Parloa raises $21M to add a little automation to contact centers


It is estimated that more than $400 billion is spent on running customer contact centers worldwide. In recent years, contact centers have embraced AI and automation to reduce costs; According to research from Harris Poll, 46 percent of customer interactions will be automated by 2021.

That’s good news for vendors selling contact center automation software. VCs believe that’s the case judging by recent investment reforms. Startups including Invoca, Replicant, PolyAI and have raised hundreds of millions of dollars from backers in the past year alone, demonstrating the cutting edge of labor-saving customer service technology.

Another winner in the contact center automation boom is Parloa, a German-based enterprise software provider that combines conversational AI tech and low-code tools to help companies ease the burden on their contact center staff (or so the sales pitch goes). Parloa today announced that it has raised €20 million (~$21.67 million) in Series A funding led by EQT Ventures, with participation from Newon and Cenovo.

The fresh cash, which brings Parloan’s total to 25 million euros (~$27.09 million), will open up customer acquisition efforts, a US office and product R&D.

“AI is now waiting in the wings to disrupt the multibillion-dollar customer service market,” co-founder and CEO Malte Kosub told TechCrunch in an email interview. “The situation in customer service is the same across Europe, the Middle East and Africa and the Americas: it’s not a good customer experience. So the pace of AI adoption in customer service will be similar in those areas.”

Parloa started as an internal effort at Future of Voice, a conversational AI agency Cosub started in 2017 with Stefan Ostwald. Kosub and Ostwald built a low-code tool to develop “multi-channel voice experiences” (eg, Alexa skills, phone bots) for Future of Voice customers, which they code-named Parloa. In the year In 2020, Kosub and Ostwald sold Future Voice and hired employees who had been working on Parloa to independently measure the software.

Parloa offers a patchwork of applications and services that enable contact center automation flows when combined with low-code drag-and-drop dashboards. For example, Parloa’s speech-to-text module — powered by Microsoft Cognitive Services, a suite of Microsoft API-based AI services — can combine with Parloa’s natural language understanding models to create a telephone conversation tree. Or Parloa’s integration with third-party text generation models, including OpenAI’s recently released GPT-4, can be linked to the aforementioned speech-to-text module to answer commonly asked customer questions and complaints.

Parloa integrates various modules and services to help automate contact centers. Image Credits: Talk about it

To put it more concretely, a typical company might use Parloa’s tools to create a phone answering bot that can handle what a customer calls (such as changing their billing address) and respond to their questions in natural language. Or, customer service can use Parloa’s translation tools to enable its agents to communicate with customers in different languages.

Parloa’s approach isn’t exactly new — many contact center platforms offer the same setup — but the startup says its platform is superior in some ways from a technical perspective. For example, Parloa says its AI tools, apps and modules reduce typos and other “unwanted conversational patterns” during calls and continue listening during natural pauses in conversations.

“The pandemic has been a unique driver for the increased demands on digital customer service, which we as Parloa are helping to automate,” said Kosub. “Customer service is as old as business. So we are not creating a new market environment or focusing on small sub-segments, but helping an established multi-billion market with innovative technology.

Kosub won’t say exactly how many clients Parloa currently has, save for a few big names like Decathlon and the German Red Cross. When asked about macroeconomic headwinds such as the collapse of Silicon Valley Bank, he argued that 71% of reps had considered leaving their jobs in the past six months, arguing that it represents one of the reasons why the contact center automation market continues to grow. Study into Salesforce.

“Companies must deal with shrinking agency supply, agent shortages and job inattention – much of an agent’s time is spent on repetitive tasks like verification that can be done by AI,” Kosub said.

One could argue that agent turnover is eliminated by higher wages and better benefits as opposed to automation. Among the common complaints raised by workers in the industry are high production demands and lack of training; In the year In 2021, call center workers at healthcare giant Cigna went so far as to circulate a petition demanding better working conditions.

Investments in automation are an easy sell, especially in a sluggish economy. Parlo’s biggest challenge is not getting new customers, but standing out in a crowded field. Kosub says luckily I am there.

“We were not affected by the cold or the epidemic. The demand for customer service is growing and so is the pressure to be more efficient.” “Organization-wise, we grew from 30 employees with seed funding to over 100 in less than 12 months, with new competitors from Google, Salesforce, SAP, TeamViewer and Celonis.”


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