknowledges that early versions of AI sales tools have failed to live up to their hype, focusing too much on "pure volume" rather than quality.

Actively AI's approach differs from traditional AI sales reps by building custom "reasoning" models for companies to sift through their data and identify the highest-value prospects. This method mirrors the work of top human sales reps, and the startup claims it has helped clients like fintech Ramp generate tens of millions of dollars in extra revenue.

The startup's "GTM Superintelligence" approach uses a combination of in-house models and popular reasoning models from OpenAI and Anthropic to power its technology. Both founders, Mihir Garimella and Anshul Gupta, have a background in AI, with Garimella focusing on active learning, a field closely related to reasoning, during his studies at Stanford.

The fundraise is the latest evidence of the growing interest in reasoning models, which have been gaining traction since the rise of DeepSeek last year. Another YC-backed startup, Taxo, recently raised $5 million for its "reasoning engine" designed to reduce paperwork in healthcare. While it's still early to determine the long-term success of Actively's approach, some investors are clearly buying into the pitch.

The use of reasoning technology has the potential to revolutionize the AI sales rep market by providing a more targeted and effective approach. As the market continues to evolve, it will be interesting to see if Actively AI's approach becomes the new standard or if other startups will emerge with innovative solutions.

For now, Actively AI's fundraise is a significant milestone in the development of reasoning-powered AI sales tools. With its unique approach and impressive results, the startup is poised to make a significant impact in the industry.