Key facts
- Respond.io raised $62.5 million in a Series B funding round.
- The company's software helps businesses manage customer conversations across multiple messaging channels.
- AI agents are used to automate customer inquiries, qualify leads, and close sales.
- Respond.io reported $35 million in annual recurring revenue and a 30% profit margin.
- The company plans to pursue hiring, organic growth, and acquisitions with the new capital.
Respond.io, a Malaysian startup specializing in AI-powered customer conversation management software, has successfully raised $62.5 million in a Series B funding round. The investment was led by Camber Partners, with participation from Endeavor Catalyst and existing investors. This latest funding follows a $7 million Series A round in 2022.
The company, headquartered in Kuala Lumpur, reported $35 million in annual recurring revenue (ARR), demonstrating a significant 169% year-over-year growth and maintaining a 30% profit margin. Respond.io's platform assists mid- to large-sized B2C businesses in driving revenue through customer interactions across various messaging channels, including WhatsApp, Instagram, TikTok, and others. It leverages AI agents to automate high volumes of customer inquiries, qualify leads, and facilitate sales without direct human intervention.
Co-founder and CEO Gerardo Salandra, who previously worked at IBM and Google, founded Respond.io in Hong Kong in 2017 with Hassan Ahmed (CTO) and Iaroslav Kudritskiy (COO). The team relocated the business to Malaysia two years later. Salandra highlighted that the company's pricing model, based on conversation volume rather than per-seat charges, allows it to benefit from increased AI usage. He also noted that traditional platforms often treat messaging as an afterthought, while Respond.io's core focus on messaging creates a beneficial 'data flywheel' effect, improving AI capabilities with more data.
The newly acquired capital will be allocated towards hiring, organic growth initiatives, and strategic acquisitions. Respond.io is particularly interested in acquiring bolt-on technologies and teams in key markets like Europe and North America to accelerate its expansion. Currently, APAC, Latin America, and the Middle East/Africa each contribute about 30%, 30%, and 20% of revenue, respectively, with North America and Western Europe making up the remaining 20%. Salandra anticipates these Western regions will become the largest revenue segments within two to three years.
Despite the substantial funding, Salandra emphasized a disciplined approach to growth, stating the company does not aim for 'growth at all costs.' The ultimate goal for Respond.io is to achieve an IPO, with Salandra expressing a desire to 'ring the bell at Nasdaq.'