Sierra, a conversational artificial intelligence startup founded by OpenAI Chair Bret Taylor and former Google executive Clay Bavor, has raised $350 million in new funding for a $10 billion valuation, the founders said Thursday (Sept. 4).
The 18-month-old startup offers a platform that enables companies to build and deploy AI-powered chatbots that can answer a variety of questions and even take action for consumers. It’s a step up from the rule-based chatbots of old that are stymied by things like misspellings.
For example, a shopper looking to buy flowers at a flower shop engages with an AI chatbot built on Sierra’s Agent OS platform. The chatbot can understand the shopper even with misspelled queries. It can offer alternative recommendations if a product is out of stock, change a shopper’s order and even charge the customer’s card on file.
Many of today’s customer-service chatbots don’t respond that way. Most are pre-programmed to deliver set responses. A customer who asks a question outside those parameters gets a confused answer. Nearly three years after ChatGPT debuted, many company chatbots remain dumb.
Meanwhile, consumers are moving toward smarter AI chatbots. According to PYMNTS Intelligence data, two-thirds of Gen Z consumers already use ChatGPT and other AI chatbots for work and personal chores, while 52% of millennials said they use it for their jobs.
Despite changing consumer behavior, many chatbots remain robotic. At a conference in February, Taylor discussed why this was the case, saying companies face tradeoffs when deploying AI chatbots. On the one hand, chatbots can respond with free-form conversations and say whatever they want, which can be risky. But the other option is to restrict the chatbot and it becomes a “robot,” he said, leading to a poor customer experience.
Sierra aims to solve this problem. The startup said it already has “hundreds” of customers spanning financial services, healthcare, telecom, retail and consumer services. More than 20% of clients have revenue of over $10 billion and over half have revenues of more than $1 billion.
The AI chatbots built on Sierra’s platform perform a variety of everyday interactions, from refinancing homes and resolving billing disputes to fixing home alarms and delivering furniture. Taylor and Bavor said Sierra aims to move beyond customer service into sales and engagement.
Greenoaks, which had backed Databricks, Scale.ai and Canva, led the latest funding round. Early investors include the storied Sequoia Capital — which famously backed Apple, Google, Airbnb, Nvidia and many others early on — and Benchmark, which had backed eBay and Uber.
Sierra’s founders said it will use the new funds for its Agent OS platform, expand U.S. offices beyond ones in San Francisco, New York and Atlanta, and fund international growth across Europe and Asia.
“We want to bring Sierra to every company in the world, and it starts with having a presence in all parts of it,” they wrote. “The opportunity ahead is enormous — for our customers, their customers, and Sierra.”
Source: https://www.pymnts.com/