Beyond ‘no subscription’, NeoSapien sees a paid future for advanced AI features

Bengaluru-based artificial intelligence (AI) wearable startup NeoSapien plans to introduce paid AI features for its next-generation wearables to build new revenue streams beyond hardware sales. Currently, it sells the Neo 1 device without subscription charges.

The company plans to launch Neo 2 in mid-to-late 2027, with some advanced features requiring additional payments because of higher computing costs, founder and chief executive (CEO) Dhananjay Yadav told ET AI.

However, Yadav clarified that the existing Neo 1 customers can access their current services without additional charges.


“Neo 1 users will not get a downgraded version. However, certain new features with higher computing costs will require payment,” Yadav said, when asked whether existing customers would receive a downgraded model.

He did not specify which features would be paid or whether users would be charged through subscriptions, usage-based fees or one-time payments.

Founded in 2024 by Dhananjay and Aryan Yadav, NeoSapien makes AI wearables that capture conversations, generate notes and allow users to retrieve information from discussions.

The move towards paid features marks a shift in the company’s consumer strategy, which has till now focused on attracting users with a one-time device purchase and no recurring subscription charges.

Building a memory layer

Initially, Yadav said NeoSapien wanted consumers to experience its technology without worrying about payments, drawing comparisons with the early consumer strategies of ChatGPT and Claude.

“We started the company with the decision that ambient conversations should be free. We wanted to build that ambient layer. Think of it as a Google Drive for your mind. Once it holds so much of your context, it becomes difficult to switch to another device, even if one comes along in future,” he said.

However, the strategy also presents a challenge.

While NeoSapien makes money when it sells a device, it continues to incur costs for transcribing, processing and storing conversations. Asked whether heavy users remained profitable under this model, Yadav said the company improved its underlying technology and reduced its operating costs.

“We have made several technological breakthroughs. The fine-tuning we have done across our pipeline has helped reduce our technology costs significantly,” he added.

As per the company, it has sold more than 20,000 devices and processed over 37 million minutes of conversations. At its peak, the platform has processed more than 500,000 minutes in a single day.

Yadav said some of the earliest demand came from small businesses instead of the technology enthusiasts the company initially expected to attract.

“When we launched, I thought early technology adopters would be our first target group. Instead, SMEs and MSMEs became our early adopters and created a fan base around the product. They began referring friends and buying 20-30 devices in bulk,” Yadav said.

These businesses use the device to record and retrieve information from conversations with vendors, customers and business partners.

Enterprise deals: another revenue stream

The demand from small businesses has also pushed NeoSapien towards larger enterprise customers, where it follows a different commercial model. Unlike its consumer offering, the company charges enterprises for usage and annual commitments.

Yadav said NeoSapien secured a deal with a large Indian fast-moving consumer goods (FMCG) company, although he did not identify the customer or disclose the contract value.

The company is targeting field-sales teams that regularly interact with retailers, distributors and other business partners.

In such cases, the devices can capture conversations during sales visits and feed relevant information into customer relationship management (CRM) systems. The software can use them to help sales people prepare for upcoming meetings.

The firm is exploring a third revenue stream by licensing its software to other hardware manufacturers.

“We are also speaking to large consumer-technology and hardware companies that want to license our operating-system layer,” Yadav said. He said work with one potential partner was at an early stage.

“Think of us like Android. We will continue to build best-in-class devices optimised for our OS, while the OS also powers other devices,” he said.

Funding on the anvil

As NeoSapien expands its consumer, enterprise and software businesses, the company is preparing to explore another funding round in early 2027.

Yadav said the startup was not under pressure to raise capital because its cash burn remained low and capital from earlier funding rounds was available.

“We don’t need to essentially raise the next round. However, we have started receiving a lot of inbound interest,” he said.

NeoSapien raised $2 million (Rs 18 crore) in December 2025 in a seed funding round led by Merak Ventures. The round included investments from Pixxel founder Awais Ahmed, Anupam Mittal, boAt cofounder Sameer Mehta, Namita Thapar and Aprameya Radhakrishna, among others.

Previously, it raised $92,400 from Thapar and other investors.

Yadav said any fresh capital would support research and development, hiring, consumer awareness and expansion of the enterprise business.

“The next round will be about creating more consumer awareness of Neo, building B2B through larger enterprise partnerships and continuing to invest in R&D. Ideally, every sales team should have a Neo. We will always be an R&D-focused company,” Yadav said.