The company was looking for $2 million, but garnered so much interest from investors it ended up landing $3 million, according to DigitalGenius chief strategy officer Mikhail Naumov.
The round was led by Metamorphic Ventures. Lerer-Hippeau Ventures, Lowercase Capital, RRE Ventures, Lumia Capital and a strategic angel it did not name also participated.
Prior to landing this money, the company had bootstrapped to 20 employees without any funding except a $250,000 convertible note.
DigitalGenius is building an automated customer service platform driven by artificial intelligence (AI) and natural language processing (NLP). As we described in the company’s Battlefield post in May, “The tool carries on a human-like conversation with people via SMS. As you ask questions, the system walks you through the sales funnel to the point, in the case of a car, it could direct you to a dealer in your area.”
That kind of technology has captured the imagination of early customers like BMW and Unilever, and in turn working with customers with that kind of brand clout earned the attention of investors.
“We invested in DigitalGenius because they’re the first company we’ve met that has been able to leverage AI and NLP in order to solve what is a major B2B pain point, customer service. They’ve already worked with and continue to work with major companies,” David Hirsch, managing director at lead funder Metamorphic Ventures said.
What’s more, he believes this kind of technology could disrupt customer service call centers by reducing costs and increasing customer satisfaction.
Naumov sees the market for his company’s services heating up, but he and 22-year-old company founder Dmitry Aksenov were looking for more than just money to grow faster. They were also seeking some guidance on how to deal with that growth. The two young executives have the beginnings of a great idea, but they lack pure business experience.
“We are certainly counting on investors to provide infrastructure support, [advice] on hiring the right talent, getting access to more clients and help designing the overall business strategy,” he said.
The company, which has offices in London and New York City hopes to add 10 more employees in the next year.
“A significant portion of the funding will be devoted toward bringing talent on board. We are hiring aggressively right now, and also plan to use this round of funding to [further] productize our offering,” Naumov said.
The vast majority of the hiring, perhaps 80 percent will be engineering talent with the rest devoted to assorted business roles.
Naumov had trouble describing the round because it’s not quite seed stage (even though some of the investors specialize in seed investing) and not quite Series A. This confusion of labels is partly due to the fact the company has customers and revenue (along with 20 employees), so it’s not exactly a seed company. He wasn’t sure what to call it.
Regardless of the label, the money gives the company an opportunity to take the next growth steps.
“We have a focused approach toward building this company and we understand what it’s going to take. We have the right investors to [help] solve a big problem and try to move the industry.”
Now they have to take that money and run with it to reach that vision.