Most people dread calling customer service. The endless wait times, tedium of repeating your information multiple times and the dead-end solutions have long been a national punchline. So it’s little wonder that a growing slate of companies are using tools like machine learning and cloud computing to try to make those services smarter.
One of those companies is Talkdesk Inc., which announced on Wednesday it had raised $100 million in a funding round led by Connecticut-based hedge fund Viking Global Investors LP, and which included venture capital firm DFJ. The round boosted the software maker’s valuation above the $1 billion unicorn threshold, said Chief Executive Officer Tiago Paiva, but he declined to specify the exact number. Prior to this announcement, the company’s largest funding round had been $21 million in 2015 for its Series A.
“Talkdesk has been under the radar for a lot of people because they haven’t raised a lot of money,” said Josh Stein, a partner at DFJ. “Most people are surprised when they learn how big this market is.”
The San Francisco-based company, founded in 2011, is still a challenger in the larger customer service software industry, expected to reach $48 billion by 2025, according to the company. Industry incumbents include Cisco Systems Inc., Five9 Inc., InContact Inc. and Genesys Telecommunications Laboratories Inc.
Talkdesk’s edge, investors believe, is its cloud computing and machine-learning technology. Some existing players still store customer service software on internal servers, slowing product updates and the release of new features. As more businesses move their information technology systems to the cloud, Talkdesk sees a major opening to add new business.
Paiva said the company will use the cash injection to continue finessing a machine-learning algorithm that monitors customer communications and gives representatives pointers on the types of things they should say. Talkdesk will also expand its sales and marketing operations in North America and Europe. Talkdesk currently counts a division of International Business Machines Corp., Dropbox Inc., Stitch Fix Inc. and Peloton Cycle Inc. among its 1,400 customers.
“Almost every company has a contact center,” Paiva said. “We try to let companies talk to customers in any forum.” That includes connecting customer service staffers to consumers over the phone and via text message or live chat, as well as letting them field inquiries on Twitter Inc. and Facebook Inc.
Paiva said that despite interest from potential acquirers, he was focused on a potential IPO for the company, though he declined to give specifics on timing.