It is estimated that more than $400 billion is spent every year to run customer contact centers around the world. To reduce costs, in recent years contact centers have embraced AI and automation; a study by The Harris Poll indicates that 46% of customer interactions were already automated in 2021.

This is good news for contact center automation software vendors. Venture capitalists believe that is certainly the case, judging by the recent upturn in investment. Startups such as Invoca, Replicant, PolyAI and Observe.ai have raised hundreds of millions of dollars from backers in the past year alone, reflecting optimistic views of customer service technology that saves work.

Another winner of the contact center automation boom is Parloa, a German-based enterprise software provider that uses a combination of conversational AI technology and low-code tools to help businesses alleviate the employee charge of their contact center (or so the sales pitch goes). Parloa announced today that it has raised €20 million (~$21.67 million) in a Series A funding round led by EQT Ventures, with participation from Newion and Senovo.

The fresh money, which brings Parloa’s total raised to 25 million euros (~$27.09 million), will be spent on customer acquisition efforts, opening a U.S. office and product R&D.

“AI is waiting in the wings right now to permanently disrupt the multi-billion customer service market,” co-founder and CEO Malte Kosub told TechCrunch in an email interview. “The status quo of customer service is the same in Europe, the Middle East, Africa and the United States: not a good customer experience. Likewise, the speed of adoption of AI in customer service will be the same in these areas. »

Parloa started as an internal effort at Future of Voice, a conversational AI agency that Kosub co-launched with Stefan Ostwald in 2017. Kosub and Ostwald built a low-code tool to develop “multi-channel voice experiences” ( eg, Alexa skills, phone bots) for Future of Voice customers, which they named Parloa. In 2020, Kosub and Ostwald sold Future of Voice and recruited the employees who worked on Parloa to help evolve the software independently.

Parloa offers a patchwork of apps and services that, when interconnected through low-code, drag-and-drop dashboards, can power contact center automation workflows. For example, Parloa’s text-to-speech module – powered by Microsoft Cognitive Services, Microsoft’s set of API-based AI services – can be combined with Parloa’s natural language understanding models to create a tree telephone conversation. Or Parloa’s integrations with third-party text generation models, including OpenAI’s recently released GPT-4, could plug into the aforementioned text-to-speech module to address common customer questions and complaints.

To put it in more concrete terms, a typical business can use Parloa’s tools to create an answering machine bot that can automatically understand why a customer is calling (eg changing their billing address) and answer their questions in natural language. . Or he can use Parloa’s translation tools to allow his customer service agents to speak with customers in multiple languages.

Parloa’s approach isn’t entirely new — many contact center platforms offer the same kind of setup — but the startup says its platform is superior in some ways from a point of view. technical. For example, Parloa claims its AI tools, apps and modules can reduce misspellings and other “unwanted conversation patterns” during calls and continue listening during natural pauses in conversations.

“The pandemic has been a particular driver of increased digital customer service requests, which we as Parloa are helping to automate,” Kosub said. “Customer service is as old as the business itself, so we are not inventing a new market environment or focusing on small sub-segments, but helping an established multi-billion market with innovative technology .

Kosub wouldn’t say exactly how many customers Parloa currently has, except for a few big names like Decathlon and the German Red Cross. Asked about macroeconomic headwinds such as the Silicon Valley bank collapse, he countered with a statistic he says illustrates one of the reasons the contact center automation market will continue to grow. grow: 71% of agents thought they would quit their job in the last six months, according to a Salesforce study.

“Companies are struggling with dwindling agent availability, agent shortages, and unattractive work – much of an agent’s time is spent on repetitive tasks, like authentication, that could be done by AI,” Kosub said.

One could argue that avoiding agent turnover with higher salaries and better benefits is better than automation. Common complaints from workers in the industry include high production demands and lack of training; in 2021, call center workers at healthcare giant Cigna went so far as to circulate a petition calling for better working conditions.

Investments in automation are of course an easier sell, especially in a down economy. Parloa’s biggest challenge probably won’t be finding new customers, but standing out in a crowded field. Kosub says he is up to it, thankfully.

“We haven’t been impacted by the downturn or the pandemic at all. The demand for customer service is increasing and the pressure to be more efficient is also increasing,” he said. “Business-wise, we’ve grown from 30 employees during our seed funding to over 100 in less than 12 months, with new hires from Google, Salesforce, SAP, TeamViewer and Celonis.”