A former Salesforce VP has raised 4 rounds of funding in 18 months for a startup called Kustomer. His model: Salesforce.

Business Insider Finance 1 week ago

Former Salesforce executive Brad Birnbaum thinks it's time to modernize customer relationship management software and that's exactly what he is looking to do with his latest company Kustomer. 

"We've modeled ourselves to become a modern Salesforce," Birnbaum told Business Insider. 

Birnbaum is a veteran of the customer relationship management software space. In 1995 he founded his first service company called eShare. At the time, the company was providing enterprise internet-based customer support, when not many were working in that space. Eshare provided services to companies like Microsoft, Dell, AOL and Sprint. 

Fast forward to 2009, he co-founded a customer service company called Assistly, and served as its CTO. The company offered an instant customer-service help desk hosted in the cloud and was focused on small businesses and startups. Two years later, in 2011, it was acquired by Salesforce for $50 million.

Salesforce eventually renamed Assistly as Desk.com and it came its product offering for small businesses inside of Salesforce's larger platform. Birnbaum worked at Salesforce for three years after as a VP of engineering. 

And now Birnbaum's looking to disrupt the market again. 

"I've spent my whole career in the customer service space, I've seen it evolve and I've seen that the world is looking for a modern solution. They are looking for something that knows everything about the customers," Birnbaum said.

Treat customers like people and not tickets

When Birnbaum started Kustomer in 2015, he said he saw an opportunity to do it better than legacy companies like Salesforce, Zendesk and Oracle. It's a cloud based customer service platform, not dissimilar to Salesforce. 

"We actually don't see it as a crowded space, we see it as a space with a lot of traditional products and it's really hard for them to modernize because they were built in a different generation ... so the opportunity is quite large." He adds that the market for customer service itself is growing rapidly so there is space for new players like Kustomer. 

He thinks customer service platforms now have to treat people like people and not tickets, and they have to leverage artificial intelligence and automation to automate some tasks customer service agents have to do, in order to more quickly solve customer's issues. 

Kustomer is hoping to be that modern offering. And the company is investing in that goal. It just raised $60 million in Series E funding, led by Coatue with current investors Tiger Global Management and Battery Ventures. It's the fourth time the company has raised funding in the last 18 months, taking in a total of $161 million from those four rounds and bringing the company's total funding to $173.5 million.

Kustomer offers customer service support across all types of platforms customers might be using to communicate and interact with brands. This includes phone, email, social media channels like Facebook, Twitter and WhatsApp. 

He said what makes Kustomer different is that in their platform, the conversation a customer is having with a business can span multiple channel types at once. For example, a customer can be using calling, texting and email to address a single issue in a continuous conversation, which Birnbaum said "no one else does" that way. 

Salesforce recently announced updates to its platform that focused on helping businesses get a "360-degree" view of their customers - ie. This means tracking customer's actions, preferences and habits across devices.

Birnbaum said he is looking to keep building and innovating on the platform Kustomer has built thus far. "As we progress we will build more apps on top of the platform and you might see us doing things like marketing and engagement over time as we continue to expand," Birnbaum said. "But right now we're very focused on customer service because it's such a huge opportunity and the current solutions are pretty ancient." 

The new funding will be used to work towards that growth by hiring more employees and expanding internationally. Birnbaum said some of Kustomer's customers are brands like Glossier, Ring, Sweetgreen, and Third Love. 

"We've modeled ourselves to become a modern Salesforce. As our platform continues to evolve and as our service application continues to broaden and as we start to launch additional applications on top of that platform you'll see that transformation occur," he said.


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