The intelligent contact center software provider Z21 Labs Inc., which does business as Observe.ai, announced today it has raised $125 million in a new round of funding.
The Series C round was led by SoftBank Vision Fund and saw participation from Zoom Video Communications Inc., plus existing investors Menlo Ventures, Scale Venture Partners and Nexus Venture Partners, bringing the company’s total amount raised to date to $231 million.
Observe.ai is the creator of an intelligent call center platform that helps human operators with tasks such as customer service. It relies on artificial intelligence-based natural language processing algorithms to analyze the conversations operators have with customers.
The software can also transcribe each call and perform sentiment analysis to try to gauge the caller’s level of satisfaction. It also attempts to draw correlations between the operator’s words and actions and the caller’s happiness.
By doing all of this, Observe.ai says, companies glean insights they can use to train their call center staff and improve customer service experiences. For example, the best-performing call center agents can be used as benchmarks to determine what works, and this information can then be used to train new or underperforming staff.
Another interesting feature of Observe.ai’s platform is its ability to detect “dead air,” or gaps in the conversation, and try to figure out where the agent may have knowledge gaps that caused this silence. Interestingly, the software can even differentiate between different kinds of silence, so if an agent puts a caller on hold, it will know that person has just come up short on a question.
Last year, Observe.ai acquired a company called Scope.ai, which sold chat and text-based customer support software. Observe.ai said at the time it plans to merge its analytics capabilities with those channels, so it can offer customers a more comprehensive range of customer service solutions.
“The company has built an intelligent, flexible platform with endless use cases, from healthcare companies seeking to enhance patient experience through to financial institutions aiming to boost revenue,” said Softbank Investment Advisers Partner Priya Saiprasad.
Liz Miller of Constellation Research Inc. said contact centers are trying to evolve from cost centers that simply answer and route calls to profit centers that can purposefully enhance and advance customer experiences to become more profitable and durable relationships. As such, she expects investments in AI platforms like Observe.ai to kick into a higher gear this year.
“Observe.ai strikes at focusing AI-fueled support to enhance the agent’s experience that, in turn, optimizes the customer’s experience,” Miller said. “As call center leaders must grapple with increasing turnover, higher costs and the need for contact center agents to also serve as front-line experts armed with knowledge about both product and customer, AI becomes a critical tool to surface recommendations, coaching and training enhancements and opportunities for agents to be successful.”
Observe.ai reckons its products have been well received. In its press release today, it said it saw record growth in fiscal 2022, with its annual recurring revenue rising by almost 150%, though it didn’t provide specifics. Meanwhile, it increased its base of customers that spend at least $100,000 a year on its software by more than 125%. At the same time, Observe.ai said, it saw a three-times increase in customer interaction volume over the last year, a 426% jump in AI-powered call center agent evaluations and a 200% rise in AI-powered coaching sessions.
Despite its strong growth, Miller said Observe.ai is facing some very strong competition in the contact center space from rivals such as Salesforce.com Inc., Zendesk Inc., Five9 Inc., Zoom Video Communications Inc., Google LLC and Amazon Web Services Inc. So it will be forced to invest its cash very wisely if it’s to succeed, she said.
“These rivals have also announced new enhancements tied to AI that range from workforce coaching to planning self-service experiences, and even natural language processing that transforms voice to text and from there, to data and insights about customers,” Miller said. “To stand out, the question becomes where else can Observe.ai impact the overarching business. Where can it inject intelligence or spark automated workflows that take the voice of the customer beyond the contact center?”
Observe.ai co-founder and Chief Executive Swapnil Jain said the contact center industry is undergoing a once-in-a-generation transformation, and that companies can make or break business outcomes by investing in the right technologies in the market.
“This fresh round of funding is further validation that Observe.AI is uniquely positioned with our industry-leading product innovations and offerings, robust services expertise and partner ecosystem, and intimate understanding of and execution on the evolving needs at the intersection of AI and CX,” he said.
The company said the money from today’s round will help to accelerate new product innovations, scale up its go-to-market efforts, drive further geographic expansion and accelerate its timeframe to a potential initial public offering of stock.