Chatbot startup Decagon gets $131M to build personalized AI agents for every consumer

Decagon AI Inc., a startup that builds artificial intelligence-powered customer service agents for businesses, has closed on its third major funding round in the space of just 12 months, raising $131 million today.

The Series C round, which values the company at $1.5 billion, was led by the venture capital firms Andreessen Horowitz and Accel and saw participation from existing backers including A*, Bain Capital Ventures, Avra, Forerunner, Ribbit Capital and Bond Ventures.

The startup provides both text- and voice-based customer support bots that can automate customer interactions across chat, email and phone calls, together with software tools that allow companies to customize those bots.

Unlike some other chatbots, Decagon’s have “agentic” capabilities that enable them to take actions on behalf of customers to service the entire customer support lifecycle. They employ complex business logic to reason and take action on behalf of customer support agents, analyze trends, create and update knowledge base articles, and more. In addition, their performance improves over time, based on the feedback from customers who engage with them.

The startup says its intelligent chatbots are the result of combining third-party large language models with its own, fine-tuned AI algorithms. It explained that it can mix and match various types of models, or even combinations of multiple models, to find the best mix for different customer service-related tasks. The company continually experiments and tests these combinations of models to ensure it can provide the most helpful, friendly and accurate customer service chatbots around, free from inaccurate or toxic outputs.

Today’s round comes eight months after Decagon closed on a $65 million Series B round of funding in October, following a $35 million Series A round almost a year to the day. It means Decagon is now one of the most heavily capitalized startups that’s pursuing AI-powered customer support, where it competes against technology industry giants such as Salesforce Inc. and smaller players such as Sierra Technologies Inc., which is led by former Salesforce co-Chief Executive Bret Taylor.

Decagon says its customers include companies such as Hertz Corp., Duolingo Inc., Eventbrite Inc. and Chime Financial Inc. In a blog post, Chief Executive Jesse Zhang (pictured, left, alongside co-founder Ashwin Sreenivas) said Chime reduced its contact center operating costs by more than 60% with the help of its AI agents, while doubling its net promoter score, which is a widely used measure of customer satisfaction.

According to Zhang, the company will use the money from today’s round to grow its teams and expand sales to more enterprises. He said Decagon is working to build a future where every brand will be able to offer its customers a “personalized AI agent” that they can talk to 24/7, which knows everything about them and can take actions on their behalf.

“It’s a completely new way for consumers to interact with every brand,” Zhang said. “We believe the future of customer experience is proactive, and more than that, it’s authentic, intelligent and truly satisfying.”

Photo: Decagon AI

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