Decagon raises $35 million for AI-powered customer service

FILE PHOTO: AI (Artificial Intelligence) letters and robot hand miniature in this illustration taken, June 23, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

By Anna Tong

SAN FRANCISCO (Reuters) - - Decagon, a startup that sells artificial intelligence-powered customer support solutions, said on Tuesday it had raised $35 million in Series A and seed funding. Accel led the series A round with participation from Andreessen Horowitz.

Decagon uses generative AI to replace or augment a company's customer support workforce.

Generative AI, which came to prominence when Microsoft-backed OpenAI launched the viral ChatGPT chatbot in late 2022, is seen as a game-changer for the customer-service industry, as the technology excels at imitating human communication and providing personalized interactions.

The funding round puts Decagon in competition with other well-capitalized customer support AI startups like Forethought, which has raised over $90 million from New Enterprise Associates and other venture capital funds.

Accel partner Ivan Zhou told Reuters that Decagon's product is differentiated because in addition to powering a customer-support chatbot, it also functions as a company's internal customer support liaison and provides services like creating software bug reports, analyzing customer emails to suggest product improvements or writing internal documentation.

(Reporting by Anna Tong in San Francisco; Editing by Matthew Lewis)