Observe.AI Secures $125M in Series C Financing

Observe.AI Secures $125M in Series C Financing

Deal Financials :

Implied Enterprise Value (EV): Undisclosed

Transaction Overview

  • On April 12, 2022, Z21 Labs, Inc. doing business as Observe.AI, received an investment of $125M in Series C funding from SoftBank Investment Advisers, Zoom Video Communications, and others
  • Prior to this investment, Observe AI had raised $88 million in funding since its inception
  • Observe AI is an intelligent workforce platform that implements an AI engine to transcribe and provide insight into agent-customer conversations
  • This investment will empower Observe AI to accelerate growth via acquisitions to scale its platform and expand the use cases of their product

Observe.AI’s Solution

  • Artificial intelligence (AI) is the future of enterprise software, with the market size of AI software expected to reach $126B by 2025. The rate of proliferation of data in the new digital age is far outpacing human abilities to absorb, interpret and execute complex decisions using that data and the importance of AI will only continue to grow
  • Problems can be solved better and more efficiently with AI, so there is a real application opportunity for Observe.AI within the voice customer service space to address inefficiencies and pain points within existing customer support solutions
  • Most support teams monitor just a small fraction of calls and lack in-depth interaction analytics to provide effective agent coaching and overall customer service improvements
  • Observe.AI employs advanced speech, natural language processing (NLP) and deep learning technologies to analyze 100% of customer conversations, while also automating some stages of the QA and compliance tracking processes

TBP’s Analysis of Momentum in Call Center Automation Software

  • In 2021, Observe AI expanded its enterprise customer base by 40% which resulted in a 150% increase in annual recurring revenue for the company
  • On August 31, 2021, Observe AI acquired conversational analytics company ScopeAI; this transaction indicated that Observe AI would expand its offerings in omnichannel conversation intelligence
  • Companies are increasingly seeking methods to improve upon customer experience as well as gathering actionable insights to drive sales and customer retention
  • The global contact center market size is anticipated to grow to over from over $300B to nearly $500B over the next five years (Statista)
  • Global adoption of work-from-home and other remote working models has resulted in companies turning to AI to bridge the resulting service gaps
  • Large companies such as Amazon and Google have launched AI-powered contact center messaging products and virtual customer service software as such forms of technology have improved

True Blue Partners’ Investment in Observe.AI

  • True Blue Partners was a co-investor in Observe.AI as part of its Series A funding
About True Blue Partners
True Blue Partners is a boutique M&A advisory firm that serves lower mid-market enterprise software, service and solutions companies. It brings the rigorous strategic and financial perspective of bulge bracket firms with a company building approach and a steadfast partnership that only an independent boutique firm can deliver. For more information please visit www.truebluepartners.com or email us at info@truebluepartners.com.

TBP is an investor in Observe.AI