Pypestream raises $15M for its customer messaging platform

Pypestream is announcing that it has raised $15 million in Series A funding.

When the startup launched more than a year ago, founder and CEO Richard Smullen was pitching text messaging as the best way for customers to communicate with businesses — specifically, through the Pypestream app, where businesses can create their own accounts with a variety of different “pypes” to handle different types of communication.

Since then, Pypestream has expanded to offer messaging capabilities in businesses’ own apps and elsewhere. This goes beyond just sending text and images — users can also make payments, schedule appointments and send files directly from the messaging window.

Of course, we’ve recently seen tremendous hype around chatbots, particularly on Facebook, but Smullen argued that we won’t all start interacting with Facebook chatbots anytime soon.

“Brands thought, or agencies think, that people actually want to have general conversations with businesses and brands that aren’t specific to utility or aren’t specific to a need,” Smullen said. “Just as a consumer, I don’t need to have a general conversation with Nike — but if my sneakers are broken, then my conversation with Nike is very necessary.”

That’s why Pypestream has focused on using artificial intelligence and machine learning to automate the types of things that businesses and brands were already offering through call centers and other customer service channels. AI and machine learning are terms that get thrown around a lot — Smullen acknowledged that Pypestream didn’t need “to go all the way down the road of deep learning like Watson or Cortana,” but he said the system is smart enough to handle most tasks without human involvement.

“We try to automate as much of the repetitive inbound queries as possible,” Smullen said. “In most of the cases, it’s 100 percent automated resolution … Oftentimes, where the machine can’t bring it to the final resolution, we push the conversation to a human and the human will complete the resolution. Our automation system learns what the human did, so the next time it can do it without the human.”

Pypestream customers include Insurance Thought Leadership, Lynx Services and Discovery Health. Smullen said the company has also won contracts with the federal government, though it hasn’t announced the deals yet.

The company previously raised $2 million in seed funding. The Series A was led by Rick Braddock, former CEO of Priceline and former COO of Citibank, with participation from The Chatterjee Group and what Pypestream says is “a large, well-known global hedge fund.” Braddock will also serve as Pypestream’s executive chairman.