Contact Center Software Startup Talkdesk Raises $230 Million

San Francisco-based Talkdesk also hired its first chief financial officer,

Sydney Carey,

who had been CFO at Sumo Logic Inc., a cloud-based data and analytics company.

Talkdesk plans to devote the new funding to purposes including research and development and adding executives and other staff, said Chief Executive Tiago Paiva.

“It is really to be able to spend more time with customers, build more products, and also make sure we have the team ready to support them internationally,” Mr. Paiva said.

Talkdesk is part of a growing industry called contact-center-as-a-service, in which companies apply artificial intelligence and machine learning to enhance clients’ customer service and customer experience. Such cloud-based contact center software also makes it easier for call-center agents to work from anywhere, as opposed to monitoring calls physically on a company’s data and communication network in onsite offices.

The contact-center-as-a-service industry is expected to grow to $17.9 billion in revenue by 2024 from an estimated $10.5 billion in 2021, according to research firm

Gartner Inc.

Fifty-six percent of customer service agents will work on these cloud-based systems in 2024, with the remaining continuing to work in physical contact centers, Gartner said.

Many companies are moving toward cloud-based solutions to handle customer service inquiries, courted by vendors that are competing to offer new features.

Amazon.com Inc.,

for example, in December announced five new tools for its cloud-based contact center product, including one that uses artificial intelligence to help customer service agents answer questions almost instantly.

Providers are also bulking up to compete for clients. Videoconferencing services provider

Zoom Video Communications Inc.

in July acquired

Five9 Inc.,

another cloud-based customer service software, for $14.7 billion.

The sector’s growth will take about two decades to reach its potential, but has been accelerated in part by the shutdown of physical call centers during the pandemic, said Pri Rathnayake, senior director analyst at Gartner.

“The market has come to see the cloud-based contact centers more favorably, because it was tested under very trying circumstances,”  Mr. Rathnayake said. “And now more, larger contact centers are beginning to see this as a viable way of utilizing the technology,” rather than having to run their own software.

Talkdesk said more than 1,800 companies use its services, including insurance company

Lemonade Inc.,

food service distributor Sysco Corp. and pet-store operator Petco Health and Wellness Co.

Write to Ann-Marie Alcántara at [email protected]