Contact centres are an important aspect of how a company interacts with customers, accounting for a $400 billion market worldwide. Today, a startup that hopes artificial intelligence might improve how agents work within them announced a large round of funding.
Observe.ai, a company that uses natural language tools to track voice and text conversations, provide coaching for future engagements, and use the data for compliance and other reporting requirements, has raised $125 million. The money will be used to expand the company’s technology and expand into new markets.
Its goal, according to Swapnil Jain, CEO of Observe.ai, is to target the “dreadful experiences” that are all too common in contact centre interactions.
The company boasts a number of significant multinationals as customers – it doesn’t say which ones, but Jain mentioned a few major telecoms companies by name during our chat without saying whether they were actual customers. Kin, Public Storage, 23andMe, Group 1 Automotive, Accolade, and Pearson are among the companies it does reveal.
In March, the company reported a 150 percent boost in ARR, with 3x more customer interactions assessed by AI and a 426 percent rise in AI-powered agent evaluations, as well as a 201 percent increase in AI-powered agent teaching sessions. (It does not provide exact income figures, only stating that it is in the “healthy eight-figure range,” thus percentages should be taken with a grain of salt.)
The round is a Series C, and it includes some well-known investors. The investment is led by SoftBank Vision Fund, with participation from videoconferencing giant Zoom, as well as existing investors Menlo Ventures, Scale Venture Partners, Nexus Venture Partners, and others. Observe.ai has funded $213 million and is not releasing its valuation, however PitchBook says that Observe.ai, situated in San Francisco, was valued at $304 million in July 2020.
Zoom is a strategic investor in this round, but Jain wouldn’t say what the two will be doing together, saying only that it will be announced in the next month or two. For a long time, Zoom has had high goals to break into the contact centre business.
In February 2022, Zoom introduced a new contact centre solution, but its effort to buy Five9, a major player in the field, for over $15 billion fell through after the latter’s shareholders rejected the deal. While there is still some dispute over whether customers, agents, or businesses want a lot of video participation in calls, there are situations when it might be advantageous, such as when providing technical support.
Observe.ai could add a sweetness for potential customers in the form of intelligence that can be applied to both voice-only and chat encounters. However, it appears that it may be going into tracking sentiment and dialogues over Zoom’s most well-known media as well:
“Working with video analytics will be a first for us,” Jain said, “although it’s too early to predict what value we’ll receive from studying all of it.”
When it comes to enterprise software and AI adoption, the contact centre sector is one of the most crowded. Anecdotally, I’m not sure if TechCrunch has covered a single contact centre startup in the previous several years that hasn’t used AI innovation to disrupt how things are done. (Players in this field include Gong.ai, Google, Talkdesk, and others.)
ai has been around since 2017 and was incubated at Y Combinator (as part of its Winter 2018 cohort). It believes it has been one of the leaders in this movement, thanks in part to team members like Jithendra Vepa, its chief machine learning scientist, who previously led the team at Samsung working on its AI assistant Bixby. “AI accuracy is our emphasis,” stated Jain, who co-founded the company with Akash Singh (CTO) and Sharath Keshava (CRO).
One crucial aspect of Observe.ai’s approach is that it sees itself as an enhancement rather than a replacement for actual agents, a distinction that is shaping up to be a key point of differentiation between different AI approaches.
“When we talk about contact enters, there will be major workflows.” We know there will be assistance, but more than 40% of customers already use call centres for sales processes as well. When you’re looking for insurance, you want to deal with a person you can trust.”
Part of the motivation for this massive investment round is to give the firm some runway while it prepares for what it calls “IPO ready,” but there is no timetable for how or when that will happen.
Meanwhile, big backers are flocking to today’s event, which appears to be a huge opportunity.
“Observe.ai in a statement, Priya Saiprasad, a partner at SoftBank Investment Advisers, said, “AI has a transformative ambition to deliver actionable and trustworthy AI that helps digital-first enterprises to create great customer experiences.” “The company has created an intelligent, versatile platform with limitless use cases, ranging from healthcare organisations looking to improve patient experience to financial institutions looking to increase income.” We’re excited to work with Swapnil and the rest of the team to assist them expedite a paradigm change in the contact centre sector.”