The use of voice AI in sales, marketing, customer support, and consumer applications has skyrocketed in recent years. As a result, business for model providers is increasing and investor interest is also increasing. Driven by this demand, DeepGram today announced that it has raised $130 million in an AVP-led Series C round at a valuation of $1.3 billion.
Existing investors including Alkeon, In-Q-Tel, Madrona, Tiger, Wing, and Y Combinator also contributed additional capital to the round. Additionally, new investors joined the round including Alumni Ventures, Columbia University, Princeville Capital, Twilio, and SAP. The company has raised more than $215 million in funding to date.
The startup’s funding continues the trend of big funding rounds in the voice AI space over the past year, including Seasame’s $250 million Series B, Eleven Labs’ $180 million Series C, and Gradium’s $70 million seed round.
Elisabeth de Saint-Aignan, a partner at AVP, told TechCrunch that the fund started researching companies working in this space after hearing frequent conversations with companies about how to use AI.
“In 2024, as we were talking to companies about how they were thinking about using AI within their businesses, we started hearing about how they were using voice AI in processes like contact centers and sales development. As we talked further with them, we learned that a lot of their voice AI technology was powered by Deepgram, which led us to them.” [Deepgram]” said Saint-Aignan.
He pointed out that voice AI can help companies reduce costs while making interactions between customers and companies more comfortable, and DeepGram could play a central role in this.
Deepgram has numerous models related to text-to-speech and speech-to-text conversion, as well as a platform and API for conversational speech recognition and low-latency interruption handling. The company said more than 1,300 organizations are using its voice AI products and models, including meeting note-taking company Granola and voice agent startups Vapi and Twilio.
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CEO Scott Stevenson said the company did not need to raise capital and had positive cash flow last year.
“Voice AI has become mainstream over the last year, further increasing the potential demand. We believe we can make larger investments sooner to accelerate growth. That’s why we felt now was the right time to raise capital,” he said.
“However, we weren’t looking for a raise. We had multiple people coming to us. We were looking for a strategic investor who understood voice AI and its technical intricacies, and who wanted to build relationships with companies that leveraged and built on that technology.”
The company hopes to use the new funding to expand its global footprint and improve support for multiple languages. We are also focusing on catering to restaurants using voice AI. To this end, the company acquired Y-Combinator-backed Ofone. Ofone has built a voice AI-powered solution for quick service restaurants. The startup claims to have over 93% accuracy in receiving orders. Voice AI presents challenges in the restaurant space. Last year, Taco Bell halted a voice AI experiment after someone ordered 18,000 water cups.
“I’m excited about this [voice AI-driven food ordering] Because ordering food may be the first positive interaction more than 300 million Americans have with voice AI. Over the past 20 years, there has been a lot of interaction with voice AI and many assistants have appeared, but people felt that they did not provide a magical experience. But if people can order food through natural conversation, I think people will think the technology is ready,” Stevenson said.
OfOne’s acquisition news comes after Presto, which serves brands such as Carl’s Jr., raised $10 million in new funding, so there appears to be investor interest in the space.
According to analyst reports, the voice market is expected to grow more than 30% year over year and become a $14 billion to $20 billion market by 2030. This growth rate is expected to make model and API providers a core component of companies and startups developing voice solutions and become multi-billion dollar companies.
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