Facebook acquires messaging marketing automation startup Kustomer

Facebook today announced it will acquire Kustomer, a New York-based customer relationship management startup, for an undisclosed amount. When the deal closes, Facebook says it will natively integrate Kustomer’s tools with its messaging platforms, including WhatsApp and Messenger, to allow businesses and partners to better manage their communications with users.

For most brands, guiding and tracking customers through every step of their journeys is of critical operational importance. According to a recent PricewaterhouseCoopers report, the number of companies investing in omnichannel experiences has jumped from 20% to 80%, and an Adobe study found that those with the strongest omnichannel customer engagement strategies enjoy 10% year-over-year growth on average and a 25% increase in close rates.

“We’ve witnessed this shift firsthand as every day more than 175 million people contact businesses via WhatsApp. This number is growing because messaging provides a better overall customer experience and drives sales for businesses,” Facebook VP of ads and business products Dan Levy and WhatsApp COO Matt Idema wrote in a blog post. “As businesses adjust to an evolving digital environment, they’re seeking solutions that place people at the center, especially when it comes to communication. Any business knows that when the phone rings, they need to answer it. Increasingly, texts and messages have become just as important as that phone call — and businesses need to adapt.”

AOL and Salesforce veterans Brad Birnbaum and Jeremy Suriel founded Kustomer in 2015, which went on to attract customers including Sweetgreen, Ring, Glossier, Rent the Runway, Away, and Glovo. The company’s platform let clients search, display, and report out-of-the-box on objects like “customers” and “companies,” with tweakable attributes such as orders, feedback scores, shipping, tracking, web events, and more. On the AI side of the equation, Kustomer offered a conversational assistant that collects customer information for human agents and auto-routes conversations.

Kustomer’s workflow and business logic engines supported the creation of conditional, multi-branch flows that enabled each step to use the output of any previous step and to trigger responses based on defined events from internal or third-party systems. From a dashboard, managers could view which agents are working in real time and launch customer satisfaction surveys (or view the results of recent surveys). The dashboard also exposed sentiment to provide a metric for overall customer service effectiveness, and it enabled admins to customize Kustomer’s self-service, customer-facing knowledge base with articles, tutorials, and rich media including videos, PDFs, and other formats.

Last year saw the launch of KustomerIQ, which allowed companies to train AI models to address their unique business needs. The models in question could automatically classify conversations and customer attributes, reading messages between customers and agents using natural language processing techniques.

Prior to the Facebook acquisition, Kustomer raised $173.5 million across six fundraising rounds. Earlier this morning, The Wall Street Journal reported that the deal announced today could value the startup at more than $1 billion.

Birnbaum, Suriel, and the rest of the Kustomer team will join Facebook once the transaction is approved. Facebook says that Kustomer businesses will continue to own the data that comes from interactions with their customers, but that it eventually expects to host Kustomer data on its infrastructure.

“Once the acquisition closes, we look forward to working closely with Facebook, where we will continue to serve our customers and work with our partners as part of the Facebook family,” Birnbaum wrote in a blog post. “With our complementary capabilities, we will be able to help more people benefit from customer service that is faster, richer and available whenever and however they need it — via phone, email, text, web chat or messaging. In particular, we look forward to enhancing the messaging experience which is one of the fastest growing ways for people and businesses to engage.”

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