Startup Spotlight #28: Turning Corporate Training Into a Moneymaker

Today's featured startup is turbocharging corporate training with clever use of AI.

Dec 27, 2024

Tenor has developed a platform where corporate employees can practice leadership and communication skills through role-playing conversations with AI “characters”.

The platform offers a range of pre-designed “role-playing scenarios” of varying complexity, covering situations like giving feedback, discussing employee goals, explaining a denied raise, delivering termination notices, conducting interviews, resolving conflicts, and more. Users can not only select a conversation topic but also customize the persona of the AI interlocutor to simulate different reaction types.

Companies can also create bespoke conversation scenarios and AI character traits tailored to their unique needs.

Beyond providing scenarios, the platform offers real-time feedback, identifies mistakes, and gives guidance during conversations. It also generates personalized development plans for improving leadership communication skills based on the user’s performance.

While exact pricing isn’t listed, Tenor offers three tiers:

• Basic tier: Designed for individuals, it includes conversation practice with hints.

• Professional tier: Suited for teams of 10+ members, this tier introduces personalized development plans and a dashboard for tracking team skills.

• Enterprise tier: Features corporate platform authentication and advanced analytics for tracking leadership skills across the organization.

Tenor, founded about a year ago, recently raised its first funding round of $5.4 million.

What’s the Gist?

“Seriously, teaching abstract leadership skills and raising millions for it?” might be your first thought when you hear about Tenor.

But here’s the thing: according to Gartner, leadership and management training has been the top HR priority for three years running — and for good reason. Strong leaders drive strong companies, and investing in leadership development is seen as a must-have, not a nice-to-have.

In fact, leadership skills top the list of corporate training priorities for 2025. Following closely are training on corporate culture, strategic workforce planning, change management, and HR technology. These aren’t just buzzwords — they’re essential for navigating today’s rapidly evolving work landscape.

The numbers speak volumes, too. The corporate leadership training market was worth nearly $34 billion in 2023, is expected to hit $36.6 billion in 2024, and could soar to $72.65 billion by 2032. Large companies dominate this space, meaning startups like Tenor have the chance to land big-ticket contracts if they play their cards right.

And AI-powered training isn’t just a corporate trend; it’s making waves across industries. Sales teams are using platforms like Hyperbound and Zenarate to practice cold calls and client conversations. Medical students are honing diagnostic skills with Soma Labs. Even teachers are bringing AI-driven historical figures into classrooms with tools like Humy.

In short, Tenor isn’t just riding a wave — it’s tapping into a growing, multi-industry movement where AI-powered role-play is becoming the go-to method for hands-on, risk-free skill development.

Key Takeaways

Corporate training is not only a vast and expanding market but also one where leadership skills have consistently been the top priority for companies over the past three years. The demand stems from the realization that strong leadership drives team performance and organizational success.

The challenge lies in the nature of leadership skills — they can’t be mastered through theory alone. Real-world practice is essential, but such practice comes with risks. Employees might make costly mistakes while learning, which makes the use of AI characters for training an ideal solution.

Tenor’s approach, allowing employees to practice leadership scenarios in a controlled, realistic environment, addresses this challenge directly. By combining personalized feedback, skill development plans, and adaptable training scenarios, it offers a practical and scalable way for companies to develop their leaders.

The potential for innovation extends far beyond Tenor’s model:

• Corporate leadership training: Platforms like Tenor can serve as a blueprint for creating tailored AI-based solutions for specific industries or organizational needs.

• Cross-industry applications: The use of AI characters can expand into diverse fields, such as sales, medicine, and education, where real-world practice is equally crucial but challenging to implement at scale.

With the corporate training market projected to double by 2032, the opportunities are immense. The growing appetite for lifelike, immersive learning experiences suggests that startups leveraging AI characters are well-positioned to capture significant market share.

What other areas of training or skill development could benefit from AI-driven simulations? The possibilities are vast, and the time to innovate is now.

Company info

Tenor

Website: https://tenorhq.com/
Last funding round: $5.4 million, 19.12.2024
Total funds raised: $5.4 million over 1 round