Customer service has been for a long time considered to be the “stinky armpit” of business, says Zayd Enam, the cofounder and CEO of Cresta. This startup creates software specifically for that reason. However, that perception is beginning to change, as evident by Zoom’s attempts to kick-start its second chapter by launching the splashy $14.7 billion offer to purchase the call centre company Five9.
The deal eventually was not a success; however, Zoom and Five9, along with Genesys, another big player in the field of call centres–are joining forces for a stake in the Company Cresta. The Company is based in San Francisco. The Company announced that it raised $80 million through a series C led by Tiger Global, which increased the Company’s value up to $1.6 billion. The funding comes just one year after it received 50 million in the Sequoia-led Series B round; Sequoia and other previous supporters Andreessen Horowitz and Greylock also took part in the latest round.
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Five9 and Zoom Make An Investment In AI Company Cresta
Cresta began operations out of secret in 2020, the result of a Stanford AI lab project started by Enam and the chief tech officer Tim Shi and Google X founder Sebastian Thrun (an adjunct professor at Stanford and chairman of the board of Cresta). Forbes named Enam to its 30 Under 30 list in 2018, and Cresta was added to their AI 50 list of promising AI companies last year.
The software is powered by AI and provides real-time information during conversations to assist customers; service agents solve issues, and salespeople close deals. Customers purchase the software from Cresta to be used in conjunction with their main suite of software in every category, like five9, and Genesys, to help with Customer service or sales.
The Company targets large business companies and is aiming to reach 100 of these customers that, include Verizon, CarMax and Porsche. The Company’s revenue grew by a third in 2021 and is currently at the high end of double-digit thousands, Enam says. He says one of the main reasons for this growth isn’t new customers; however, it is the existing users, evidenced by a retention rate of over 200 per cent. Customers often start by signing agreements with five or six digits to test the software within a specific company area before expanding the program to other areas of their business.
The capital increase will go to developing additional features and primarily to gain more insight from what a client speaks during a phone call, according to Enam. “We could say”This method of promoting the product does not resonate with your customers or that your competitors have an effective and less expensive solution and are more cost-effective,'” he says. “Then our users can make changes and make it available to their contact centre representatives.”
Cresta employs 150 employees and plans to recruit additional ones. In August, the Company hired the Google founder who founded its contact centre AI business to be its chief engineer. This hire and Thrun’s Google experience have resulted in a “talent attraction” that attracts Google employees, as claimed by the CEO that since the fall of last year, Cresta has hired 30 engineers from the tech giant.
Additionally, the funds will assist Cresta in keeping up with the flurry of startups trying to improve the number of calls. Gong offers its products directly to sales representatives, while companies such as Talkdesk, Dialpad and ASAPP offer artificial intelligence-based solutions to improve customer service. In the last month, Uniphore closed a $400 million capital raise–the largest ever in this space–to grow its product line; the Company stated to Forbes magazine that it was close to generating $100 million in revenues.
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“I believe there will be one of the leaders in this field, but you will see several other companies trying to enter the call centre industry and make use of AI,” says Sequoia partner Carl Eschenbach, who serves on the Company’s board. Enam believes that his startup is ahead of its competitors in two areas. He says many other startups are creating “lazy artificial intelligence,” which may be useful in automatizing tedious tasks. Still, it’s not great at providing instant assistance to customer service agents and sales representatives.
Enam says that some startups have attempted to adopt the “platform” approach, replacing the infrastructure by creating the Company’s product. Cresta is an overlay on top of existing infrastructure that has gained from this method by attracting new customers who weren’t satisfied with the offerings that it “rip and change” competitors, Enam says.
Enam believes that one option Cresta could gain traction is by leveraging its list of supporters. He mentions the former Bolt chief Ryan Breslow’s controversial tweet, which referred to Stripe to be an example of “mob leaders” from Silicon Valley; rather than it being a problem, Enam says it’s “a legitimate fundraising strategy”–and one he’s looking to duplicate with Cresta. Following in the footsteps of the fintech giant valued last year at $95 billion, Enam claims he targeted major firms such as Sequoia and Andreessen Horowitz to back his Company and acquire public companies such as Zoom and Five9 based on the same premise.
“That’s somewhat been the primary goal from early on in the company to attract those individuals to join,” he says. “You’re setting the conditions for success by letting the capital markets select the winner of the market.”