AI startup Phonic announced Phonic-1 on October 29, 2026, alongside a $27.5 million Series A funding round. The company describes the model as a speech-to-speech system designed for agentic tasks, in which AI systems can carry out actions during conversations.
According to Phonic's announcement, First Round led the investment, with participation from Lux Capital, Felicis and Definition. The funding brings the company's total capital raised to $31.5 million. Phonic also said Phonic-1 ranked first on the Artificial Analysis Speech to Speech Index.
Many voice assistants use separate models to convert speech into text, generate a response and then produce spoken audio. Phonic says its approach works directly with speech. This distinction matters for businesses developing customer-service agents, where tone, pauses and conversational turn-taking can affect how interactions are handled.
Phonic said third-party blind human evaluations preferred its model over competing responses in the majority of evaluations. The company also presented demonstrations involving flight-status enquiries and delayed-package complaints.