Riekki bets on software with fifth startup despite AI threat

Tuomo Riekki has founded his fifth software company even as artificial intelligence raises fears that it could upend the industry, Yle reports. He and co-founder Santtu Koivumäki have raised more than $10 million for their company, Zero Technologies.

Software companies’ market values have fallen sharply over the past year as investors consider how AI could change the business. One concern is that companies will use AI to build their own applications, weakening the position and profit margins of established software providers.

New AI models have also raised concerns about reverse-engineering software: working out how an existing product was built. Free versions of some paid Adobe applications, including the image-editing program Photoshop, have already been coded with AI, according to the report.

The trend has been dubbed “saaspocalypse”. SaaS stands for software as a service and refers to software sold to customers as a service, including many business applications run on cloud servers.

Riekki says it is possible that companies will build all their own software, but questions whether that would be a sensible use of their time. He recalled a US sales director telling him that he wanted sales staff talking to customers and closing deals, not spending their days coding applications.

Software also requires ongoing maintenance and development, Riekki said, while customer support is a significant part of software companies’ work. He added that AI agents are taking on more tasks, but does not believe the human role will disappear.

Riekki and Koivumäki founded Zero Technologies in summer 2024. The company is developing AI-agent-based sales management tools intended to bring customer relationship management systems into the AI era. Its agents can look for prospective customers, arrange meetings, draft emails and track sales. Zero has around 15 employees.

Riekki, one of the founders of advertising technology company Smartly, said he had repeatedly heard of customer companies developing applications similar to Smartly’s in short-term projects. In most cases, he said, those companies returned to Smartly after priorities changed and the team responsible for their own application was no longer in place.

In 2011, investor Marc Andreessen published an essay predicting that software companies would take over much of business. Fifteen years later, software has reshaped traditional industries, but its position is now being challenged by AI.