Chatbots and other types of AI agents, and the companies that build them, may feel like a dozen these days. But the truth is that for both businesses and consumers, some are infinitely more useful (and perhaps fewer dystopians) than others. Today, startups that have built successful businesses around that concept are unveiling a major growth round to expand their business. Manychat has given brands the tools to automate conversations and engagement across multiple messaging channels, winning $140 million, led by Summit Partners.
Funding continues to be strong growth in startups. Today, Manychat has around 1.5 million customers in 170 countries, with a client list of Nike, The New York Times, Yahoo (the current owner of TechCrunch), individual creators and much smaller outfits.
CEO and co-founder Mike Yan said Manychat sends “billions” of messages on behalf of these users each year across Tiktok, Instagram, WhatsApp, Messenger and other chat platforms. The plan is to use this latest Series B round of funding to bring more AI, especially to the platform, increasing the company’s sales, marketing and support globally.
Most of Manychat is profitable, especially with the latest startups. Most of the time, as Yan explains, “We’re always working on the edge of the break.”
Since it was launched in 2015 a decade ago, it has only raised about $23 million from this $18 million Series A round in 2019, with participation from Flint Capital, led by Bessemer. (ManyChat did not reveal what other investors are in this latest round beyond the summit.) The company has not given ratings, but it could be significantly higher than the Series A detailed post-$58 million valuation pitchbook.
From Telegram to Instagram
Manychat’s trajectory reflects both the rise of smartphone-based messaging apps over the past decade and the growth opportunities in terms of tools to help businesses leverage their medium in a better way.
In 2015, email inboxes began to become a tired, tired medium with spam, for businesses they were trying to use for marketing.
Yang is out of the back of the failed social app, and he himself is a telegram user and was one of a group of consumers who use messaging apps for basic communication. When Telegram opened the API, the inspirational bulb went out for him and his co-founder Anton Morin.
“Telegram was actually one of the first Western messaging apps to open an API,” he recalls. “We saw that Telegram users are themselves and we do a clear job,” he said, using email to connect with users, but that wasn’t where users were spending their time. “They need to actually connect with their customers using messaging apps. That’s where a new wave of communication is happening. There’s a new consumer there.”
So he and Golin built the first iteration of Manychat as a tool to create chats for business on Telegram. It gained enough traction to put it in the 500 startup accelerator.
Then, when Facebook opened the API for Messenger, it created its own first effort to build an AI chatbot, things really started to take off. By the time many chats rose Series A in 2019, they had already reached 350 million users on the platform with billions of messages and enviable open rates.
Additional APIs have been opened across other meta-owned platforms and Tiktok, increasing their growth. Users can also sell on Telegram, Yan said, but these days it’s only a small portion of the traffic. For the record, Yan said Instagram is the most enthusiastic and active platform for the company today.
Most of Manychat’s establishment and its growth preceded the rise in generation AI and the emergence of AI chatbots such as Anthropic’s Claude, Openai’s Chatgpt, and Google’s Gemini. In fact, previous descriptions of the product promoted how it provided a “smart blend of automation and personal outreach” to customers who were using the no-code platform to build chatbots to gather social followers, respond to comments, and set up flows via DM links.
Yan said fixing the product around fostering further action sets it apart from most chatbots currently on the market, including most Genai chatbots.
Sophia Popova, a summit partner who leads investments and joins the startup board, believes that many chat approaches, building engagement layers that have so far been a solid bet on the next wave of activity on messaging platforms.
“Our paper depends on the majority of commerce dollars going through social messaging apps,” she said in an interview. “You need to be involved 24/7 all the time. That’s what customers expect, and a lot of chats are nailing in their heads.” In contrast, she said, given the DNA of AI chatbots (at least in the market today), “few people are directed towards personalizing conversations in ways that drive conversion into revenue.”
If you want a help desk chatbot, there are “number of” tools, but in reality, there are few things that are appealing to selling or eliciting other responses from users in the way Manychat did.
But this is a gap that may not exist for a long time, given the pace of development and the drive that many AI startups have to generate revenue to offset massive cash burns.
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