Malaysian AI-powered messaging app Respond.io raises $62.5 million, eyes acquisitions

In 2017, Respond.io set out to solve a simple problem: businesses couldn’t keep up with customers who had switched to messaging apps. Today, Respond, with its customer call management software, has become one of Malaysia’s technology success stories.

The Kuala Lumpur-based startup has raised a $62.5 million Series B round led by Camber Partners, with participation from Endeavor Catalyst and existing investors. It last raised a $7 million Series A in 2022. The company has grown to $35 million in annual recurring revenue (ARR), growing 169% year over year, on a 30% profit margin, TechCrunch says.

Co-founder and CEO Gerardo Salandra, who worked at IBM and Google before joining Runtastic, a fitness tracking app that was sold to Adidas in 2015, founded Respond in Hong Kong in 2017 along with Hasan Ahmed (CTO) and Laroslav Kudrycki (COO). The team moved the business to Malaysia two years later.

The platform helps medium to large B2C businesses generate revenue from customer conversations across multiple messaging channels, including WhatsApp, Instagram, TikTok, Messenger, Line, Telegram, WeChat, voice calls and web chat. It also uses AI agents to automatically process high volumes of customer inquiries, qualify leads and close sales without human intervention.

Salandra describes its main customers as « high attention » businesses where customers need to speak to someone before they buy, such as healthcare, automotive, retail, education and travel. « You don’t go to a website, put in your credit card and buy a car; you talk to someone, ask a lot of questions, » he said. Its sweet spot is companies with 200 to 10,000 employees.

The rise of AI has raised an obvious question for platforms like Respond: Can tools like ChatGPT simply replace what they’ve created?

Salandra felt that his support was strong enough to stop such an assault if it happened. The company currently processes 2 billion messages per quarter.

« If I just look at the numbers, every day as AI becomes more prominent, we’re growing faster, » he told TechCrunch. « We don’t see what the public SaaS markets see. »

Part of that comes down to pricing, he said. Unlike enterprise software competitors that charge on the spot, Respond charges based on customer call volume, meaning it doesn’t matter whether a human or AI is answering. « When fewer people use your product, they make less money, » he said. « But we don’t charge like that. »

Established platforms, especially those dominating North America and Europe, were built around emails and phone calls. « The platforms that exist have settled on messaging as a second thought. They’re very focused on email, they’re very focused on calls, but when it comes to messaging, it’s a lag, » Salandra said.

This volume of messaging data creates a feedback loop, according to the CEO. More messages mean better AI. Better AI attracts more customers. More clients generate more messages. « It’s what we call a data flywheel, » Salandra said. He added that a lead is also important for any AI startup. « Because we started so long ago and have such a strong foundation, we can deliver better AI than someone who just entered the messaging space. »

With the new capital, Salandra said the company plans to continue hiring, organic growth and acquisitions. The CEO has two types of acquisition targets in mind: installed technology that fits into its existing ecosystem, and established teams with strong customer bases in strategic markets such as Europe and North America. « Imagine how many months I could save if I found the right company that might already have customers and a team, » he said. « I can save myself six months to a year by acquiring. » He confirmed that the company is already in talks with several potential targets.

The geographic push makes strategic sense. Respond currently generates approximately 30% of its revenue from APAC, 30% from Latin America and 20% from the Middle East and Africa, leaving North America and Western Europe with only 20%. But Salandra says those regions are now the fastest growing. « It took them longer to make the shift, but now they’re moving very quickly to messaging channels, » he said, adding that he expects the two regions to become the company’s largest segment within two to three years.

Despite the new infusion of capital, Salandra is cautious about what comes next. « We don’t want to be a growth company at any cost, » he said. « Even with that money, we’re going to be very disciplined. » But Salandra has bigger plans in mind. « My favorite score? » he said. « Ringing the Nasdaq Bell. »