Comcast, VCs Pour $56M Into Virtual-Assistant Firm Interactions
Here’s an interesting trend worth watching: investors are pumping money into a variety of technologies aimed at improving businesses’ customer service operations.
It’s not the sexiest of industries, perhaps, but we’ll all be thankful if these bets help smooth out what’s typically a frustrating and time-consuming experience for consumers.
What’s even more compelling is the diversity of these tech companies’ approaches. Take three examples in the Boston area:
—Cogito wants to help call center workers get better at their job. Its voice-analysis software is being used to coach workers on their interactions with customers and potentially reduce the high turnover rate at call centers. Cogito has raised $6.5 million over the last year to pursue that opportunity.
—GetHuman wants to shoulder the burden for consumers who have complaints. For a small fee, the startup’s employees will fight your customer service battles for you, with an assist from artificial intelligence-related software. GetHuman launched its on-demand service for the public in the spring.
—Interactions sits somewhere in the middle of those two approaches. The company uses speech recognition, natural language processing, and other artificial intelligence-related technologies to create smart virtual assistants that can handle many customer service requests—with some oversight from humans. The idea is to save businesses money, free up human customer service agents to devote more time to more complex tasks, and create a better experience for consumers.
Investors are betting big on Interactions. The Franklin, MA-based company said today it has raised $56 million in a round led by new investors Comcast Ventures, NewSpring Capital, and Revolution Growth, the Washington, DC-based fund whose partners include AOL co-founder Steve Case.
That brings 12-year-old Interactions’ total venture capital haul to $167 million, a spokeswoman says.
“We’ve been on quite a growth trajectory here in the last couple of years,” Interactions CEO Mike Iacobucci says. “Given that traction that we see in the market, this investment really allows us to continue that expansion.”
Interactions wouldn’t share specific figures, but it more than doubled its annual revenue in 2015, and it expects to grow its sales at least 50 percent this year. Its customers include Hyatt, Humana, EyeMed, and LifeLock. Interactions employs 320 people, about a third located in the Boston area, a spokeswoman says. The rest are spread between offices in Indianapolis; New York; New Providence, NJ; and Austin, TX.
The company’s growth fits with a few trends in the way businesses interact with consumers nowadays. Rather than relieving pressure on customer service departments, the advent of websites and mobile apps has increased the volume and complexity of customer service requests, says Interactions vice president of marketing Jane Price.
And even though existing automated systems, like phone trees, often leave customers banging their heads against the wall, that doesn’t necessarily mean they always want to speak to a human to solve the problem. “There’s a strong preference toward self-service applications to be able to get things done quicker,” Price says.
Interactions says its software creates a more conversational and intuitive virtual assistant that can communicate with customers across different formats, including phone calls, Web chats, and SMS messaging. Interactions’ applications, for example, can understand callers speaking in full sentences, or people using chat shorthand like “pls” in a text message.
“The principle of our design is we’re not building an application that’s trying to get you to speak in a different way,” Iacobucci says. “You speak freely, openly, and we’ll do the work in the background of understanding what you’re saying.”
There are limits to the software’s understanding, of course. Heavy accents and background noise, such as a dog barking or a car driving by, can trip up the virtual assistant on a phone call, Price says. That’s when a human would step in and interpret what the customer said for the software program, getting the conversation back on track. “They’re part of the tech in the background,” Price says. “They’re never directly interacting with the end user.”
This combination of humans and advanced software—which some call “human-assisted A.I.”—has grown more popular in recent months. Companies pushing related products and services include GetHuman, B12, Lola, Nuance Communications, and even Facebook, with its virtual assistant “M.”
But Interactions has been at this longer than most of those companies. Much of its technology was built in-house, but it also boosted its offerings through its 2014 acquisition of AT&T Watson. Not to be confused with IBM Watson, AT&T Watson was the speech recognition and natural language processing platform developed by AT&T’s in-house research and development lab. As part of the deal, an undisclosed number of AT&T Watson researchers and engineers joined Interactions, and AT&T received an undisclosed equity stake in Interactions.
That was a big get for Interactions, Iacobucci says. AT&T Watson’s technology is based on several decades of research, he says, and he called its team one of the “elite” in the industry.
Now, armed with a restocked war chest, Interactions plans to continue developing its technology, hiring more people, and signing up more customers. That includes a bigger push into international markets. Some of Interactions’ customers operate globally, but the company doesn’t currently serve any firms headquartered outside the U.S., Iacobucci says.
It remains to be seen whether, and when, virtual assistants will go mainstream. “In our world of customer care, the existing technologies and approaches have reached a point of diminishing return,” he says. “At the same time, there’s a tremendous concern and interest in changing and improving the customer experience. … We really push that agenda.”