- Software-as-a-service startup Conversica has netted $20 million in Series D funding from private equity investor Hollyport Capital.
- Conversica, which provides AI-powered virtual assistants, plans to use the funds to take advantage of the tailwinds from COVID-19 and expand its offering to mid-market and enterprise-size businesses.
- “Raising this Series D for us means continuing the investing in our sales and marketing for the most part, so that we can keep that 40% growth,” says CEO Jim Kaskade, adding that the investment is part of a five-year plan for an IPO.
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Software-as-a-service startup Conversica just raised a $20 million Series D round led by Hollyport Capital, bringing its total funding from institutional investors to $89 million.
The US-based startup provides AI-powered virtual assistants, with the aim of helping businesses complement their existing workforce and automating functions such as sales, marketing, and finance.
After a period of heavy investment in its tech hit profitability, Conversica said it was on track to return to a profitable growth path pre-COVID. The company says the pandemic has provided something of a boost as businesses look to streamline operations and take advantage of the shift to digital, accelerating revenue growth.
Conversica said it experienced a 20% increase over its pre-COVID peak in the amount of revenue that it helped its clients to line up since the start of the pandemic.
The startup has experienced 40% growth year-on-year since around 2014, says CEO Jim Kaskade, adding that the latest injection of capital will keep the startup on this growth path.
“Raising this Series D for us means continuing investing in our sales and marketing for the most part, so that we can keep that 40% growth,” he says. “Our growth capital is moving us now into a strategy where we want to invest … in profitable growth.”
The round will help Conversica to diversify its revenue streams beyond its current offering, which is focused on small businesses, to mid-market and enterprise-size companies as part of a five-year plan for an IPO.
“I don’t see a strong IPO window re-emerging [in] timing for us until our targeted 2024 timeframe,” says Kaskade. “[But], I don’t suspect we’ll need more growth capital. I think the flywheel is going to be pretty strong coming into 2021.”
Conversica will use the raise to build out the backbone of its intelligent virtual assistant technology and to scale up investment in sales and marketing.
It also plans to use the money to open up its platforms to developers so that they can customize the tech and expand its offering to include chat functions.
Conversica is also looking to grow through acquisitions and is working with global M&A and advisory firm Macquarie Capital to identify emerging players that can expand its offering to new markets, such as e-commerce, and locations.