Contact centers play a key role in the calls that a business engages with customers, representing a $400 billion market globally. Today, a company that believes it can improve the way agents work within them using AI is announcing a big funding round. Observe.ai, which provides natural language tools to track voice and text conversations, and to provide advice for subsequent engagements and to use the data for compliance and other reporting requirements, has raised $125 million, funding it will use to continue developing its technology and entering more markets.
Their goal, said Swapnil Jain, CEO of Observe.ai, is to target the “terrible experiences” that tend to be the norm when it comes to contact center engagements.
The company has several large multinationals among its clients; he doesn’t reveal which ones, but Jain mentioned the names of some of the major telcos in our conversation, without confirming whether they were actual customers. The ones he does reveal on his site are smaller names like Kin, Beyond, and Public Storage. The company said in March that ARR increased 150%, with customer interactions analyzed by its AI up to 3x, and a 426% increase in AI-powered agent assessments, with a 201% increase in AI-powered agent training sessions.
(It doesn’t reveal hard revenue figures, so take the percentages with a grain of salt…)
The funding is a Series C and has some notable investors. SoftBank Vision Fund is leading the round, with video conferencing giant Zoom participating, along with previous investors Menlo Ventures, Scale Venture Partners, Nexus Venture Partners and others. Observe.ai has now raised $213 million and isn’t disclosing the valuation, but for some context, PitchBook notes that San Francisco-based Observe.ai was valued at $304 million as of July 2020.
Zoom is a strategic investor in this round, but Jain declined to elaborate on what the two will do together, though he said it’s likely to be revealed in the next month or two. Remember that Zoom has had big ambitions to enter the contact center market for a while.
Zoom launched a new contact center solution in February 2022, though its bid to acquire Five9, a big player in the space, for nearly $15 billion failed after the latter company’s shareholders rejected the offer. While there may still be some debate about whether or not customers, or even agents or businesses, want a lot of video engagement on calls, there are times when you can imagine it could be useful, such as in help desk cases.
Observe.ai could add a sweetener to that mix for potential customers, in the form of intelligence that can be applied to both voice-only and chat interactions. But it seems like it could also be moving to gauge sentiment and conversations through the more famous medium of Zoom:
“This will be the first time we’ve worked with video analytics,” Jain said, though it’s too early to say what value we’ll get from analyzing all of that.”
The contact center market is one of the noisiest when it comes to enterprise software and its adoption of AI. Anecdotally, I’m not sure TechCrunch covered a single contact center startup in the past few years that does not have he leaned into talking about AI innovation to alter how everything works. (Gong.ai, Google, TalkDesk, and more are among those playing the game in this space.)
Observe.ai was incubated at Y Combinator (part of their Winter 2018 cohort) and has been around since 2017, and believes it has been one of the leaders in this movement, in part due to team members like Jithendra Vepa, its chief scientist. learning machine, which previously led the Samsung team working on its Bixby artificial intelligence assistant. “We are focused on precision AI,” said Jain, who co-founded the startup with Akash Singh (CTO) and Sharath Keshava (CRO).
A critical point in the approach that Observe.ai takes is that it sees itself as an augmentation, not a replacement, for real agents, a distinction that stands out as a key point of differentiation between different AI approaches.
“Tthere will be significant workflows when we talk about contact entries. We know there will be support, but now more than 40% of customers use contact centers for sales processes as well. When you’re a buyer getting insurance, you want to get a human being and trust.”
Part of the rationale for this big funding round is also to give the company some clue in the run-up to what it describes as “preparing for an IPO,” though there’s no timetable for how and when that might take place. .
Meanwhile, big sponsors are showing up for what looks like a huge opportunity today.
“Observe.AI has a transformative vision to deliver actionable and trusted AI that empowers digital-first businesses to create exceptional customer experiences,” said Priya Saiprasad, partner at SoftBank Investment Advisers, in a statement. “The company has created a smart and flexible platform with endless use cases, from healthcare companies looking to improve the patient experience to financial institutions looking to increase revenue. We are delighted to partner with Swapnil and the team to help them accelerate a paradigm shift within the contact center industry.”