The size of the round “allows us to not have to take any more pitstops between now and us preparing to make the company public ready,” says Uniphore cofounder and CEO Umesh Sachdev.
Uniphore
When Umesh Sachdev was pitching at a 2017 MIT event in New Delhi, he stood out to an important visitor: John Chambers. After retiring from his decades-long stint at the helm of Cisco, Chambers had started his own venture firm to coach young CEOs, most of them located in the United States. Sachdev became the exception. The India native had spent nine years building software powered by artificial intelligence, and Chambers was bullish on the topic. Discussing their visions for AI in the future, “we’d just finish each other’s sentences,” Chambers says.
Two years later, with Chambers’ guidance, Sachdev moved the base of operations for 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 starting to reap the dividends of his mentorship.
Uniphore announced Wednesday that it had raised $400 million at a $2.5 billion valuation. It is the largest financing to date in call center AI, which involves utilizing natural language processing (NLP) to gauge content and sentiment in a customer’s speech, then provides customer service agents with live action suggestions or post-call analytics to review. NEA leads 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 the Indian Institute of Technology Madras. When the startup opened its Palo Alto, California headquarters in 2019, Sachdev moved to Silicon Valley, while Saraogi stayed behind to spearhead the company’s business in Asia. Over more than a decade, the company opted to focus its buildout of AI tools specifically on contact centers, or call centers, the common medium used by large businesses like airlines and banks to handle customer service.
Sachdev says the company is on track to meet a goal it set three years ago to reach $100 million in annual recurring revenue by the end of its 2022 fiscal year, which ends April 30. Much of that comes from Uniphore’s success selling to enterprise clients: 15 customers pay more than $1 million a year, and three are spending more than $5 million. Uniphore makes about 70% of its money by selling to about 100 large companies including DHL and Priceline, Sachdev says; the rest comes from outsourced call center services. “Snowflake and CrowdStrike made their journey from $100 million to $1 billion in about three years,” he says. “We haven’t set that goal for ourselves yet, but boy would I love to do it in three years.”
Uniphore’s new capital is sizable, but not without competition. Its use of NLP and machine learning is a blueprint common across call center AI companies such as Cogito (last known valuation $270 million) and ASAPP ($1.6 billion). But Sachdev believes Uniphore can stand out through its multitude of offerings. They include a virtual assistant, voice authentication for fraud prevention and tools for companies to automate certain customer interactions. NEA’s Koplow-McAdams says she has not come across any other startups in the space with as many product offerings. “Everyone that I’ve looked at is taking a narrower view, which is appropriate—if you are going to start anywhere, you start narrow—but nobody can hold a candle to the breadth of Uniphore’s vision,” she says.
Even if Koplow-McAdams is right, Uniphore still has to battle with legacy call center software makers, as well as the cloud giants. Google is developing its own in-house service, which Microsoft announced last April that it had bought healthcare-focused voice AI firm Nuance Communications for $19.7 billion. Five9 remains a standalone company after Zoom called off a planned $14.7 billion acquisition. To level up, Uniphore made its first two acquisitions in 2021, one to beef up its automation features and another to detect emotional cues in video conversations. “$400 million is enough dry powder for us to continue to think about more acquisitions,” Sachdev says.
Other portions of new capital are earmarked towards adding more products, languages and geographies, he says. Despite spending more than a decade based in Asia, Uniphore has about 70% of users located in North America. Europe and additional Asian countries are next in line, Sachdev says. With its initial product roadmap completed, the company is also beginning to expand beyond the call center. “Every area where a Zoom call or a WebEx meeting or a phone call occurs” can benefit from the same set of AI tools, Sachdev says, listing sales, human resources, finance and legal as examples.
To Chambers, customer service software is the space most likely to produce tomorrow’s AI tech giants. He even argues that the startup’s root AI functionalities outclass those of more valuable breakouts like Snowflake and DataRobot. “I would argue they haven’t built as strong a base on the AI expertise in total as what Uniphore is doing,” Chambers says.
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