Customer service AI startup Decagon raises $131 million
Decagon, a startup providing customer service solutions powered by artificial intelligence, said on Monday it had raised $131 million in a funding round that valued it at $1.5 billion.
The San Francisco company's Series C round was led by venture capital firms Accel and Andreessen Horowitz, with existing investors A*, Bain Capital Ventures and BOND participating. Avra, Forerunner and Ribbit Capital also took part in the round.
The fundraise comes less than a year after a Series B round, when it raised $65 million at a $650 million valuation.
The funding establishes Decagon as one of the most highly valued AI startups providing AI customer support solutions. Its competitors include giants like Salesforce and startups like Sierra, helmed by OpenAI board chairman and former Salesforce co-CEO Bret Taylor. In October, Sierra raised $175 million in a funding round giving it a $4.5 billion valuation.
Since OpenAI's ChatGPT burst on the scene, investor interest in funding AI technology has gradually shifted from expensive foundation models to applications that generate steady revenue.
Decagon serves clients such as Hertz, Duolingo, Eventbrite and Chime. The company will use its funding to grow the team and sell into more enterprises, its CEO Jesse Zhang told Reuters. Financial services company Chime saw a 60% reduction in contact center costs from using Decagon and a doubling of its net promoter score, a measure of customer satisfaction, Zhang said. "When AI can take action and solve things, customers can get what they want much faster and more consistently," he said. The company provides both text-based AI customer support solutions like chat and email as well as AI voice agents that are capable of end-to-end customer support calls. Decagon's software tools also allow companies to create their own AI customer support solutions, Zhang said.
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