Helpshift raises $23M led by Microsoft, Salesforce for a chat tool that helps with CRM in apps

As more of our day-to-day services make the shift to digital platforms, a startup that has built a customer care tool to help us through some of the pain points in mobile apps has closed a Series B round of funding. Helpshift, which provides an SDK to software companies to build a chat bridge between users of their mobile apps and their customer service teams, has raised $23 million.

Helpshift will use the funding to continue building out its mobile app chat business — which is now in use across some 1.3 billion unique devices, by virtue of deals with popular apps like games from Supercell. But while messaging is indeed the killer app for Helpshift (as it is for so many others, who are also looking to disrupt older mediums like email), the startup is also expanding into new areas.

These include more analytics services based on anonymised, recurring themes in the chats; a move into voice services; and a version for desktop apps — according to Helpshift’s CEO and co-founder, Abinash Tripathy. Tripathy spoke to TechCrunch from India, where the SF-based company bases its whole product team (with sales and business development in California).

The investment is notable because it adds two new, strategic investors — Microsoft (in one of the first investments made out of its new Microsoft Ventures investment arm) and Salesforce. Previous investors Intel Capital (which is still investing, despite the restructure), Nexus Venture Partners, True Ventures and Visionnaire Ventures also participated, bringing the total raised by Helpshift to $36.2 million.

Tripathy said that the company is not disclosing its valuation. The company, which offers a very basic free service for developers just starting out, otherwise charges starting at $185/month and counts “thousands” of companies as paying customers, but is not yet profitable.

The CRM market is a very crowded one. In 2015, CRM software alone was worth $26.3 billion, according to Gartner, and Tripathy tells us that when you account for the outsourcing and other services around the use of that software, the annual investment in CRM is between $300 billion and $350 billion.

Salesforce and Microsoft are two of the very biggest CRM players already alongside many others in what is a very fragmented space, with new entrants like Twitter as well as companies in adjacent areas like WalkMe also raising a lot of money. But interestingly Tripathy says that Helpshift’s product — and its focus specifically on a chat experience within a company’s app — is unlike anything offered by the two, or others, for that matter.

“Zendesk announced a competitive product [Embeddables] which competes with Helpshift but they don’t know how to optimise the experience for mobile,” he said. This means that both Microsoft and Salesforce were already key partners for Helpshift before they invested, and now those partnerships are set to become deeper.

At Microsoft, for example, the company has built an SDK that works on Windows apps, and it uses Microsoft’s Azure cloud to run its services. Coming soon, Helpshift will be launching a version of its product specifically for Outlook on desktop, which will add another 1 billion devices to the Helpshift network, said Tripathy.

“There is a lot of strategic alignment,” Tripathy said.

“Helpshift has pioneered the messaging-based approach to customer service, making real-time support easy for users, and streamlined for businesses,” Nagraj Kashyap, corporate vice president, Microsoft Ventures, told TechCrunch. “Helpshift has been a great partner for Microsoft and our investment today represents our shared value of providing the seamless experience customers want at their fingertips.”

Interestingly, that Microsoft cooperation will not extend to using Skype for the upcoming voice service. “Skype does have APIs but don’t have to use them. WebRTC will allow us to originate and terminate inside specific sites and apps,” he said.

Apart from the technicalities of which voice protocol to use, the move into voice will have other challenges that the company is still working out, he added. These include how to bypass the very annoying fact that many phone-based customer-care services involve waiting in long queues and dealing with flaky and frustrating IVR services to help sift users ahead of the live call. He says that the Amazon model of voice-based customer care services, where you essentially take a number and get called back, is likely to be the basis of how its voice feature will also work.