(Bloomberg) -- A group of seasoned Silicon Valley executives raised $50 million for a new startup that provides artificial intelligence-enhanced contact center services, joining a crowded field of companies looking to upend traditional outsourcing.
San Francisco-based Crescendo is valued at $500 million after securing capital from investors including General Catalyst, according to co-founder Anand Chandrasekaran, a former executive at Yahoo! Inc., Meta Platforms Inc. and call center software firm Five9. The startup on Wednesday also disclosed the acquisition of Boise, Idaho-based outsourcing firm PartnerHero.
Crescendo’s platform includes AI assistants, with human backup, that help businesses answer customers’ questions online or via voice, automating frequent tasks that human operators typically perform.
“AI is transforming contact centers” and is poised to shake up the sector, which has long relied on vast armies of humans, Chandrasekaran said in an interview. Crescendo is incorporating AI technology from the start, resulting in faster and more accurate responses with fewer humans compared to traditional players, he said.
The startup faces stiff competition from major conventional players in the massive global outsourcing industry, with many firms increasingly using AI in their operations. Legacy companies have been teaching their staff to use AI “copilots” and can draw upon troves of data gathered over decades to train their AI bots.
Crescendo’s other co-founders are Andy Lee, executive chairman of customer service firm Alorica, Matt Price, a former executive at customer experience software maker Zendesk, and Slava Zhakov, the former chief technology officer at cloud-based customer service firm Genesys.
Hemant Taneja, chief executive and managing director of venture capital firm General Catalyst, is joining Crescendo’s board. Crescendo’s investors also include VC firm Celesta Capital, along with Alorica.
Crescendo, which launched in January, counts among its customers a consumer electronics company and an events management firm. It is using the new funds to fuel its expansion — the PartnerHero purchase gives it more than 200 customers and additional staff in several countries.
With AI technology evolving quickly, investors have been pouring billions of dollars into firms trying to revolutionize everything from the creation of software to the generation of text and images. The market for AI-related products globally is set to grow from $185 billion last year to as much as $990 billion in 2027, Bain & Co. said last week.
“Generative AI has been a game changer” in how customer experience providers can engage with customers, said Lee.
“There’s a huge amount of opportunity in transforming this industry that previously was essentially a business process outsourcing industry to a 21st century sort of AI-based modern department for businesses,” Taneja said.
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