When Umesh Sachdev delivered a pitch at a 2017 MIT event in New Delhi, he stood out to a prominent visitor: John Chambers. After retiring after several decades at the helm of Cisco, Chambers had started his own venture capital firm to coach young CEOs, most of them located in the United States. Sachdev has become the exception. The Indian native had spent nine years building AI-powered software, and Chambers was optimistic about it. When discussing their visions for AI in the future, “we would just finish each other’s sentences,” Chambers says.
Two years later, with guidance from Chambers, Sachdev moved the base of operations of his call center-focused AI startup, Uniphore, to the United States. Chambers, who acquired a 10% stake in Uniphore in 2017 at a $30 million valuation, is now beginning to reap the dividends of his mentorship.
Uniphore announced on Wednesday that it had raised $400 million for a valuation of $2.5 billion. It’s the biggest funding yet in call center AI, which involves using natural language processing (NLP) to assess content and sentiment in a customer’s speech, then provides customer service agents with live action suggestions or post-call analytics to review. NEA is leading the round, with partner Hilarie Koplow-McAdams, a former executive at Oracle, Salesforce and New Relic, joining the board.
Sachdev and Ravi Saraogi founded Uniphore in 2008, incubating it out of Indian Institute of Technology Madras. When the startup opened its headquarters in Palo Alto, Calif., in 2019, Sachdev moved to Silicon Valley, while Saraogi stayed on to lead the company’s business in Asia. For more than a decade, the company has chosen to focus its build of AI tools specifically on contact centers, or call centers, the common medium used by large enterprises like airlines and banks to manage customer service.
Sachdev says the company is on track to meet the goal it set three years ago of hitting $100 million in annual recurring revenue by the end of its 2022 fiscal year, which will ends April 30. Much of this stems from Uniphore’s success in selling to enterprise clients: 15 clients pay over $1 million per year and three spend over $5 million. Uniphore makes about 70% of its money selling to about 100 large companies, including DHL and Priceline, says Sachdev; the rest comes from outsourced call center services. “Snowflake and CrowdStrike grew from $100 million to $1 billion in about three years,” he says. “We haven’t set that goal yet, but I’d love to do it in three years.”
Uniphore’s new capital is substantial, but not without competition. Its use of NLP and machine learning is a common pattern among call center AI companies such as Cogito (last known valuation of $270 million) and ASAPP ($1.6 billion). But Sachdev thinks Uniphore can stand out with its multitude of offerings. They include a virtual assistant, voice authentication for fraud prevention, and tools for businesses to automate certain customer interactions. NEA’s Koplow-McAdams says she hasn’t come across any other startup in the space with so many product offerings. “Everyone I’ve consulted takes a narrower view, which is appropriate – if you start anywhere, you start narrow – but no one can hold a candle to match Uniphore’s vision,” says -she.
Even if Koplow-McAdams is right, Uniphore still has to contend with legacy call center software makers, as well as cloud giants. Google is developing its own in-house service, which Microsoft announced last April that it had bought healthcare-focused voice artificial intelligence company Nuance Communications for $19.7 billion. Five9 remains a standalone company after Zoom scrapped a planned $14.7 billion acquisition. To take it to the next level, Uniphore made its first two acquisitions in 2021, one to strengthen its automation features and another to detect emotional signals in video conversations. “$400 million is enough dry powder to keep us thinking about other acquisitions,” Sachdev says.
Other parts of the new capital are intended to add more products, languages and geographies, he says. Although it has spent more than a decade in Asia, Uniphore has approximately 70% of users located in North America. Europe and other Asian countries are next, says Sachdev. With its initial product roadmap complete, the company is also beginning to expand beyond the call center. “Every area where a Zoom call, WebEx meeting, or phone call takes place” can benefit from the same set of AI tools, Sachdev says, citing sales, human resources, finance, and legal as examples.
For Chambers, customer service software is the space most likely to produce the AI tech giants of tomorrow. He even argues that the startup’s root AI features outperform those of more valuable evasions like Snowflake and DataRobot. “I would say they haven’t built as strong a foundation on total AI expertise as what Uniphore does,” Chambers says.