Forethought nabs $65M Series C to improve customer service with AI
In 2018, Forethought, a startup looking to put AI to work across customer service, won the TechCrunch Disrupt Battlefield and soon after landed a $9 million Series A. Well, three years later that company just landed a $65 million Series C, and it’s rolling along.
Steadfast Capital led the latest round with participation from existing investor NEA and new investors Sound Ventures and K9 Ventures along with individual investors including actress Gwyneth Paltrow and former NBA player Baron Davis. The company has now raised $92 million.
Company CEO and co-founder Deon Nicholas says that like many companies, his benefited as the pandemic forced companies to digitally transform faster than they might have, and this was particularly true in the customer service market where Forethought’s products are aimed.
“This explosion in digital transformation, as well as I would say just the loss of human productivity [during the early part of the pandemic] led to a lot of businesses to turn to artificial intelligence, and obviously to Forethought, to help with this digital transformation,” Nicholas told me.
He says that the new money should help take advantage of the rapid growth the company has been experiencing. In the last year, they have seen ARR grow 5x, while tripling the number of customers.
The company now has three main customer service products. First it has the Assist, which helps CSA’s find the information they need to solve a problem quickly, Solve is a chatbot to help answer simple questions and route the more complex ones to human CSAs and Triage uses AI to route the call to the most knowledgeable CSA to get the call answered most efficiently.
He says the goal is to help humans perform better using AI. “One of the things that we’ve focused on is being a human-centered AI platform. And that’s what has really come through…with our mission, and really our mission is to unlock human potential through artificial intelligence,” he said.
As a Black co-founder Nicholas is keenly aware of the numbers out there when it comes to funding for Black founders. In fact, in the first half of 2021, just 1.2 percent of venture money went to startups with a Black founder, according to data from Crunchbase. And that was a big improvement over last year.
“In many ways, investors are making these gut decisions that they think are based on the company or the metrics or whatever, but oftentimes it’s based on their [idea] of what they think a founder should look like. And often if you don’t fit that mold, whether that’s because of your appearance, your skin color or your particular background, it can be tough because you’re battling these implicit judgment biases,” he said.
One of the outcomes he hopes for from his startup’s journey, is that his story inspires young people of color looking to start a company. “One of my hopes is that my personal story becomes one that can help the next generation of entrepreneurs see that there are examples of that,” he said.
Today, the company is up to 145 employees and with the new cash, Nicholas expects to reach around 250 by the end of next year. He recognizes the need for diversity, especially in a business that caters to customer service agents.
“We care about building an organization that is not only representative, but as you know, more diverse organizations lead to better decision making and just better products. Not to mention that when we think about the industry we serve, customer service…it’s global. It’s broad,” he said.
“So for the people we serve, it’s very important that the people building the technology, as well AI and things like that, it’s very important that we understand and are representative of the people we serve,” he said.
The company could move beyond customer service over time, with Nicholas saying the company is looking at adjacent areas like sales. With $65 million, the company can afford to put some R&D resources into other areas, while still contributing to AI research and refining and building on the current customer service focus.