May 2, 11:01 PM

Decagon in Talks to Raise $100 Million Led by a16z, Accel at $1.5 Billion Valuation

AI startup Decagon, which develops customer service-focused AI agents, is in talks to raise $100 million in a new funding round at a $1.5 billion valuation, according to multiple sources. The round is reportedly being led by Andreessen Horowitz (a16z) and Accel, with participation from existing investors. Decagon confirmed it is in talks to raise additional funding, but noted the round has not been closed yet and figures could change. Decagon's technology is used by companies such as Notion, Bilt, Duolingo, Substack, and Rippling to automate customer support tasks, including answering product questions, processing refunds, and canceling subscriptions. The company has more than $10 million in signed contracts and was founded in 2023 by CEO Jesse Zhang and CTO Ashwin Sreenivas. The startup's AI agents are built on advanced models from OpenAI, Anthropic, and Cohere, and are trained on internal data such as manuals and past customer conversations. Staff rate and review responses generated by the AI to improve performance. Decagon recently partnered with ElevenLabs to create voice agents for more natural customer interactions. Decagon's clients have reported significant cost savings; for example, Bilt reduced its customer support team from hundreds to 65, and ClassPass cut its customer support costs by 95%. CEO Jesse Zhang has said, "We think AI agents can be 10x employees." Decagon faces competition from Sierra, valued at $4.5 billion and led by Bret Taylor, as well as from Salesforce. The products are often compared in 'bake offs' to assess performance, and Decagon claims frequent wins against Sierra. The latest funding round follows a $65 million Series B raised less than a year ago at a $650 million valuation. If completed, the new round would bring Decagon's total funding to $200 million. Decagon was recently featured on the Forbes AI 50 list.

#Decagon #Andreessen Horowitz #Accel #Notion #Bilt #Duolingo #Substack #Rippling #Jesse Zhang #Ashwin Sreenivas #OpenAI #Anthropic #Cohere #ElevenLabs #ClassPass #Sierra #Bret Taylor #Salesforce #Forbes AI 50

Written with ChatGPT (GPT-4).

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Decagon in Talks to Raise $100 Million Led by a16z, Accel at $1.5 Billion Valuation

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