Businesses and their customers have migrated to messaging apps, but many enterprises still struggle to manage conversations across WhatsApp, Instagram, TikTok, and other channels at scale. Respond.io, a customer conversation management platform headquartered in Kuala Lumpur, Malaysia, has raised $62.5 million in a Series B funding round to address this gap by combining multi-channel messaging with AI agents that can automatically handle inquiries, qualify leads, and close sales.
Funding and Growth Metrics
The round was led by Camber Partners, with participation from Endeavor Catalyst and existing investors, according to a TechCrunch report. Respond.io last raised a $7 million Series A in 2022. The startup now boasts $35 million in annual recurring revenue (ARR), growing 169% year-over-year, and a 30% profit margin. The company is processing 2 billion messages per quarter.
The Platform and Its AI Advantage
Founded in 2017 in Hong Kong by Gerardo Salandra (CEO), Hassan Ahmed (CTO), and Iaroslav Kudritskiy (COO), the team relocated the business to Malaysia two years later. The platform serves mid- to large-sized B2C companies, focusing on "high-consideration" industries such as healthcare, automotive, retail, education, and travel, where customers require a conversation before purchasing. Salandra, who previously worked at IBM and Google and later at fitness tracker Runtastic (acquired by Adidas in 2015), noted the sweet spot is companies with 200 to 10,000 employees.
Unlike enterprise software competitors that charge per seat, Respond.io charges based on the volume of customer conversations. This pricing model means it does not matter whether a human or an AI agent handles the inquiry. "When fewer humans use your product, they make less money," Salandra told TechCrunch, contrasting with incumbents that built their platforms around email and phone calls and added messaging as an afterthought.
The company's AI agents leverage the vast amount of message data—2 billion per quarter—to improve accuracy through a "data flywheel": more messages lead to better AI, which attracts more customers, generating even more messages. This head start makes it difficult for newer entrants, according to Salandra.
Geographic Revenue Breakdown
| Region | Share of Revenue |
|---|---|
| APAC | 30% |
| Latin America | 30% |
| Middle East | 20% |
| Rest of World | 20% |
Acquisition Strategy
With the new capital, Respond.io plans to pursue hiring, organic growth, and acquisitions. CEO Salandra has two types of targets: bolt-on technology that fits into the existing ecosystem, and established teams with strong customer bases in strategic markets like Europe and North America. "Imagine how many months I can save if I find the right company that maybe already has the clients and the team," he said, estimating a savings of six months to a year per acquisition. He confirmed the company is already in talks with a couple of potential targets.
Competitive Position
Salandra dismissed the threat from general-purpose AI tools like ChatGPT, citing the company's strong foothold and unique pricing model. "If I just look at the numbers, every day that AI becomes more prominent, we grow faster," he stated. The platform's focus on messaging-native interactions—rather than email or phone—gives it a distinct advantage over incumbents in North America and Europe. The $62.5 million raised will help accelerate its expansion into those regions, both organically and through acquisitions.
Sources:
