Parloa Secures $21M for Contact Center Automation.

Contact centers around the world spend over $400 billion annually to run their operations. In recent years, these centers have turned to AI and automation to cut costs. According to research from The Harris Poll, 46% of customer interactions were already automated as of 2021. This trend has led to an increase in investment in contact center automation software. Startups such as Invoca, Replicant, PolyAI, and have raised hundreds of millions of dollars from backers over the past year alone.

Parloa, a German-based enterprise software provider, is one of the winners in the contact center automation boom. The company uses a combination of conversational AI tech and low-code tools to help companies lighten the load on their contact center employees. Parloa recently announced that it raised €20 million (~$21.67 million) in a Series A funding round led by EQT Ventures, with participation from Newion and Senovo. The fresh cash, which brings Parloa’s total raised to €25 million (~$27.09 million), will be put toward customer acquisition efforts, opening a U.S. office, and product R&D.

Parloa began as an internal effort at Future of Voice, a conversational AI agency that co-founder and CEO Malte Kosub co-launched with Stefan Ostwald in 2017. Kosub and Ostwald built a low-code tool for developing “multi-channel voice experiences” (e.g. Alexa skills, phone bots) for Future of Voice’s clients, which they code-named Parloa. In 2020, Kosub and Ostwald sold Future of Voice and recruited the employees that had been working on Parloa to help scale the software independently.

Parloa offers a patchwork of apps and services that, when meshed together via low-code drag-and-drop dashboards, can power contact center automation flows. For instance, Parloa’s speech-to-text module can be combined with Parloa’s natural language understanding models to create a phone dialogue tree. Or Parloa’s integrations with third-party text-generating models, including OpenAI’s recently released GPT-4, could be connected with the aforementioned speech-to-text module to answer commonly-asked customer questions and complaints.

Parloa’s approach isn’t exactly novel, but the startup claims that its platform is superior in some ways from a technical standpoint. For instance, Parloa claims its AI tools, apps, and modules can reduce spelling errors and other “unwanted conversational patterns” during calls and continue listening during natural pauses in conversations.

Kosub believes that AI is waiting in the wings to disrupt the multi-billion customer service market for good. “The status quo in customer service is the same across Europe, Middle East, and Africa and the U.S.: not a good customer experience. So also the speed of the AI adoption in customer service will be the same in those areas,” he said.

Parloa’s biggest challenge likely won’t be finding new customers, but standing out in a crowded field. However, Kosub says he’s up to it. “We weren’t affected by the slowdown or the pandemic at all. Customer service demand is growing, and the pressure to be more efficient is increasing as well,” he said. “Corporate-wise, we grew from 30 employees during our seed funding to more than 100 in less than 12 months, with new joiners from Google, Salesforce, SAP, TeamViewer, and Celonis.”