While companies are claiming to build relationships with customers, this is not the case more often than not. Case in point – most customer service experiences treat you like you are a person coming in off the street for the first time with no prior interaction with the company; often resulting in you having to incessantly repeat the same details over multiple interactions. Sensing a growing frustration and lack of technology integration in the space, Kustomer launched its omnichannel customer service software solution in 2015. Agents now have a holistic view of the problem through a single timeline that serves a profile for the lifetime of a customer rather than a single ticket for a specific issue. This approach has disrupted the customer service model and Kustomer has proven so effective that some of the fastest growing companies like Glossier, Rent the Runway, and UNTUCKit are using the platform.
AlleyWatch caught up with Kustomer founder Brad Birnbaum to learn more about the company’s impressive growth, its expansion into other verticals, opening up a data center in Europe, and the company’s newest round of funding led by Tiger Global that came when the company wasn’t even looking to raise. Kustomer has now raised a total of $113.5M across five rounds.
Tell us about the product or service that Kustomer offers.
Kustomer is an omnichannel customer service platform built to deliver the standout experiences consumers expect – not resolve tickets.
What inspired you to start Kustomer?
My cofounder Jeremy and I have spent our careers building technologies to help improve customer service teams and contact centers. It became apparent to us that the traditional ticketing systems, which are over a decade old, did not allow companies to meet the expectations of today’s consumers. This is because agents viewed customers through the lens of the ticket and only saw the problem that needed to be solved, and the agents needed to do it fast – without looking at the overall history of the customer and their interactions with the company.
This issue was compounded by the limited amount of customer information in these systems, so agents had no context of a customer’s past interactions with the brand. The lack of customer data also meant that agents would have to ask a lot of questions and go through a variety of other systems to actually resolve the ticket. The resulting experience was impersonal and inefficient.
We felt that by using modern data models, automation, and putting customers at the heart of the solution and not just focus on their problems, we could reimagine customer service software and help businesses create personalized, efficient, and effortless experiences for customers and their agents.
How is Kustomer different?
There are several key things that make Kustomer different. The Kustomer platform uses intelligence to automate repetitive, manual tasks and provide service agents unprecedented insight into a customer’s history. We also use intelligence to assess a customer’s current sentiment about the brand, which updates in real-time, so agents can better address customer issues.
The Kustomer platform is customer-centric not ticket centric. We manage real conversations between real people, we don’t track problem resolution. To do this, Kustomer ingests all customer data, such as purchase orders, from any internal or 3rd-party sources. All of this customer data is organized and displayed as a single timeline for each customer, giving agents a holistic view of a customer’s experience with the business and enabling them to engage in data-driven, actionable conversations without changing screens.
Kustomer is a true omnichannel platform. While other customer service solutions will say they’re omnichannel, they really mean multichannel. Customers can communicate with a company through multiple channels, but each channel lives in its own silo. Most of the time each channel is a separate ticket handled by a different team who has almost no historical data. For example, if a customer had spoken to an agent earlier on chat and now via email, the chat team and email team would have no record of each other’s conversation.
By comparison, Kustomer, as a true omnichannel platform, provides a single threaded discussion about a topic that spans all of the channels that companies want to communicate with their customers on.
By comparison, Kustomer, as a true omnichannel platform, provides a single threaded discussion about a topic that spans all of the channels that companies want to communicate with their customers on.
Their agents and customers can switch between different channels as needed during a conversation while progressing the conversation without having the customer repeat information. Kustomer supports seamless communication through email, chat, SMS, voice, Facebook Messenger, and Twitter. What makes this possible is that agents always have the context of every conversation through the timeline.
What market does Kustomer target and how big is it?
Right now, Kustomer is targeting the Customer Service and Support software market helping businesses provide the rich experiences their customers expect. The current total addressable market, globally, is $35B and growing rapidly. When you add in the adjacent markets that we’ve already designed our platform to support and plan to move into in the next few years makes the total opportunity gigantic.
What’s your business model?
Kustomer has a SaaS annual subscription model.
What was the funding process like?
It was unlike any other in this case. We weren’t looking for more money. We had just raised our Series B last June and then our Series C in January, and we run a capital efficient company, so we didn’t need more money. However, one of my jobs as CEO is to meet with investors. After a few introductory conversations with Tiger Global Management, they presented a term sheet and the opportunity to partner with them was too good to pass up.
How has the business changed since we last spoke last summer after Kustomer’s Series B round?
The biggest change is that by closing our Series C and now our Series D, we’ve dramatically increased our runway while at the same time ramping up our already aggressive growth plans. We’ve also seen an evolution in our customer base. Much of our early success was with direct-to-consumer brands. While we’re still highly successful in this segment of the market, we’ve seen a lot of traditional brands make the move to Kustomer. They’ve come to the realization that their approach to customer service and legacy ticketing systems are holding them back from providing the level of service that today’s consumers have grown accustomed to receiving, causing them to lose business to competitors. We’ve also expanded into new verticals like healthcare and have gained significant traction in Europe.
Finally, I think what hasn’t changed is just as important as what has changed. We’ve continued to execute as a business, building strong relationships with our customers and innovate our platform.
What factors about your business led your investors to write the check?
We have a highly differentiated product that our customers love in a gigantic space. Tiger Global is well educated in our space, are strong believers in it, and therefore recognize the opportunity for growth that we have as a company. Plus, we’ve executed as a business over the last couple of years since coming out of stealth mode two-plus years ago. In the last twelve months, we’ve grown by 350%. We are working with customers that are some of the leading-service oriented brands in the world today. Companies like Away, Glossier, Glovo, Rent the Runway, and UNTUCKit. And we have continued to innovate to address the future needs of our customers.
What are the milestones you plan to achieve in the next six months?
In the next six months, we plan to open our European data center to assist our international expansion efforts. Our goal at the beginning of the year was to double the size of the team overall and we’re on track. From a product perspective, we are focused on rolling out additional elements of artificial intelligence and machine learning to automate more of the customer service process, while augmenting the human agent experience.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Regardless of whether you have a fresh injection of capital in the bank or not, my one piece of advice is to focus. Identify what to focus on and be ruthless about executing.
Where do you see the company going now over the near term?
We are going to ramp up our already aggressive plans to build on our unprecedented opportunity. For starters, we plan on making significant investments in our product and engineering teams to supercharge our innovation. A primary focus of this investment will be doubling down on artificial intelligence and machine learning to further enhance our business process automation capabilities. We will also enhance our platform more generally to better support customer service teams. Our European data center will launch later this summer, opening up the continent for further expansion. We will also enlarge our customer experience team to ensure that our customers receive the same strong support from us that they provide to their customers.
What’s your favorite rooftop bar in NYC to unwind?
Typically, I unwind at home with my family, but if I’m going to a rooftop bar I am going to Skylark in our building, which has a great 360° view of midtown.
