Parloa, a conversational AI platform for customer service, raises $66M

Conversational AI platform Parloa has nabbed $66 million in a Series B round, a year after it raised $21 million from a swathe of European investors to propel its international growth.

The German company is focusing on the U.S. in particular, and last year opened an office in New York, too. It says this hub helped it sign up “several Fortune 200 companies” in the region. For the latest round, Parloa has secured Altimeter Capital as lead backer, a U.S.-based VC firm notable for its investments in the likes of Uber, Airbnb, Snowflake, Twilio and HubSpot.

AI and automation is not new in customer service, but with a new wave of large language models (LLMs) and generative AI infrastructure, truly smart “conversational” AI (i.e., not dumb chatbots) is again firmly in investors’ focus. Established players continue to raise substantial sums — Kore.ai, for example, closed a chunky $150 million round a few months ago from big-name backers such as Nvidia. Elsewhere, entrepreneur and former Salesforce CEO Bret Taylor, in February launched a new customer experience platform called Sierra that’s built around the concept of “AI agents,” and has raised more than $100 million from venture investors.

Parloa is well positioned to capitalize on the “AI with everything” hype that has hit fever pitch these past couple of years as companies seek new ways to improve efficiency through automation.

Founded in 2018, the startup has already secured high-profile customers such as European insurance giant Swiss Life and sporting goods retailer Decathlon, both of which use Parloa’s platform to automate customer communications, including emails and instant messaging.

However, “voice” is where co-founder and CEO Malte Kosub reckons Parloa stands out.

“Our strategy has always been centered around ‘voice first,’ the most critical and impactful facet of the customer experience,” Kosub told TechCrunch over email. “As a result, Parloa’s AI-based voice conversations sound more human than any other solution.”

Co-founder and CTO Stefan Ostwald says that AI has been a core part of Parloa’s DNA since its inception six years ago. The company uses a mix of proprietary and open source LLMs to train models for speech-to-text use cases.

“We’ve trained a variety of speech-to-text models on phone audio quality and customer service use cases. We’ve developed a custom telephony infrastructure to minimize latency — a key challenge in voice automation — as well as a proprietary LLM agent framework for customer service,” he said.

Parloa had previously raised around $25 million, the bulk of which arrived via its Series A round last year. Now with another $66 million in the bank, it’s well-financed to double down on both its European and U.S. growth. Kosub noted that the company has tripled its revenue in each of the past three years.

“We successfully entered the U.S. market in 2023. We’ve always had confidence in the excellence and competitiveness of our product, but the overwhelming and rapid success it achieved in the U.S. surpassed everyone’s expectations,” Kosub said.

Aside form lead investor Altimeter, Parloa’s Series B saw checks from EQT Ventures, Newion, Senovo, Mosaic Ventures and La Familia Growth. Today’s funding brings the company’s total capital raised to $98 million, following its $21 million Series A, which was led by EQT Ventures, in 2023.