Conversational AI platform Parloa has nabbed $66 million in a Series B round of funding, a year after the German startup raised $21 million from a swathe of European investors to propel its international growth.
The company is focusing on the U.S. market in particular, where Parloa opened a New York office last year — it says this hub helped it sign up “several Fortune 200 companies” in the region. For its latest instalment, Parloa has secured Altimeter Capital as lead backer, a U.S.-based VC firm notable for its previous investments in the likes of Uber, Airbnb, Snowflake, Twilio, and HubSpot.
AI and automation in customer service is nothing new, but with a new wave of large language models (LLMs) and generative AI infrastructure, truly smart “conversational” AI (i.e. not dumb chatbots) is again firmly in investors’ focus. Established players continue to raise substantial sums, such as Kore.ai which closed a chunky $150 million round of funding a few months ago from big-name backers such as Nvidia. Elsewhere, entrepreneur and former Salesforce CEO Bret Taylor launched a new customer experience platform called Sierra, built around the concept of “AI agents,” with north of $100 million in VC backing.
Parloa is well-positioned to capitalize on the “AI with everything” hype that has hit fever pitch these past couple of years, as companies seek new ways to improve efficiency through automation.
Founded out of Germany in 2018, Parloa has already secured high-profile customers such as European insurance giant Swiss Life and sporting goods retailer Decathlon, which use the Parloa platform to automate customer communications including emails and instant messaging.
However, “voice” is where co-founder and CEO Malte Kosub reckons Parloa stands out.
“Our strategy has always been centered around ‘voice first,’ the most critical and impactful facet of the customer experience,” Kosub told TechCrunch over email. “As a result, Parloa’s AI-based voice conversations sound more human than any other solution.”
Parloa platform Image Credits: Parloa
Co-founder and CTO Stefan Ostwald says that AI has been a core part of Parloa’s DNA since its inception six years ago, using a mix of proprietary and open source LLMs to train models for speech-to-text use-cases.
“We’ve trained a variety of speech-to-text models on phone audio quality and customer service use cases, developed a custom telephony infrastructure to minimize latency — a key challenge in voice automation — and a proprietary LLM agent framework for customer service,” he said.
Prior to now, Parloa had raised around $25 million, the bulk of which arrived via its Series A round last year. And with another $66 million in the bank, it’s well-financed to double down on both its European and U.S. growth, with Kosub noting that it has tripled its revenue in each of the past three years.
“We successfully entered the U.S. market in 2023 — we’ve always had confidence in the excellence and competitiveness of our product, however the overwhelming and rapid success it achieved in the U.S. surpassed everyone’s expectations,” Kosub said.
Aside form lead investor Altimeter, Parloa’s Series B round included cash injections from EQT Ventures, Newion, Senovo, Mosaic Ventures and La Familia Growth. Today’s funding brings Parloa’s total capital raised to-date to $98 million, following its $21 million Series A funding round led by EQT Ventures in 2023.