Decagon co-founders Jesse Chan and Ashwin Sreenivas have more in common than just their company: They both studied computer science, married young, and founded companies before Decagon. “We started working on some things together,” says Chan, the startup's CEO. “It worked, so we kept working together.”
Founded in July 2023, Decagon uses generative AI to automate customer support for enterprise customers. The company has emerged from stealth and raised $35 million in seed and Series A funding. Accel led the company's $30 million Series A with participation from Andreessen Horowitz, A*, and Elad Gil. A16z led the company's $5 million seed round. Decagon also counts Box CEO Aaron Levie and Airtable CEO Howie Liu as angel investors.
“We talked to a lot of big enterprises about different use cases,” Chan said, “but to be honest, we kept relying on our customer teams.”
Given rising customer expectations and an increasingly competitive marketplace, customer support is an area where we can expect change.”[The best companies] “Understand that customer service is not a cost center, but a long-term revenue source and driver of customer retention,” A16z investment partners Kimberly Tan and Jeff Silverstein said in a blog post about their investment in Decagon.
Large enterprises build in-house support teams or, more commonly, outsource the function. Companies like Zendesk and Freshdesk make support teams more efficient by helping them create, manage, and resolve customer tickets. Recently, a number of AI support tools have emerged that complement or completely replace customer support functions. For example, other startups like Intercom and Forethought offer AI-based chatbot solutions that automatically resolve customer tickets.
Chatbots typically respond to customer inquiries using decision trees of programmed responses, but Decagon is looking to do more than that. The company aims to provide human-like customer support with its AI agents using large-scale language models fine-tuned by third parties. For each task, the platform tests and selects the best model. The new generation of AI support applications are “LLM models working together to determine what needs to be done,” Zhang says. “And that includes taking action.”
Decagon's AI agents incorporate customer workflows and data sources, such as brand guidelines and compliance requirements. This allows them to handle a wider range of support tasks, such as postponing shipments, filing bug reports, and handling refund requests. “Before, no one had tackled this because it wasn't possible,” Zhang says. “But now generative models make a lot of those things possible.”
Decagon also offers AI-powered analytics to spot trends and suggest operational improvements.The company's vision is to help businesses transform their approach to customer support from reactive to proactive.
“We were able to quickly identify themes in our customer experience, pinpoint outliers, and leverage more efficient workflow processes,” Thatcher Foster, vice president of client solutions at Built, said in a press release.
In addition to Bilt, the company boasts clients including Eventbrite, Substack, ClassPass, Vanta and Rippling. Decagon helps its clients improve efficiency, reduce costs and increase customer satisfaction, Zhang said. Customers are charged a yearly fee for a set number of conversations, with additional fees for anything over that. Decagon has “rapidly reached seven-figure ARR,” Zhang said.
“Our goal is to build the most human solution,” Zhang said, a point his co-founders agree on.
Check out the 10-slide presentation deck that Decagon used to raise $35 million.
